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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (30 April 2021) | Viewed by 47162

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Special Issue Editor

Dr. Elena Fernández-Rodríguez

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Guest Editor

Department of Accounting, University of Oviedo, Av. del Cristo s/n, Oviedo, Spain
Interests: taxation; fiscal; tax collection; tax burden; tax avoidance; effective tax rate

Special Issue Information

Dear Colleagues,

If societies in different countries are to be sustainable, there must be a balance between public revenue and expenditure. Tax revenue is therefore key for ensuring that countries have sufficient funds. Clearly, on a global level, there are great differences between countries, and institutional characteristics may be decisive in their political decisions. So, there are important differences between developed and emerging countries that determine their fiscal policies. In recent years, there have been changes in the structure of tax revenue in different countries. More specifically, there is an international trend towards pushing up revenue from indirect taxes and decreasing revenue coming from direct taxes. This trend can be traced in the statistics published by various international organizations, such as the Organization for Economic Co-operation and Development (OECD) or the European Union (EU).

The two main international concerns currently being studied by international organizations are the following: (1) tax avoidance, mainly by multinationals in relation to corporate income tax; and (2) environmental taxation, which is considered key to holding back climate change. For these reasons, the organizations are therefore trying to draw up action guidelines that can serve as a guide for different countries.

In the field of tax avoidance, the Base Erosion and Profit Shifting (BEPS) Project of 2015 (OCDE/G20) is key. Under the OECD/G20 Inclusive Framework on BEPS, over 135 countries are collaborating to put an end to tax avoidance strategies that exploit gaps and mismatches in tax rules to avoid paying tax. Along the same lines, the EU approved the Council Directives (EU) 2016/1164 and 2017/952, which establish rules against tax avoidance practices that directly affect the functioning of the internal market. Regarding environmental taxation, the OECD reports on Taxing Energy Use (2013, 2015, 2018, 2019) provide unique information on energy and carbon taxes in OECD and G20 countries. The latest report shows that global energy consumption rose strongly in 2018, and so did energy‑related CO2 emissions, which reached a new all‑time high. This is disconcerting, as meeting the goals of the Paris Agreement will require deep cuts in emissions. The evidence also shows that tax structures are poorly aligned with the pollution profiles of energy sources.

This Special Issue will include papers covering a wide range of aspects of taxation and sustainability. It is a multi-disciplinary proposal accepting studies on individual countries as well as international comparisons. Especially welcome is empirical research on the sustainable development goals, the effect of widespread drops in statutory corporate income tax rates, trends in corporate tax burden, environmental taxation, tax collection structure and public policies for sustainable development that may have an effect on taxation.

Dr. Elena Fernández-Rodríguez
Guest Editor

Manuscript Submission Information

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Keywords

sustainability
taxation
fiscal
sustainable development goals
tax collection
tax burden
tax avoidance
effective tax rate
environmental taxes
emerging economies

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Published Papers (10 papers)

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Research

23 pages, 3566 KiB

Open AccessArticle

Corporate Social Responsibility and Corporate Tax Aggressiveness: A Scientometric Analysis of the Existing Literature to Map the Future

by Osman Issah and Lúcia Lima Rodrigues

Sustainability 2021, 13(11), 6225; https://doi.org/10.3390/su13116225 - 1 Jun 2021

Cited by 12 | Viewed by 5294

Abstract

Using data from 2003 to 2020, this study uses a scientometric approach to investigate the nexus between Corporate Social Responsibility (CSR) and corporate tax aggressiveness research. The objective is to identify under-explored regions, variables, citation patterns, theories, and unexplored topics in the body of knowledge to establish trends in publications on issues about corporate social responsibility and corporate tax aggressiveness. In addition, the study also considers publication journal areas of focus. Research linking CSR and tax avoidance using VOSviewer and triangulating with CiteSpace, by way of approach, is not found in the literature. The findings suggest that CSR and corporate tax aggressiveness researchers do not use far-reaching relevant theories and applicable findings from studies beyond their clusters. Another finding is that African countries remain under-explored due to the absence of institutional representation and an adequate number of investigators regarding CSR and corporate tax aggressiveness research. Finally, the study reveals a number of research topics to be explored. Governments, particularly in developing economies, should create policies that define taxes as part of an entity’s CSR narrative to enhance transparency and legitimacy. In addition, the study is of immense significance to master and PhD students since it provides an agenda for future research. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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15 pages, 529 KiB

