Criminal Penalties on Officers Can Deter Corporate Tax Avoidance

There is a worldwide debate over how to prevent overly aggressive corporate tax avoidance. In 2015, the Australian government doubled civil penalties on large multinational corporations that engage in the practice. Similarly, recent legislation in the United States, like the Stop Tax Haven Abuse Act, would increase penalties only on corporations, while the UK treasury also plans to increase corporate penalties. However, the former UK Liberal Democrat chief secretary, Danny Alexander, and others suggest that the treasury should consider criminal penalties on corporate officers as well.

Our forthcoming study empirically examines whether high penalties deter corporate tax avoidance, a practice … Read more