“We need to rethink the notion that morality is covered by the law. That is not true.”


“We need to rethink the notion that morality is covered by the law. That is not true.”

Boardroom Breakfast - Tax in the Boardroom

Jeroen Dijsselbloem, former president of the Eurogroup and ex-minister of Finance, pleads for a revival of moral. That triggered an interesting debate about tax laws, competition and responsibility during the latest Deloitte Boardroom Breakfast meeting: ‘Should legislation come first and surprise everyone, or should society and corporates be leading?’

The financial crisis in 2008 has been a wake up-call in many ways. “One of the issues that jumped back on top of the agenda is fairness”, according to Jeroen Dijsselbloem. “More and more, the corporate world is also a part of this debate and is asked to play a role in it. Matters like globalization, inequality, climate change and disruptive technologies have entered the boardroom. Tax policy is a part of that, because it’s crucial in the topic of fairness.”


“Make explicit what the moral of your company is and lead by example.”

‘Morality’ is not ‘moralizing’

Responsible tax planning, says Dijsselbloem, boils down to the question: what is the aim of your company? “When you talk about taxation, is it just about complying with the law? That is not enough. You have to realise that the public interest is a responsibility for all of us, not just for the government. We also need to rethink the notion that morality is covered by the law. That is not true. ‘Morality’ has been mistaken for ‘moralizing’ for a long time. But we’ve come to a turning point: make explicit what the moral of your company is, lead by example and live by it. Of course you can bring tax planning into the discussion, but don’t structure your company just for tax planning reasons. If the outcome of your planning is that you don’t pay any taxes in countries where you do have activities, intuitively you must realise something must have gone wrong. And make sure that not just the audit committee, but the board as a whole discusses tax regularly and substantively.” Dijsselbloem also mentions that as a minister he had to have his own tax forms and declarations checked before he handed them to the Dutch IRS: “I thought that was very comfortable. It could be useful for all of you as board members to ask your tax department to look at yours. The reputation of leaders in the corporate world is directly linked to the reputation of a company itself; your integrity directly linked to the trust that customers put in your company.”

Limited to treaties and laws

Not everyone agrees with Dijsselbloem’s point of view on responsible tax planning: “We have chosen our public representatives. They are the ones that make the laws. Wrong or right, that doesn’t matter. One of the things they have to take into account is whether morality is there. If they have done that and the laws are executed, there’s no more need for a discussion about morality.” With this argument, the thesis ‘In conducting international tax planning, only treaties and laws should (really) be taken into account’ was supported. Several opponents of the thesis counterpart: “It’s about international tax planning and there is no international government, so it has to become your own responsibility. If you don’t think about more than just the laws, you would always go to the country where you pay the least taxes, which you cannot explain in public. Not anymore.” “Moral is the most important thing for any company”, one participant goes a step further. “Laws and treaties are external compasses; choices should be driven by your internal compass.” Another participant whole-heartedly rejects this statement: “Politicians have plenty of time to change laws. We have to compete with companies who can act according to different tax laws and rules. If you want me to be Mr. Nice Guy, I chop my own head off.” But Dijsselbloem reacts: “Should legislation be in front and surprise everyone, or should society and corporates be leading? Your approach would mean that no one does anything until the legislator steps in and makes you comply with new rules. But then don’t come complaining to politicians about the density of rules and the intrusion of regulators.”


“Make sure tax planning is the result of the discussion you’ve had about it; stand by your choice and know how to defend it.”

Independent tax opinion

For Patrick van Min, partner of Deloitte, the discussion about responsible tax planning is even more important than the outcome. “For the past twenty years companies have been trying to get as close as possible to paying zero taxes. That is no longer the right answer. But I don’t judge companies that still want to choose for lower taxation. Just make sure it is the result of the discussion you’ve had about it; realize that there may be a time that you will need to defend that choice. Companies often ask for the number behind behaving responsibly, since they know the numbers behind tax structures. But it’s very difficult to assess what happens if you do not behave responsible. You can’t put a number on doing the right thing.” Interviews with CFO’s prove that the knowledge of tax is limited in advisory boards. “So we came up with eight questions members can ask in the tax triangle. You don’t ask the tax department if your company is doing okay, like you don’t ask the cook in a restaurant if the food is okay. You include the tax department, but you form an independent tax opinion. I think tax people should be best friends with internal audit people. They travel the world and are easily able to ask basic questions in other countries your company has operations in. And one comforting thought to top it off: many organizations we have seen regarding tax in the boardroom show that where the attention for responsible tax is higher, the tax rate goes down, not up, as a result of increased interest in tax as a whole. Maybe that’s the number for doing the right thing after all.


“In companies where the attention for responsible tax is higher, the tax rates go down, not up.”

Questions for the tax triangle (tax director, CFO, supervisory board)
  • What is our tax strategy and policy?
  • Are we prepared for the tax future?
  • Do we have a vision on transparency?
  • Are we truly compliant?
  • Are we prepared for the public domain?
  • How is Tax leveraging technology that the rest of Finance uses? 
  • Are we truly in control?
  • Is Tax generally adding value?

Around the Boardroom program

The Boardroom Breakfast is part of the Supervisory Board Program and CFO Program, under the umbrella of the Around the Boardroom Program of Deloitte The Netherlands. More information about these programs can be found at www.deloitte.nl/AtB.

More information?

Would you like to know more about Responsible Tax, the Boardroom Breakfast, or about the Around the Boardroom program? Please contact Caroline Zegers at czegers@deloitte.nl / +31 (0) 6 5318 3728 or Frank Geelen via fgeelen@deloitte.nl / +31 (0) 6 2239 7053.

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