Professor Lynne Oats – Lynne oats is an Emerita Professor of Taxation at Exeter University.  Her research interests centre on taxation as a social and institutional practice, embracing historical and contemporary tax policy both nationally and internationally. In addition to holding senior editorial roles, Lynne has published widely in the accounting and taxation fields.

Professor Carla Edgley – Carla Edgley is a Professor in Accounting and Taxation, Cardiff Business School, Cardiff University. She is an Associate Editor of Critical Perspectives on Accounting Journal, and the Interdisciplinary Accounting Review. Her research interests are in interdisciplinary, social studies of accounting and taxation.

Professor Emer Mulligan – Emer Mulligan is a Personal Professor of Taxation and Finance, Head of the Accountancy and Finance Discipline and Director of the Tax Clinic, at the J.E. Cairnes School of Business and Economics, University of Galway, Ireland.  Her research interests are in the intersection of social policy, citizenship and taxation, as well as regulatory relationships and compliance in the tax arena.

In an era marked by global disruption and mounting pressures on public finance, tax systems are under intense scrutiny and the need for critical tax scholarship is more pressing than ever. Building on the legacy of the 2010 tax special issue of Critical Perspectives on Taxation, a follow-on special issue is now available online.

In our editorial, ‘Critical Perspectives on Taxation: In praise of heterophony’, we explore what it means to be a critical scholar and a critical tax scholar today (Oats, Edgley & Mulligan, 2025). This blog piece provides a brief overview of the editorial which is structured into three main sections.

Reflecting on Topics and Trends in Recent Tax Research

The first section commences with reflections on developments in critical tax research since 2010 – within and beyond Accounting.  While some progress has been made in Accounting, we highlight innovative, inspirational tax research that has emerged in other disciplines including Fiscal Anthropology, Fiscal Geography and Law and Society among other domains.  We also, however, observe the continuing, pervasive influence of economics in tax scholarship. This dominance, often referred to as “economic imperialism,” frames tax primarily as an economic issue, sidelining its social and political dimensions.

Papers in the Special Issue

In section two, we discuss featured contributions in the Special Issue and how they engage in myth-busting across tax narratives.

One contribution examines conflicts of interest in tax scholarship in Finland, by Santtu Raitasuo. This paper explores how tax academics often have multiple roles in Finland, as educators and researchers but also practitioners providing tax advisory services to clients. He addresses a myth whereby legal scholarship, which is a particularly important resource drawn upon by the judiciary, is assumed to play an influential ‘objective’ part in legal interpretation. He develops an argument that tax academics are in positions where they have an incentive to propose legal arguments in scholarly work that advance the interests of their private clients. This in turn influences the judiciary and distorts the distributive effects of the tax system in favour of tax advisory clients (Raitasuo, 2024).

Ute Schmiel confronts what she argues to be a persistent myth that hinders the development and implementation of wealth taxes. Her paper highlights arguments that are often employed to stymie discussion such as difficulties in measuring wealth, defining the concept of ‘ability to pay,’ and addressing the mobility of the wealthy elite. Politicians tend to shy away from this debate, despite calls from NGOs and the OECD to reflect on the low level of tax revenues that are generated by so called wealth taxes globally. Schmiel’s paper challenges this status quo by asking whether there are reasons to tax wealth from a tax equity perspective reimagining the concept of ‘ability to pay’ and wealth, by referring to political-cultural market theory (Schmiel, 2024). Her paper is particularly meaningful as wealth taxation is currently a topical issue. Many governments in countries such as Norway and Australia as well as organisations like the OECD are debating how to address rising inequality and fiscal pressures following recent global crises

A third paper by Dennis de Widt and Lynne Oats challenges the assumption that cooperative compliance between tax authorities and large corporations is always driven by high-level expertise and mutual trust. By comparing the UK and Netherlands, the authors show how similar regulatory systems can evolve differently. They introduce a novel framework viewing these interactions as dynamic strategic action fields where different actors like tax authorities, businesses, and advisers interact, negotiate, and shape each other’s behaviour around tax compliance within the broader tax landscape. Notably, the study shifts focus from corporate tax avoidance to everyday practices, revealing that most large firms aim to comply (De Widt & Oats, 2024).

