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Article

A Real Option Approach to Sustainable Corporate Tax Behavior

1
Faculty of Law and Antwerp Tax Academy, University of Antwerp, Venusstraat 23, 2000 Antwerp, Belgium
2
Institute of Development Policy, and Antwerp Tax Academy, University of Antwerp, Prinsstraat 13, 2000 Antwerp, Belgium
3
School of Economics, Utrecht University, Kriekenpitplein 21-22, 3584 EC Utrecht, The Netherlands
4
Faculty of Business and Economics, University of Antwerp, Prinsstraat 13, 2000 Antwerp, Belgium
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(13), 5406; https://doi.org/10.3390/su12135406
Received: 27 May 2020 / Revised: 22 June 2020 / Accepted: 29 June 2020 / Published: 3 July 2020
(This article belongs to the Special Issue Taxation and Sustainability)
Aggressive tax planning has become a sustainability problem, as governments have to cope with less tax revenue, which is crucial for investments in sustainable development goals. The OECD and the EU authorities have taken several initiatives against aggressive tax planning, such as the Action Plan against BEPS. However, these initiatives lack effectiveness, and aggressive tax planning is still omnipresent. We analyze the fight against aggressive corporate tax planning from a Real Option Theory perspective, in order to find an explanation for the difficult shift of companies’ aggressive tax planning strategies to more sustainable tax behavior. The Real Option Theory shows that, as long as the option to ‘delay’ the investment in sustainable tax behavior has too much value because the benefits of such investment are uncertain, companies will wait. Based on this new understanding, we suggest additional public policy interventions against aggressive tax planning. These interventions aim directly at reducing this real option value (of waiting). View Full-Text
Keywords: real option theory; tax avoidance; BEPS; aggressive tax planning; sustainability real option theory; tax avoidance; BEPS; aggressive tax planning; sustainability
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MDPI and ACS Style

Van de Vijver, A.; Cassimon, D.; Engelen, P.-J. A Real Option Approach to Sustainable Corporate Tax Behavior. Sustainability 2020, 12, 5406. https://doi.org/10.3390/su12135406

AMA Style

Van de Vijver A, Cassimon D, Engelen P-J. A Real Option Approach to Sustainable Corporate Tax Behavior. Sustainability. 2020; 12(13):5406. https://doi.org/10.3390/su12135406

Chicago/Turabian Style

Van de Vijver, Anne, Danny Cassimon, and Peter-Jan Engelen. 2020. "A Real Option Approach to Sustainable Corporate Tax Behavior" Sustainability 12, no. 13: 5406. https://doi.org/10.3390/su12135406

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