Abstract
The present paper is a commentary on the article “The relationship between Taxation, Accounting and Legal Forms”, which has already been published in AEL: A Convivium. The article deals with Controlled Foreign Corporation rules (CFC rules) from a profit-seeking perspective. It develops tax schemes and assumes them to be adequate means to avoiding the Austrian or German CFC rules. This commentary argues that from the perspective of a critical rationalist methodology, the topic and the findings of the article need to be viewed with some reservation. A substantial objection applies to the article’s statement that the developed tax schemes are adequate to achieve the end of optimising the effective tax rate. However, there is the even more substantial objection that neither the developed tax schemes nor the end of optimising the effective tax rate without taking the interests of society systematically into account are legitimate. However, the article fails to address the major societal issue of how to reduce tax avoidance.
Acknowledgments
The author thanks Yuri Biondi and six anonymous reviewers for their valuable comments.
References
Albert, H. (1985). Treatise on critical reason. Princeton University Press.10.1515/9781400854929Search in Google Scholar
Albert, H. (1999). Between social science, Religion and politics – Essays in critical rationalism. Rodopi.10.1163/9789004501188_023Search in Google Scholar
Biondi, Y. (2011). The problem of social income: The entity view of the cathedral. Seattle University Law Review, 34, 1025–1047.Search in Google Scholar
Biondi, Y. (2017). The firm as an enterprise entity and the tax avoidance conundrum: Perspectives from accounting theory and policy. Accounting, Economics, and Law: A Convivium, 7(1), 1–9. https://doi.org/10.1515/ael-2017-0001.Search in Google Scholar
Bondi, Y. (2019). Equilibrium and system analysis in economic dynamics. A comment on the “guidance of an enterprise economy” by Martin Shubik and Eric Smith. Accounting, Economics, and Law: A Convivium, 9(3), 1–10. https://doi.org/10.1515/ael-2018-0027.Search in Google Scholar
Buchanan, J. M., & Vanberg, V. J. (1991). The market as a creative process. Economics and Philosophy, 7(2), 167–186. https://doi.org/10.1017/s0266267100001383.Search in Google Scholar
Carnap, R. (1937). Logical Syntax of language. Routledge.Search in Google Scholar
Devereux, M. P., Auerbach, A., Keen, M., Oosterhuis, P., Schön, W., & Vella, J. (2021). Taxing Profit in a global economy. University Press.10.1093/oso/9780198808060.001.0001Search in Google Scholar
Endres, D., & Spengel, C. (2015). International company taxation and tax planning. Kluwer Law International BV.Search in Google Scholar
EU (2021). Proposal for a COUNCIL DIRECTIVE on ensuring a global minimum level of taxation for multinational groups in the Union. https://ec.europa.eu/taxation_customs/system/files/2021-12/COM_2021_823_1_EN_ACT_part1_v11.pdf. Accessed September, 2022.Search in Google Scholar
Friedman, M. (1953). The methodology of positive economics. In Friedman, M. (Ed.), Essays in positive economics (pp. 3–43). Chicago: The University of Chicago Press.10.1017/CBO9780511819025.010Search in Google Scholar
Friedrich, J. (2020). Regulatory arbitrage in the intersection of accounting Standards and tax laws: The case of synthetic leases. Accounting, Economics, and Law: A Convivium, 11(2), 201–232. https://doi.org/10.1515/ael-2020-0098.Search in Google Scholar
Furubotn, E. G., & Richter, R. (2005). Institutions and economic theory: The contribution of the new institutional economics (2nd ed.). The University of Michigan Press.10.3998/mpub.6715Search in Google Scholar
Gadenne, V. (2006). Methodological rules, rationality, and truth. In C. Cheyne (Ed.), Rationality and reality: Conversations with Alan Musgrave (pp. 97–107). Springer.10.1007/1-4020-4207-8_6Search in Google Scholar
Gadenne, V. (2008). The construction of realism. Constructivist Foundations, 3(3), 153–159.Search in Google Scholar
Gadenne, V. (2013). External validity and the new inductivism in experimental economics. Rationality, Markets and Morals, 4, 1–19.Search in Google Scholar