The fourth myth exposed, by Maryse Mayer and Yves Gendron, is about the role of the media in reporting tax scandals.  The authors focus on how the media have represented the controversial phenomenon of corporate tax avoidance by exploring the international “LuxLeaks” news leak, and scandal. Given the enormous influence of the media over societal views around corporate tax behaviours and tax avoidance, this paper explores formulaic ways of reporting. The authors bring to the fore, how the subject of tax avoidance is characterised by an ambiguous normative framework, as the media rely on very different norms to elaborate distinct normative standpoints (Mayer & Gendron, 2024).

Together, these papers exemplify the potential of critical scholarship to disrupt dominant narratives and to open new avenues for inquiry.

Critical Perspectives

In the third section of the paper, our reflections, we explore what it means to be a critical scholar, particularly within the field of tax scholarship, and the challenges but also meaningful opportunities that come with this commitment. While there are many ways to approach critical work, Mouritson et al. (2002) remind us that, at its heart, being critical means refusing to be naïve and questioning how power dynamics shape and influence tax systems.

We introduce examples of scholarship that illustrate what we call “four critical moves—and mixed moves,” offering strategies inspired by music and song lyrics to expand research perspectives and reveal blind spots.

Move 1: Filling the silences – our understanding of tax is replete with silences; caught up with disciplinary strictures, but also things that policy makers do not want to hear. There are myriad gaps, blind spots, unexplored areas, and things we otherwise never see to be investigated in tax research.

Move 2: Expanding the repertoire – it has long been a concern that where the scope of tax research is narrow, misunderstandings follow. A tight focus on technical aspects of tax overlooks the ‘why’ and ‘who’ questions: why are particular policies pursued, and who sets the agenda, for whose benefit? This critical move looks beyond the constrained repertoire of tax knowledge and expertise to consider the wider context. This includes drawing on new ways of thinking about tax issues.

Move 3: Probing the lyrics – this move encourages reflexivity about how narratives are woven around tax issues where phrases are used as if they have a singular agreed meaning, when they carry multiple meanings and resonate differently with different audiences.

Move 4: Unsticking the needle – a stuck needle on a vinyl record results in the same musical phrase on repeat. We often see, for example, debate around aspects of fairness in tax systems stuck in such a loop. Similarly, discussion around wealth taxes has, in many jurisdictions, become the tax equivalent of Groundhog Day. This move encourages us to break away from entrenched ways of thinking by looking at particular causes and issues from a different angle to reveal the limitations of established positions and taken for granted myths.

Mixed moves and evolving moves – these moves are such that authors may adopt more than one move.  it is important to probe, with a critical eye, the power dynamics that stifle debate. We discuss in our conclusion the potential that multiple voices and performers have for critical tax research, playing melodies in different but complementary ways to add broader perspectives and dimensions

Concluding Thoughts

We advocate for heterophony in tax research, not just a multitude of voices (where many voices blend in harmony), but many different voices that strengthen the texture and quality of our work, and a richness of distinct voices engaging in ‘simultaneous otherness,’ fostering creativity and substantial impact.

This issue is a call to action, to question dominant narratives and reimagine the possibilities of tax research. We urge broader engagement, mentorship, and support for early-career scholars, and we emphasise the importance of building a vibrant and inclusive community of critical tax researchers. We need to think about how to enable scholars to join this conversation, and how we mentor the next generations of students, especially PhD students, to explore inspirational new directions, not only in the strands of tax they study but also in how research is approached. This requires both top-down and bottom-up efforts. Senior scholars can provide guidance, share expertise, and foster supportive networks and structures, while early-career colleagues play a pivotal role from the ground up, in bringing fresh perspectives into research, and challenging established assumptions. As a community we can organise workshops, reading groups, and events that foster inclusive dialogue, support PhD students.

