Article
Version 1
This version is not peer-reviewed
The ESG Criteria Impact on Taxation
Version 1
: Received: 21 September 2024 / Approved: 23 September 2024 / Online: 24 September 2024 (11:28:38 CEST)
How to cite: Greggi, M. The ESG Criteria Impact on Taxation. Preprints 2024, 2024091797. https://doi.org/10.20944/preprints202409.1797.v1 Greggi, M. The ESG Criteria Impact on Taxation. Preprints 2024, 2024091797. https://doi.org/10.20944/preprints202409.1797.v1
Abstract
The article investigates the impact of the Environmental, Social, and Governance (ESG) criteria on the current tax systems worldwide. The ESG principles, although yet to be codified in hard law in most countries, are gaining increasing prominence in shaping business practices and policies. The article explores how these principles might influence the interpretation and application of existing tax rules, even without explicit legal mandates. It delves into four key areas where ESG considerations could play a significant role: the calculation of business income, transfer pricing regulations, the application of anti-avoidance rules, and the interpretation of the "business purpose" test. It argues that ESG principles, by redefining the purpose of a business beyond mere profit maximisation, could lead to a broader understanding of deductible costs, influence transfer pricing decisions, and impact the application of anti-avoidance measures. It concludes by emphasising the potential of ESG principles to shape the future of taxation, promoting a more sustainable and equitable approach to economic growth.
Keywords
ESG; Direct taxation; Business Income; Transfer Pricing; GAAR: Business Purpose Test; Market Economy; UN; EU; Interpretation of the Law
Subject
Social Sciences, Law
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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