State-induced, Strategic, or Toxic? An Ethical Analysis of Tax Avoidance Practices Simone de Colle IÉSEG School of Management (LEM-CNRS), Paris Ann Marie Bennett National University of Ireland, Maynooth Abstract: Tax avoidance practices by Multinational Enterprises (MNEs) such as Google, Microsoft, Apple, Starbucks and others are increasingly under scrutiny both from a legal and an ethical perspective. In 2013, the OECD launched an ‘Action Plan’ to encourage the G20 countries to address Base Erosion and Proit Shifting through an internationally co-ordinated approach, arguing that tax avoidance rep- resents a risk for tax revenues and tax fairness, potentially “undermining taxpayers voluntary compliance.” The analysis of tax avoidance in the existing business ethics literature suffers from a black-and-white approach, contending either that tax avoid- ance is unethical (e.g. Prebble and Prebble 2010) or that, being legal, tax avoidance is also ethical (e.g. Houghton 1979). However, we believe that within tax avoidance practices there are important distinctions to be made. In this paper, we analyze the ethics of tax avoidance by identifying three different forms of avoidance practices: state-induced, strategic, and toxic avoidance. We develop a more nuanced approach reviewing both the ethical arguments in defense and the ethical issues associated with each form of tax avoidance. Finally, we propose an ethical framework that could assist executives and policy-makers in their decision-making concerning tax avoidance. Key Words: tax avoidance, tax evasion, toxic avoidance, tax policy, multinational enterprises, stakeholder responsibility. © Business & Professional Ethics Journal. ISSN 0277-2027. Correspondence may be sent to Ann Marie Bennett, annmarie.benentt@nuim.ie, or Simone de Colle, sd7ua@virginia.edu Business & Professional Ethics Journal doi: 10.5840/bpej20145111 Online First: May 2, 2012