State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities 2017, para. 37
Paragraph- Paragraph text
- Consistent with article 28 of the Universal Declaration of Human Rights, this obligation to fulfil requires States parties to contribute to creating an international environment that enables the fulfilment of the Covenant rights. To that end, States parties must take the necessary steps in their legislation and policies, including diplomatic and foreign relations measures, to promote and help create such an environment. States parties should also encourage business actors whose conduct they are in a position to influence to ensure that they do not undermine the efforts of the States in which they operate to fully realize the Covenant rights — for instance by resorting to tax evasion or tax avoidance strategies in the countries concerned. To combat abusive tax practices by transnational corporations, States should combat transfer pricing practices and deepen international tax cooperation, and explore the possibility to tax multinational groups of companies as single firms, with developed countries imposing a minimum corporate income tax rate during a period of transition. Lowering the rates of corporate tax solely with a view to attracting investors encourages a race to the bottom that ultimately undermines the ability of all States to mobilize resources domestically to realize Covenant rights. As such, this practice is inconsistent with the duties of the States parties to the Covenant. Providing excessive protection for bank secrecy and permissive rules on corporate tax may affect the ability of States where economic activities are taking place to meet their obligation to mobilize the maximum available resources for the implementation of economic, social and cultural rights.
- Legal status
- Non-negotiated soft law
- Body
- Committee on Social, Economic and Cultural Rights
- Document type
- General Comment / Recommendation
- Means of adoption
- N.A.
- Topic(s)
- Governance & Rule of Law
- Person(s) affected
- N.A.
- Year
- 2017
- Paragraph type
- Other
- Paragraph focus
- Extraterritorial obligations
- Paragraph number
- 37
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