Creating such a community means fostering spaces for dialogue, collaboration across disciplines and geographies, and sustained support for emerging scholars. Looking ahead, we hope to see critical perspectives on taxation continue to grow, not only in number, but in depth, diversity, and influence.

Dr. Amir Pichhadze, Research Assistant at York University (Canada). Formerly, a Judicial Law Clerk at the Tax Court of Canada (TCC), a Tax Law Lecturer at Deakin University Law School (Australia), and a Tax Policy Advisor at the Department of Finance (Canada). He studied at the University of Oxford (MSc in Higher Education), LSE (LLB in Law; LLM in Taxation), University of Michigan Law School (LLM in International Tax and SJD) and the University of Toronto.  He has written several scholarly articles on the present topic, including Pichhadze, Amir (February 2015) ‘Exposing Unaddressed Issues in the OECD’s BEPS Project’ World Tax Journal, 7(1), 99-167; and Pichhadze, Amir (2017) ‘The Role of Contract Interpretation in Transfer Pricing Law: Lessons from Canada’ Canadian Tax Journal, 65(4), 849-92.  For further information, see: Here

Based on recent caselaw in Canada, this article cautions about the risk of failing to correctly construe transactions when conducting transfer pricing analysis, which could result in a finding that an error of law and/or fact has been made.

The need to delineate transactions in transfer pricing

Around the world, domestic transfer pricing laws require that, for the purposes of applying tax law, the terms of controlled cross-border transactions should be similar to those that were (or would have been) agreed to, had the contracting parties been dealing at arm’s length. As explained in the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“TPG”),[1] this requires delineating the conditions and economically relevant circumstances of the transaction(s) which the related parties executed. The delineated controlled transaction can then be compared to a comparable uncontrolled transaction, i.e. one that is similar in conditions and circumstances, but carried out at arm’s length. If need be, based on this comparison, the tax authority could adjust the terms [of the delineated transaction] to bring them in line with those that were agreed to in comparable transactions that took place. Where comparable transactions that took place cannot be identified, the terms [of the delineated transaction] would be brought in line with those in a hypothetical transaction that could presumably be comparable in circumstances, but without the conditions of control (i.e., comparable hypothetical transactions involving parties dealing at arm’s length under otherwise similar circumstances).

An accurate delineation of the controlled transaction requires considering different comparability factors such as the contractual terms agreed to by the parties, the functions performed by each party, the characteristics of the property or service provided, the economic circumstances of the parties and the market in which the parties operate, and the business strategies pursued by the parties.[2]

Having accurately delineated the controlled transaction, if it is found that some of its terms are different from those that were (or would have been) agreed to in a comparable uncontrolled transaction, the law will typically authorize some or all the following consequences. It could authorize adjusting some of the terms in the delineated transaction so that taxation will be based on the same delineated transaction but with the adjusted terms. It may also be found that, under comparable circumstances, unrelated parties would have agreed to a wholly different transaction. To deal with such a scenario, the law may authorize the tax authority to replace the whole delineated transaction (rather than only replacing some terms of the delineated transaction) with another transaction. Taxation would then be based on the terms of the replacement transaction. It may also be determined that parties dealing at arm’s length would not, under comparable circumstances, be expected to agree to any transaction. In such a scenario, the law may authorize completely ignoring the delineated transaction for tax purposes, without any adjustments or replacements.

