Tax: how to tarnish your image

Both Starbucks and Amazon have been exposed as under-paying tax. How does this square with their nice CSR images? It doesn’t.

Starbucks have been doing good work in their supply chain and Amazon has been addressing packaging issues. But tax is not seen as a traditional ‘CSR’ issue. And it clearly hadn’t occurred to them that there was anything wrong in using the law to their own advantage. So there’s good and bad and there’s legal and illegal. The two categories just don’t map neatly onto each other. CSR doesn’t really know which fence to sit on.

The real problem, though is not the formulation of CSR, but the lack of fixed formulae for apportioning tax based on where value is created and consumed. At the moment the law leaves multinationals to do the transfer pricing trick, after which the quantity of tax paid is entirely discretionary. Sorting tax out is entirely possible and mainly requires the UK government to act in the national interest.

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