Taxation and Corporate Governance

Document Type

Article

Publication Date

2024

Abstract

In recent years, legal and economic research has shown a growing interest in the interaction between corporate governance and taxation. Some specific aspects have drawn more interest, particularly the tax rules related to the remuneration of directors, measures taken by management in the context of market for corporate control, and the double taxation of inter-corporate dividends. However, there is still little legal literature on many other aspects of the interplay between the two systems, and several authors have identified this gap in the literature and the dire need for further study in this “fertile area of research.” The aim of this article is to begin filling this gap by exploring some of the more intriguing aspects of the interplay between the two systems. It argues that the corporate tax can be justified on the ground that it reduces the corporate agency problem and that alternative systems have fewer desirable effects.

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