Corporate taxes fail – international evasion

Conclusions This article has examined the accounts given by corporate tax avoiders involved in the Panama Papers scandal. In particular, the study analyzed 134 narratives published in newspapers in nine Latin American countries. The results show that those involved in corporate tax avoidance often use three types of denial (denial of responsibility, denial of injury, and condemnation of the condemners) when justifying their behaviors. Taking into account the possibility that the fear of stigmatization may affect the type of accounts given by perpetrators when their identity was revealed in the media, I disaggregated the data collected to explore closely the accounts not related to the condemnation of the condemners (in this case, the media). Here, I found that corporate tax avoiders build a “truth” that they use to justify their felonies. For these corporations, innovation is an intelligent deviation that companies use to create international structures and operations in secret locations that facilitate tax avoidance globally (appeal to higher loyalties, whereby the loyalty is to the principle and goal of capital accumulation/creation of more wealth). In fact, corporate tax avoiders use legal pragmatism to operate in international jurisdictions, where rules are different from those of their country of residency (claim of entitlement), while claiming that they operate as other international investors do (claim of normality). On these grounds, corporate tax avoiders leave the issue of social harm unattended as their actions are not motivated by injurious intent (claim of negative intent). The overall results of this study suggest that individuals and corporate entities engage in corporate tax avoidance because they use national and international regulations that create opportunities for crime. Therefore, corporate tax avoiders not only believe that they are not responsible for this type of offense, but maintain that they are entitled to leverage international regulations that result in their own economic benefit. This result poses challenges for those responsible for preventing corporate tax avoidance because a new global tax order is needed to contend with this phenomenon.