The need to correctly construe the contractual terms of the controlled transaction being delineated

Generally, taxation is based on the ‘true nature’ of a transaction.[3] Therefore, before applying the relevant tax law, it is necessary to begin by correctly delineating the transaction(s) under assessment.[4] There have been numerous cases, involving the application of different tax laws, in which the ‘true nature’ of the transaction(s) under assessment has been in dispute, which  required the courts to construe the transaction(s) in accordance with the applicable law of contractual interpretation.[5] While courts may consider the litigants’ interpretation of the transaction, it is ultimately the task of the court to apply the correct interpretation.[6] A trial’s court failure to properly construe a transaction could be reviewed on appeal,[7] and may amount to a legal error of law and/or fact.

The risk of failures to construe contracts in transfer pricing disputes

It would seem reasonable to expect that taxpayers [or their professional advisors], tax authorities, as well as judges, would know to correctly construe the contractual terms if and as necessary for the purposes of delineating the actual controlled transaction under assessment. Yet, my review of tax disputes in selected jurisdictions – Canada, the UK, the US, and Australia – revealed that in no transfer pricing dispute to date has this issue of interpretation been pleaded or raised by the courts in transfer pricing disputes. Yet just because the issue may not have been pleaded or raised by the courts, it does not necessarily mean that the task of interpretation was not relevant and should have been pleaded and/or addressed by courts. One such case, which I have identified in my research on transfer pricing, is the tax dispute in Canada that involved the transfer pricing arrangements of GlaxoSmithKline Inc. (Canada v GlaxoSmithKline 2012 SCC 52).

Through my study of the litigants’ and courts’ approach to their analysis in this case, I identified the risk that, as evidenced by the parties’ submissions and the courts’ written opinions, all overlooked, either advertently or inadvertently or by mistake, the necessary role of contractual interpretation when carrying out the task of delineating the controlled transaction which was under assessment . The task of contractual interpretation was, however, necessary in order to deal with a contentious issue in this case: what was the ‘true nature’ of the controlled transaction under assessment?

The OECD clarifies the matter in its revised guidelines

In 2017, in line with my own recommendations,[8] the OECD published its revised guidelines which, unlike the previous version of the guidelines, stated at [1.43] that, for the purpose of delineating the transaction between related parties in cross-border transactions, the applicable principles of contract interpretation ought to be considered. Recently, in the book Fundamentals of Transfer Pricing Vol. 1, reference was made to my research when discussing the need to determine the intentions of the parties for the purpose of delineating controlled transactions.[9] The authors pointed out that, as is now required by the OECD’s TPG, the principles of contract interpretation aid in ascertaining the legal implications of contractual obligations.[10]

The risk of an error: an example

Since then, another notable case has processed through the Canadian courts. While this was not a case in which a transfer pricing arrangement was being assessed under Canada’s transfer pricing law, it involved the contractual interpretation of transfer pricing arrangements for the purposes of determining a transfer price amount to be paid as damages for breach of a patent. As will be explained next, this case exemplifies the potential outcomes of failing to correctly construe a transfer pricing arrangement. This ought to alert litigators and courts to the risk of failing to correctly undertake this necessary task of construction where it is necessary to distill the ‘true nature’ of a transfer pricing arrangement.

In Laboratoires Servier, Adir, Oril Industries, Servier Canada v. Apotex,[11] Canada’s Federal Court found that Apotex’s manufacturing and sale of perindopril infringed ADIR’s Canadian patent. Then, in ADIR v Apotex,[12] ADIR, the Plaintiff, was given the option of receiving either a portion of the Defendant’s [Apotex] profits or an amount that reflects the damages suffered from the infringement. ADIR chose to receive a potion of the profits.