Open AccessArticle

Debt Sustainability: Can EU Member States Use Environmental Taxes to Regain Fiscal Space?

by Ioana-Laura Țibulcă

Sustainability 2021, 13(11), 5952; https://doi.org/10.3390/su13115952 - 25 May 2021

Cited by 5 | Viewed by 2474

Abstract

The COVID-19 pandemic has taken its toll on the economies of the EU member states. While policymakers have been faced with rising government spending in an effort to combat the health crisis, this has led to unprecedented levels of government debt and budget deficits. Debt sustainability has been severely affected by decreasing fiscal space, and there are significant concerns that a debt crisis is looming on the horizon for the EU. The current study aims to analyze environmental taxes as a potential solution for rebuilding fiscal space and thus improving debt sustainability in the EU. The research method used to study the impact that the four types of environmental taxes may have on fiscal space is the dynamic panel regression model, estimated using the Generalized Method of Moments (GMM). The conclusions show that all four categories of environmental taxes can help the EU member states regain fiscal space and improve their debt sustainability. The research results show that the strongest positive impact on fiscal space will be achieved by energy taxes and transport taxes. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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15 pages, 286 KiB

Open AccessArticle

Tax-Exempt Status and Associated Factors among Charitable Foundations in China

by Shuyang Wang, Xiaoyu Wu, Zhilin Li and Jing-Hua Zhang

Sustainability 2021, 13(8), 4116; https://doi.org/10.3390/su13084116 - 7 Apr 2021

Viewed by 2528

Abstract

Tax exemption plays an important role in the sustainability of charitable organizations (COs). The 2016 Charity Law of China provides stronger tax incentives for charity donations. Using 767 observations of Chinese charitable foundations (CFs) during 2010–2018 from the China Foundation Center database and manually collected tax-exempt status data, this study applies multivariate logistic regression analysis to examine the association between tax-exempt status and related key factors, such as transparency and donation dependency. This study found that a one-point increase in the transparency score of a CF is associated with a 3.9 percentage points higher likelihood of having at least one type of tax-exempt qualification (OR = 1.039, p < 0.01). There is in general a significantly positive association between tax-exempt status and donation dependency of CFs in China. After 2016, the CFs responded actively to the tax incentive provided by the Charity Law, which in return requires a higher level of transparency. These results suggest that taxation under the legal system may effectively function to promote the sustainability of charity foundations in China in the long run. Further studies are needed to explore in-depth why CFs with advanced tax-exempt qualifications concentrate in Beijing and Shanghai. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

28 pages, 1077 KiB

Open AccessArticle

Measuring Financial Impacts of the Renewable Energy Based Fiscal Policy in Colombia under Electricity Price Uncertainty

by Alejandro Castillo-Ramírez and Diego Mejía-Giraldo

Sustainability 2021, 13(4), 2010; https://doi.org/10.3390/su13042010 - 13 Feb 2021

