John Christensen ■ Directors’ duties and tax avoidance: a view from the U.S.
Published:
30 May 2014Reading time:
< 1 minLast year we obtained a legal opinion from Farrer’s & Co which concluded that it was not possible to construe a director’s duty to maximise benefits to a company to include a positive duty to avoid tax. This opinion has helped to nail the urban myth (widely propagated by tax planners to their clients) that failure to engage actively in tax avoidance would constitute a breach of fiduciary duties.
Our attention has now been drawn to a blog by an influential U.S. lawyer noting the UK legal opinion and asking whether the same applies in the United States. The article addresses the issue of whether the business judgement rule, would inhibit directors from taking positive action to comply with prevailing tax rules or to not comply. He concludes that the BJR would do neither:
As I read the US cases, the answer is that the BJR would in fact protect either decision from judicial review.
Useful to have this view on the US position.
More here.
The author
Related articles
Let’s make Elon Musk the world’s richest man this Christmas!
Admin Data for Tax Justice: A New Global Initiative Advancing the Use of Administrative Data for Tax Research
2025: The year tax justice became part of the world’s problem-solving infrastructure
Bled dry: The gendered impact of tax abuse, illicit financial flows and debt in Africa
Bled Dry: How tax abuse, illicit financial flows and debt affect women and girls in Africa
9 December 2025
Indicator deep dive: ‘patent box regimes’
Two negotiations, one crisis: COP30 and the UN tax convention must finally speak to each other
‘Illicit financial flows as a definition is the elephant in the room’ — India at the UN tax negotiations
Taxation as Climate Reparations: Who Should Pay for the Crisis?
