Colloquium: Inga Hardeck (Universität Regensburg) "The Role of Tax Professionals in International Tax Policy"

Abstract:                                                                                                                                         This research examines tax professionals’ motivations and their strategic use of arguments when lobbying on international tax policy. We define tax professionals as external tax advisors and law or accounting firms as well as associations of these actors. Related to the role of auditors in accounting standard-setting processes, tax professionals are highly skilled experts whose motivations may range between fostering their business models, backing their clients’ interests, and supporting the regulator’s mission. Using the setting of the OECD Base Erosion and Profit Shifting project and a sample of 3,280 comment letters sent to the OECD, we find that tax professionals are more supportive of policy changes that increase the demand for consultancy activities. Especially Big4 firms use the regulator’s as well as their clients’ arguments to positively frame their positions in these cases. Tax professionals also strongly share their clients’ positions, whereas the support for the public position is weaker. Our results should be of interest for tax regulators around the globe.