I always get asked about law dissertation structure. What is a good structure for a law dissertation?


The best way to show you is to show you mine!


Here goes…




Taxes are what we pay for civilised society’


Oliver Wendell Holmes[i]


It is often said that the only certainties in life are death and taxes. However, what is not inevitable is the payment of the ‘fair share’ of the corporate tax burden as large corporations strive to design innovative and technical devices in order to reduce their tax liability.  The era of globalisation has diminished the role of national borders and fused national markets together. Corporations have taken advantage of these opportunities by creating an elaborate labyrinth of tax avoidance instruments in order to reduce the amount of tax they pay. This has included the use of tax havens, income-shifting through transfer pricing and the use of thin capitalisation. These approaches represent a central feature of ‘national and international fiscal policy and the global capitalist economy’.[ii] They are employed by corporations as a matter of course and aim to reduce or obliterate society’s claim to tax revenues.


Corporate tax behaviour operates at various levels. Where a corporation engages in tax evasion, characterised by its illegal nature involving intentional deceit,[iii] such behaviour is corrected by criminal prosecutions and/or civil sanctions. However, law and regulation are not generally employed to address the problem of tax avoidance – the practice of reducing a tax burden using methods that accord with the ‘letter of the law’ but not the ‘spirit of the law’.[iv] CSR has been mooted as a possible vehicle for addressing this ‘tax gap’. CSR encapsulates the idea that businesses have responsibilities to other stakeholders other than shareholders and has figured in legal, economic, business, management and ethics literature for centuries.[v] The concept has gained traction over the last fifty years and has led to an explosion in CSR literature, research and media reporting. The notion of CSR itself is incapable of strict definition. The boundaries meander and encroach into new territories and attempt to address different economic, environmental and societal concerns over time. This research will suggest that despite this uncertainty in definition there is nothing to prevent taxation from being included in traditional constructions of CSR. It is further noted that the definition of CSR is broadening to encompass areas that have customarily fallen outside its scope. For example, the non-governmental organisation Sustainability has advocated that CSR should include (a) a consideration of a business’s impact on society and the environment and should look beyond its obligation to comply with the letter of the law and (b) the consideration of the potential impact of environmental and social issues on a corporation’s long-term performance.[vi] The payment of taxes rests comfortably into this definition – responsible tax behaviour involves paying more tax than prescribed by law and as shall be explored in this thesis, can help improve the long-term performance of corporations.


Up until 2007, it was impossible to discern any appetite for absorbing the issue of taxation into the CSR agenda. However, in recent years there has been a paradigm shift in financial and economic standards towards more socially responsible corporate practices. The high profile collapse of corporate behemoths including Enron and Worldcom, along with the recent outcry at the irresponsible tax practices at Google, Amazon and Starbucks has fixed the public gaze on the actions of corporations and how their failings can impact on society. This heightened public awareness has been further augmented by the corporate weaknesses that helped fuel the Financial Crisis 2008. In the wake of the banking meltdown, it was no longer acceptable for corporations to proclaim that their sole duty was to increase the profits of their shareholders. The public, along with large sections of the non-governmental organisation (NGO) sector are calling for change and their views are beginning to influence modern thinking on the payment of taxes and the role that CSR can play in facilitating responsible tax behaviour.


The debate on CSR is part of a broader debate on the proper objective of the corporation. There is a tension between proponents of shareholder wealth maximisation who advocate that the ‘business of business is business’[vii] and those that assert that the corporation is an economic institution that has a social service as well as a profit-making function.[viii] The shareholder wealth maximisation norm has recently been attacked on a theoretical level and the foundations upon which it rests are being destabilised. The CSR approach has also not escaped criticism – for example, some commentators argue that corporations are not equipped to deal with social issues.[ix] However, these arguments are weak and easily refutable. The case for CSR is much stronger and is the preferred approach to ensure that businesses benefit external stakeholders as well as shareholders.


One of the most enduring arguments in support of CSR is the ‘business case’.[x] This argument suggests that businesses can ‘do well by doing good’.[xi] The business case can be constructed narrowly or broadly.[xii] Under the narrow view, CSR is permissible where it positively impacts financial performance.[xiii] The narrow view rests upon purely economic considerations. Some empirical evidence supports the narrow business case for CSR, however, these studies are plagued with inconsistencies and lack methodological rigour.[xiv] The broad interpretation of the business cases includes indirect and non-financial rewards that accrue to corporations that engage in socially responsible practices.[xv] These rewards include cost and risk reduction, gaining competitive advantage and enhanced reputational capital.[xvi] This research will show that corporations who pay their ‘fair share’ and more of their tax burden are likely to realise these three benefits.


This thesis will explore the basis for adding the payment of taxes to the growing list of considerations that corporations must contemplate as part of their CSR policies.  The debate will be framed around three central research questions:


  • is taxation currently considered a CSR concern and
  • if not, what are the general arguments in support and against including taxation as a CSR issue
  • Specifically, what is the business case for employing a responsible tax strategy


This research will progress in three chapters.