Gribnau, H., & Jallai, A. (2017). Good tax governance: A matter of moral responsibility and transparency. Nordic Tax Journal, 1, 70–88. https://doi.org/10.1515/ntaxj-2017-0005.Search in Google Scholar
Killian, S. (2006). Where’s the harm in tax competition? Lessons from US multinationals in Ireland. Critical Perspectives on Accounting, 17, 1067–1087. https://doi.org/10.1016/j.cpa.2005.08.010.Search in Google Scholar
Kobbi-Fakhfakh, S. (2021). The interplay between tax havens, geographic Disclosures and corporate tax avoidance: Evidence from European union. Accounting, Economics, and Law: A Convivium, 1–40. https://doi.org/10.1515/ael-2021-0008.Search in Google Scholar
Kollruss, T. (2021). The relationship between taxation, accounting and legal forms: How tax and accounting rules may influence the choice of the legal form in enterprise groups and multinational firms – analysed on the basis of the ATAD CFC taxation. Accounting, Economics, and Law: A Convivium, 1–31. https://doi.org/10.1515/ael-2019-0076.Search in Google Scholar
OECD (2021). Aggressive tax planning. https://www.oecd.org/tax/aggressive/. Accessed September, 2022.Search in Google Scholar
OXFAM (2021). Corporate tax abuse. https://www.oxfam.org/en/tags/corporate-tax-abuse. Accessed September, 2022.Search in Google Scholar
Payne, D., & Raiborn, C. (2018). Aggressive tax avoidance: A conundrum for Stakeholders, governments, and Morality. Journal of Business Ethics, 147(3), 469–487. https://doi.org/10.1007/s10551-015-2978-5.Search in Google Scholar
Popper, K. R. (1968). The logic of scientific discovery (2nd ed.). Hutchinson & Co.Search in Google Scholar
Schanz, D., & Schanz, S. (2011). Business taxation and financial decisions. Springer.10.1007/978-3-642-03284-4Search in Google Scholar
Scherer, A., & Schmiel, U. (2021). Ethical and legal responsibility of multinational corporate groups for a fair share of taxes. Nordic Tax Journal, 8, 32–46. https://doi.org/10.2478/ntaxj-2021-0002.Search in Google Scholar
Schmiel, U. (2020). Economic analysis of tax law from a Sustainability perspective. Florida Tax Review, 23(2), 597–624.10.5744/ftr.2020.2005Search in Google Scholar
Schmiel, U., & Sander, H. (2022). What are markets? Selected market theories under genuine uncertainty in comparison. Journal of Evolutionary Economics, 32, 9–33. https://doi.org/10.1007/s00191-021-00728-5.Search in Google Scholar
Schmiel, U., & Weitz, A. (2019). Is a one-book-system adequate? A framework for tax law analysis under genuine uncertainty. Accounting, Economics, and Law: A Convivium, 9(2), 1–18. https://doi.org/10.1515/ael-2016-0062.Search in Google Scholar
Schreiber, U. (2013). International company taxation – an introduction to the legal and economics principles. Springer.10.1007/978-3-642-36306-1Search in Google Scholar
Sen, A. (1988). Freedom of choice. European Economic Review, 32(2–3), 269–294. https://doi.org/10.1016/0014-2921(88)90173-0.Search in Google Scholar
Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. The Journal of Finance, 19, 425–442. https://doi.org/10.2307/2977928.Search in Google Scholar
Shubik, M. (2019). Accounting and its Relationship to general equilibrium theory. Accounting, Economics and Law: A Convivium, 9(3), 1–11. https://doi.org/10.1515/ael-2018-0054.Search in Google Scholar
Stelzer, H. (2009). Popper and communitarianism: Justification and criticism of moral standards. In Z. Parusniková, & R. S. Cohen (Eds.), Rethinking Popper. Boston studies in the philosophy of science (Vol. 272, pp. 273–286). Springer.10.1007/978-1-4020-9338-8_21Search in Google Scholar
Strasser, K. A., & Blumberg, P. (2011). Legal form and economic substance of enterprise groups: Implications for legal policy. Accounting, Economics, and Law: A Convivium, 1(1), 1–28. https://doi.org/10.2202/2152-2820.1000.Search in Google Scholar
Vanberg, V. (2002). Rational choice vs. program-based behavior. Rationality and Society, 14(7), 7–54. https://doi.org/10.1177/1043463102014001002.Search in Google Scholar
Vanberg, V. (2007). Corporate social responsibility and the ‘game of catallaxy’: The perspective of constitutional economics. Constitutional Political Economy, 18(2), 199–222. https://doi.org/10.1007/s10602-007-9022-4.Search in Google Scholar
© 2022 CONVIVIUM, association loi de 1901
