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A trademark for those who pay their taxes fairly?

Rewarding good behaviour, instead of punishing it – a proven pedagogical method. Would it also work in tackling tax avoidance? This question sparked the interest of PhD candidate Josephine van der Have. Her research investigates the potential of a trademark for fair taxation.

The battle against tax avoidance

The call for fair taxation is strong and critics are right to be concerned. The Netherlands is a key player in the world of tax avoidance. In our country, tax structures exist that allow multinationals such as Cargill to avoid paying taxes on their profits.

And so, spurred on by Europe, the Netherlands is going to battle against tax avoidance. Since 2013, a large number of tax measures have been adopted and new laws are on the way.

A paper tiger

These government measures are mandatory and prohibit companies from using certain tax structures – at least, on paper. In practice, the measures are not that effective according to Van der Have, who started her PhD research in November 2022. ‘Companies face more restrictions because of these laws, but they still find other ways to push the limits of the law to pay as little tax as possible.’

Reward good behaviour

That is why Van der Have has taken a different approach. ‘I conduct research into a trademark for fair taxation. It’s a positive stimulant that rewards “good” tax behaviour.’

This approach is the opposite to the traditional method governments use to enforce better tax ethics. Van der Have: ‘Such a trademark could have a positive effect on a company’s image.’ Those who carry the label show that their company cares about paying taxes.

‘For the record: I’m not an activist. I’m conducting independent scientific research on the usefulness of a trademark for fair taxation. That doesn’t mean I’m necessarily in favour of it.’

How would the fair tax trademark work?

Van der Have is examining whether a trademark could be successful, and, if so, under what conditions. ‘For example, who will check whether companies are allowed to carry the trademark? And once they carry it, whether they adhere to the conditions?’

The PhD candidate is used to asking these kinds of questions. While studying taxation and economics, she learned to link tax issues to the impact on society. ‘Much of my research requires me to delve into international political economics. That starts with looking at how multinationals came to be and eventually I arrive at the question: why do some multinationals avoid paying taxes more than others?’

A realistic trade mark

Her research still has a long way to go – Van der Have still has more than three years to go – but she also already has plans for the final sections. She wants to conduct interviews with representatives from multinationals. Van der Have: ‘For me, it doesn’t just stop at designing a trademark. It shouldn’t just be a good tool to combat tax avoidance in theory. I want it to be a realistic tool that is ultimately also of practical use. For that reason, I’d like to engage in a dialogue with these companies.’

‘Hands on’ mentality

Van der Have is the type of person who will be keen to get involved in the practical side of her research. If you take a look at her career so far, it’s clear she not only likes to come up with plans, but also likes to execute them herself. For instance, at primary school she started taking part in charity swims, and later on in life she became involved in the psychological support of cancer patients. More recently, during her studies, she worked for an NGO that focuses on fair taxation.

Here at our university, she remains very ‘hands on’. For instance, she’s involved in the ‘Tax Transparency Project’, a collaboration in which politicians, journalists, and NGOs can contact researchers at Leiden University if they have questions about tax matters. The advice given has led to several publications, including one on Cargill, referred to above.

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