Cited by 5 | Viewed by 2147

Abstract

This paper analyses the financial implications, from the point of view of an investor in renewable energy, which sells the energy for an uncertain price of electricity and decides to take advantage of the Colombian tax policy over the renewable energy. The policy, known as Investment Tax Allowance (ITA), encourages installation of renewable projects in a country traditionally dominated by hydro power. Price is modeled as a non-stationary autoregressive stochastic process with normally distributed error terms. Costs, and uncertain revenue and taxes are considered to assess the financial impact on a solar project when the policy is implemented. Since impact varies according to project ownership, two cases are evaluated: a generation company (GENCO-1) that only owns the solar project; and, an existent generation company (GENCO-2) that owns a portfolio of projects. Results indicate that if ITA is applied, it is likely that the GENCO-1 cannot take the full advantage of the incentive, as opposed to the GENCO-2. Although this policy might not satisfy planner objectives since it does not guarantee the construction of significantly high capacity of new renewable energy projects, it definitely represents an attractive mechanism to decrease tax obligations at the GENCO-2 level. Finally, a theoretical analysis shows that investment cost affects the mean of the present value; whereas tax rates impacts both its mean and standard deviation. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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15 pages, 600 KiB

Open AccessArticle

European Green Deal: Environmental Taxation and Its Sustainability in Conditions of High Levels of Corruption

by Igor Kotlán, Daniel Němec, Eva Kotlánová, Petr Skalka, Rudolf Macek and Zuzana Machová

Sustainability 2021, 13(4), 1981; https://doi.org/10.3390/su13041981 - 12 Feb 2021

Cited by 9 | Viewed by 2712

Abstract

Despite environmental taxation’s presumed advantages for long-term sustainable development goals, the problematic institutional conditions associated with high levels of corruption could become a significant obstacle undermining these efforts. Taking the example of the Czech Republic as a benchmark, the aim of this article is to evaluate the impact of corruption and its implications on the size of the official and the shadow economy in the sector burdened with environmental excise tax while confronting it with the sector not burdened with such tax. In terms of methodology, an extended DSGE (Dynamic stochastic general equilibrium) model has been used. In the case of the shadow economy, the two sectors, burdened and not burdened with environmental taxes, followed a similar trend. However, concerning the official economy, this research found out that if environmental taxation is not applied, then lower, non-systemic corruption has a positive effect on the size of production as the effect of increased workforce motivation clearly dominates, suppressing the effect of reduced capital accumulation. Conversely, in the sector burdened with environmental taxation, corruption has an almost unequivocally negative effect on the production economy. In this sense, corruption has the capacity to limit the implementation of sustainable development policies including the European Green Deal, especially if it is systemic in nature. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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12 pages, 247 KiB

Open AccessArticle

Funding Pandemic Prevention: Proposal for a Meat and Wild Animal Tax

by Morgane Larnder-Besner, Julien Tremblay-Gravel and Allison Christians

Sustainability 2020, 12(21), 9016; https://doi.org/10.3390/su12219016 - 30 Oct 2020

Cited by 5 | Viewed by 2760

Abstract

Market prices fail to properly account for the risk of zoonotic diseases associated with animal agriculture and cross-border trade in domesticated and wild animal products, the magnitude of which is demonstrated by the COVID-19 pandemic. Corrective measures are required to internalize the cost of pandemics. Communicable disease prevention and mitigation is a global public good and contributions to its production should be made at the international level. To compel states to pay for costs resulting from domestic consumption patterns that are externalized to other countries, this paper proposes a global contribution regime based on state consumption of animal products. We lay out the technical aspects of a cost-internalizing tax that could accomplish this goal and demonstrate its feasibility in light of existing trade law constraints. The paper concludes that the proposed cost-internalizing tax would be an appropriate method to deter pandemic risk-inducing activities and fund zoonotic disease outbreak prevention and pandemic response. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

13 pages, 265 KiB

Open AccessArticle

Sustainable Tax Behavior of MNEs: Effect of International Tax Law Reform

by Hyejin Cho

Sustainability 2020, 12(18), 7738; https://doi.org/10.3390/su12187738 - 18 Sep 2020

