BUS262 International Taxation, Tax Havens and Sustainability

Over the past 40 years, income from corporation tax has either fallen or been held stable in developed economies. This course takes a closer look at what lies behind this development.

One important reason why income from corporation tax is less important than it could is that a lower corporation tax rate has become a key tool in the competition to attract investment. But the development is also due to tax havens offering even lower tax rates. Not only has it contributed to further pressure on tax rates. There are a number of examples of multinational companies booking profits that have been generated elsewhere in tax havens - known as profit shifting.

Tax is one of the ways in which companies contribute to the society around them, and the reduced tax revenue from corporation tax helps to undermine welfare states around the world. Therefore, there is increasing international effort from various authorities to tighten up. At the same time, tax has also become a natural part of the sustainability strategies of more and more companies and investors. Norges Bank Investment Management (NBIM) is one of many high profile examples of an organization with a clear strategy for responsible tax.

This course provides a basic introduction to corporation tax and the international system for taxing companies. It also takes a closer look at tax havens, at how companies use various techniques to move profits from high-tax countries to low-tax countries, and at how the authorities work to stop profit shifting. In addition, it takes a closer look at how companies and investors develop increasingly clear strategies to show that they have responsible tax practices.

Knowledge: The student must have knowledge of why companies pay corporate income tax, of how the international tax system is organized and what international tax competition is all about, and of what characterizes aggressive tax planning, tax avoidance and tax evasion. The student must also have knowledge of what a tax haven is, how large the scope of profit shifting is internationally and what is being done nationally and internationally to prevent profit shifting and other aggressive tax planning tax avoidance. It includes knowledge of widely used techniques for profit shifting and other types of tax avoidance and how this has developed over time.

Skills: The student must be able to summarize what we know today about companies' use of tax havens and be able to distinguish between multinational companies' use of tax havens and other harmful use of tax havens. The student must be able to reflect on what constitutes a sustainable approach to tax for a company and what social responsibility the company has in the tax area. The student must be able to link this to what he has learned about tax havens and international tax.

General qualifications: The student must know the most important questions and trends in international tax, and be able to reflect and think critically about companies' tax practices.