It's For the Better Sake of Society - Why Don't Swedish MNCs Disclose a CbC Report on Taxes?

Abstract: Using a multiple case study and theories on voluntary disclosures, this thesis aims to investigate why Swedish multinational corporations (MNCs) listed on Large Cap at Nasdaq OMX Stockholm do not voluntarily disclose a country-by-country (CbC) report on taxes and what the inherent risks in their reasoning are. Based on an abductive research approach, the study firstly finds that the decision to not disclose a CbC report can be explained by proprietary cost theory, institutional theory and partly by legitimacy theory. More specifically, the MNCs refrain from a CbC disclosure since the perceived costs of a disclosure outweigh the benefits, since there is no standard, since few other MNCs currently disclose and since the MNCs perceive themselves to achieve legitimacy through other measures. Secondly, using stakeholder theory and a wider scope of legitimacy theory, the study further finds that the inherent risks in the MNCs' reasoning relate to an inappropriate prioritization of the prominent stakeholders, a too narrow perception of the relevant stakeholders and a too short-sighted view on legitimacy. Finally, the thesis finds that a disclosure of a CbC report, i.e. a proactive approach to manage legitimacy, might not be necessary nor possible for all MNCs.