Cited by 5 | Viewed by 2713

Abstract

As tax is related to the sustainable growth of societies around the world, international tax avoidance by multinational enterprises (MNEs) has gained public attention. The Organization for Economic Co-operation and Development (OECD) introduced the Base Erosion and Profit Shifting (BEPS) Action Plan to promote sustainable tax behavior of MNEs. To guide policymakers and regulators in curving MNEs’ tax schemes utilizing market imperfection, this paper empirically assesses whether the international law reform regarding information disclosures on global operation achieves the intended result of lowering MNEs’ tax avoidance. In addition, the conditional effect of family ownership and intangible asset intensity is addressed to find the factors that strengthen the tax avoidance level of MNEs. This study employs propensity score matching and difference-in-differences method to analyze the changes in international tax liabilities of Korean MNEs in response to BEPS Action Plan 13. The empirical results show that the sustainable tax behavior of MNEs increased when international tax law demanded that they reveal critical information on global allocation of income, economic activity, and taxes paid among countries. Furthermore, the results show that there was a higher increase in the international tax liabilities of MNEs with higher intangible asset intensity. The results suggest to policymakers that the private information disclosure of MNEs’ global operation and sharing such information is essential in tackling MNEs’ BEPS activities, and intangible assets are indeed an important source of tax avoidance. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

17 pages, 448 KiB

Open AccessArticle

A Real Option Approach to Sustainable Corporate Tax Behavior

by Anne Van de Vijver, Danny Cassimon and Peter-Jan Engelen

Sustainability 2020, 12(13), 5406; https://doi.org/10.3390/su12135406 - 3 Jul 2020

Cited by 12 | Viewed by 3960

Abstract

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). Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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29 pages, 6550 KiB

Open AccessArticle

The Tax Incentives in the IVTM and “Eco-Friendly Cars”: The Spanish Case

by Sergio Luis Náñez Alonso

Sustainability 2020, 12(8), 3398; https://doi.org/10.3390/su12083398 - 22 Apr 2020

Cited by 10 | Viewed by 3889

Abstract

This article describes research that was carried out regarding the tax incentives in Spain associated with the “eco-friendly car,” which are reflected in its share of taxes on motor-driven vehicles. The study focused on the electric vehicle, the hybrid, and the liquefied petroleum gas vehicle. First, the current regulatory framework was addressed. The maximum bonus limits were considered, as well as how each of 68 cities examined the incentives. The qualitative and quantitative differences among the Spanish cities were discussed. Next, the annual tax savings on the Tax on motor vehicles (IVTM) quota were calculated, and the differences in the tax savings depending on the municipality and type of vehicle were noted, as well as the temporal duration of the bonus. Finally, the average tax savings were calculated based on the type of vehicle, power and municipality. It is clear that, although the tax incentives are positive, they must be complemented by other measures if the public authorities in Spain want to achieve a change in mentality and an increase in the acquisition of “eco-friendly cars” that eliminate pollutants (powered by the combustion of gasoline or diesel). Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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31 pages, 362 KiB

Open AccessArticle

Implementation of the 2030 Agenda Sustainable Development Goals in Spain

by Alejandra Boto-Álvarez and Roberto García-Fernández

Sustainability 2020, 12(6), 2546; https://doi.org/10.3390/su12062546 - 24 Mar 2020

Cited by 64 | Viewed by 11440

Abstract

This paper examines the implementation status of sustainable development goals (SDG) in Spain and explores the extent to which the country will be able to meet European standards in sustainability by the year 2030 within the current regulation and praxis. Based on data retrieved from official statistics supplied by Eurostat for a set of indicators useful to monitor the goals our calculations prognosticate whether Spain will reach the European Union average values. The display of each relevant indicator is provided, as well as discussion on their evolution and some recommendations for an effective implementation of SDG on the mid-term, notwithstanding the peculiar political and socio-economic situation in the country. The study proves that Spain needs to adopt urgent regulatory measures and public policies in order to fulfill its commitment to the 2030 Agenda. Otherwise, if the ongoing trend continues, most of the Spanish indicators will not reach the European average values in the overwhelming majority of the goals, including areas as relevant as the struggle for education or environment. Full article

(This article belongs to the Special Issue Taxation and Sustainability)

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