Co-operative compliance in taxation of large corporations in Finland : process and outcomes

Abstract

This dissertation is a case study in Syvennetty asiakasyhteistyö, in the implementation of the co-operative compliance principles and the development of the initiative as a regulatory regime. Using qualitative methods, this dissertation describes and analyzes the change that has taken place in the regulation of Finnish corporate taxation. The consequential regulatory transformation, transnational influence, the underlying principles, and fairness of Syvennetty asiakasyhteistyö are researched topics in this study. This dissertation consists of an introduction and four separate essays: an essay describing and analyzing Syvennetty asiakasyhteistyö followed by three essays with different viewpoints to the initiative. In 2008 and later in 2013, the OECD proposed new recommendations to be applied in the taxation of large corporate taxpayers. These new recommendations, under the name of co-operative compliance, were aimed at replacing the earlier confrontational tax practices with new measures based e.g. on mutual trust, transparency and co-operation between the tax agency and the corporate taxpayers. In Finland, these co-operative principles were embraced in an initiative Syvennetty asiakasyhteistyö by the Finnish Large Taxpayers’ Unit (Konserniverokeskus, KOVE). The principles of co-operative compliance are expected to bring benefits to both the taxpayers and the tax administration in the form of decreased administrative burden, improved tax certainty and predictability of taxation, to name a few. The end goal of co-operative compliance is improved corporate tax compliance as a result of behavioral changes regarding tax avoidance and tax planning. This dissertation examines taxation as an organizational-societal phenomenon, where of significance are the various tax field practices and the interrelationships between the different actors and the various practices. Overall, this dissertation presents a field-level analysis of the tensions between reform ideals and practices of taxation.