As established in Monsanto Canada Inc. v. Schmeiser,[13] the amount of profits that Apotex would have to pay in damages would consist of the difference between its “gross revenues and its current and capital expenses” that was “directly attributable to the infringement.”[14]

Apotex, the Defendant, sold perindopril to Apotex UK, a foreign affiliated company. On the basis of its interpretation of the transfer-pricing agreements between Apotex and Apotex UK, Apotex suggested that, owing to the increased risk that Apotex UK would bring an infringement suit, it charged Apotex UK a “higher price” for the sale of perindopril than the price (the “lower price”) paid by buyers in other countries.[15] By this view, the difference between the “higher” and the “lower” prices represented consideration paid (by Apotex UK) on account of non-patent-infringing indemnity and legal services provided by Apotex to Apotex UK.[16] Accordingly, that amount ought to be disaggregated from the total amount payable to ADIR in respect of the patent infringement.[17]

The trial judge, Gagné J., took “the view that if part of the price paid by Apotex UK and GenRx is proven to have been paid on account of those services, then the revenues should be apportioned or segregated accordingly… The question is therefore, whether or not the defendants have provided sufficient evidence proving that part of the price paid was indeed on account of non-infringing services and indemnity.” ADIR, on the other hand, interpreted the transfer-pricing agreements to mean that the transfer price was a payment only for the perindopril, and thus the whole sum was directly attributable to the patent infringement.[18]

As Justice Gagne explained, while it could take into account the different contractual interpretations of the litigants, the task of construction is ultimately determined by the court. The court therefore had to determine the true nature of the controlled transaction. Specifically with regard to the difference between the “higher” and the “lower” amounts, did the parties intend to have Apotex UK apply the difference solely as consideration paid for the indemnity and legal services or, alternatively, was that amount also consideration for the perindopril?[19] To make this determination, Justice Gagné proceeded to interpret the transfer-pricing agreements by applying the relevant principles of contract interpretation.[20] She concluded that a “proper interpretation of these agreements” did not support the assertion that “the difference between the higher price and the lower price, in the context of the export sales of Apo-perindopril to Apotex UK and GenRx, was paid solely on account of the indemnity provision and related litigation services, and not on account of the sale of the product.” Instead, in her opinion, “segregating or apportioning those revenues would not be equitable in this case.”[21]

As the FCA explained in Salt Canada v. Baker, contractual interpretation can be subject to judicial review on appeal from decisions at the Tax Court as well as in cases from the Federal Court dealing with other areas of the law such as settlement agreements, employment contracts, among others.[22] The FCA follows the SCC’s precedent that contractual interpretation “involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix.”[23] Hence, based on the SCC’s decision, the FCA stated that “contractual interpretation should be dealt with as a question of mixed fact and law, attracting a deferential standard of review unless an extricable error of law is identified.”[24] The FCA went on to note that “one example of such an extricable legal error,”  identified by the SCC in that case, “was the application of an incorrect principle.”[25]

Apotex appealed Justice Gagné’s decision on the basis that she made an error in her contractual interpretation of the transfer pricing agreements.[26] The FCA found that Justice Gagné committed an extricable error of law in her interpretation of the transfer pricing agreements, though it concluded that Apotex failed to establish that the transfer pricing agreements apportioned revenue as it alleged.[27] Even if interpreted correctly, the appellant had not demonstrated that the revenues received pursuant to the transfer price agreements were intended to be apportioned between revenue received for the drug and revenue received for the indemnity and defence costs the appellant agreed to bear.

Conclusion

It is mandatory to correctly construe contractual arrangements, where it is necessary to do so, in order to then determine their tax consequences. In transfer pricing disputes, and perhaps also in other tax disputes, there is risk that litigants as well as the courts fail to do so, either advertently or inadvertently or by mistake. Perhaps in some cases, such as the GlaxoSmithKline Inc. case, courts have not addressed the issue of construction where it was not raised by the parties in their pleadings. Nevertheless, a court could raise it as an issue that ‘stems’ from the pleaded issues or as a ‘new issue’ that was not pleaded by the parties but is required in order to ensure procedural fairness.[28] Failure to properly construe the actual transaction in question could be subject to judicial review and result in finding that an error was made. It is therefore critical for litigants and courts to be aware of, and take into consideration, the necessary role of contractual interpretation in transfer pricing disputes, as well as in tax disputes generally.