Chapter I will involve an exploration of the problems created by aggressive tax avoidance. First, the various approaches to tax behaviour will be explored. Tax behaviour operates on a continuum encompassing tax compliance, tax evasion and tax avoidance.[xvii] The concern of this research is aggressive tax avoidance which involves using tax avoidance mechanisms with the sole objective of reducing the tax burden. This section will progress with an analysis of the various devices used to reduce tax liabilities including the use of tax havens, transfer pricing and thin capitalisation. This will involve examining the characteristics of these mechanisms and the problems that they cause. This part will then consider the current literature on the extent of the ‘tax gap’, looking at a range of academic, government and other published sources that aim to estimate the current losses to the public purse through tax avoidance.


Chapter II of this research investigates the concept of corporate social responsibility (CSR). Specifically, this thesis will argue that responsible tax behaviour falls into the economic limb of Carroll’s four-tier pyramid of CSR. This part will then assess whether tax avoidance is currently considered a CSR issue by businesses themselves. Ultimately, the conclusion arrived at is that it currently is not – corporations espouse claims of responsible tax behaviour but their actions reveal a different agenda. This chapter will conclude by looking at the broad arguments for and against CSR with particular reference to the corporate objective debate and show that the classic economics argument that ‘the business of business is business’ is flawed and that CSR is a more attractive option for delivering sustainability and overall value to the firm.


Chapter III will then move away from broad issues and focus in on the ‘business case’ for subsuming taxation into CSR strategies. This part will explore the narrow and broad constructions of the business case for CSR. This chapter will explore the link between CSR and corporate financial performance by examining the current empirical studies that seek to show such a link. The discussion will conclude with an exploration of the broad business case for CSR and investigate three main benefits of pursuing a responsible tax strategy: reduced cost and risk, gaining competitive advantage and enhancing corporate reputation. The irrefutable conclusion arrived at is that responsible tax behaviour can allow businesses to ‘do well by doing good’.




This research will involve a critical consideration of the link between CSR and the payment of taxes. Taxation and CSR is a multidimensional issue involving a range of actors and organisations. Consequently, this thesis includes research from organisations including the Organisation for Economic Cooperation and Development (OECD) as well as non-governmental organisations including Oxfam, ActionAid and the Tax Justice Network. However, the limitation of these sources is that they are policy documents and tend to lack any in-depth academic or theoretical content. Therefore, these sources will be used in conjunction with a range of scholarly resources. These sources will be a mixture of quantitative and qualitative research. Quantitative research is required in order to help answer aspects of the three research questions in this investigation – for example, whether there is a statistically significant link between CSR and corporate financial performance. Qualitative research is required for two reasons: first, the quantitative research in this field lacks methodological rigour and the results obtained are ambiguous on several aspects of the CSR-tax relationship. In addition, this study is forward-looking and recognises that while taxation may not currently be considered a CSR concern, there is a solid argument that it should be. Therefore, it is imperative to consider the academic and theoretical arguments to support this proposition. In outlining whether taxation is currently considered a CSR issue reference will be made to three case studies of tax and CSR policy at Enron, Worldcom and more recently at Amazon. These case studies will complement the academic literature on this issue by exploring the link in a practical context.


[i] Compania de Tabacos v Collector (1904) 275 US 87, 100 (Supreme Court Justice Wendell Holmes)

[ii] Olatunde OtUSnya, ‘The Role of Multinational Companies in Tax Evasion and Tax Avoidance: The Case of Nigeria’ (2011) 22(3) Critical Perspectives on Accounting 316

[iii] Mary-Jo Kranacher et al, Forensic Accounting and Fraud Examination (John Wiley 2011) 103

[iv] Ulrich Palm, ‘Germany’ in Karen Brown (ed), A Comparative Look at the Regulation of Tax Avoidance (Springer 2012) 187

[v] R. Edward Freeman, Strategic Management: A Stakeholder Approach (Pitman 1984); Thomas Jones, ‘Corporate Social Responsibility Revisited, Redefined’ (1980) 22(2) California Management Review 59, 59-60

[vi] ActionAid, Tax Responsibility: The Business Case for Making Tax a Corporate Social Responsibility Issue (ActionAid 2011) 3

[vii] Ronald Duska, Contemporary Reflections on Business Ethics (Springer 2007) 40

[viii] Merrick Dodd, ‘For Whom are Corporate Managers Trustees?’ (1932) 45(7) Harvard Law Review 1145, 1148

[ix] Keith Davis, ‘The Case for and Against  Business Assumption of Social Responsibilities’ (1973) 16(2) Academy of Management Journal 312, 312

[x] Archie Carroll and Kareem Shabana, ‘The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice’ (2010) 12(1) International Journal of Management Review 85

[xi] ibid

[xii] ibid

[xiii] ibid

[xiv] Esben Pederson and Peter Neergaard, ‘The Bottom Line of CSR:  A Different View’ in Frank de Baaker et al (eds), Managing Corporate Social Responsibility in Action: Talking, Doing and Measuring (Ashgate 2007) 78

[xv] Carroll and Shabana (n 10) 93

[xvi] Elizabeth Kurucz et al ‘The Business Case for Corporate Social Responsibility’ in Andrew Crane, The Oxford Handbook of Corporate Social Responsibility (OUP 2008) 83

[xvii] Erich Kirchler, The Economic Psychology of Tax Behaviour (Cambridge 2007) 21