Comparison of “italian Tax Mores” with the Jim Underwood Model

CASE STYDY: Comparison of “Italian Tax Mores” with The Jim Underwood model

Based in this case study, the tax department of Italy, based on its past experiences, simply assumes that all the companies in Italy do not show their correct incomes. They try to save some money from the taxes. Hence for they also assume that all the foreign companies operating in the Italy do not pay the taxes like the domestic companies. Therefor as usual they call this American company who operates in Italy to discuss their taxes.

The Jim Underwood model talks about three steps: 1. Does it violate any moral absolutes?  2. Is it legal? 3. Do any of the moral philosophical approaches apply? The very general principles in Italy to pay taxes are to understate the earnings and pay fewer taxes to the government. Then when the officials invite them to see their taxes, they come to an end with the settlement with the officials. I understand that this is a very common practice that happens in Italy to understand the earnings of any company in Italy. This violates the moral absolutes. I, as a General Manager would pay all my taxes correctly and talk to the officials confidently as I would have all the documents to prove them that I have paid my all the taxes correctly. I know that at the first stage no one would believe me that I have shown all the earnings and paid taxes in full. I would go to the upper level officials and make them understand with all my documents in support. At last they have to believe me and help me out. They would not even invite me anytime in future, as they know that I do pay my all the taxes in full. I would not understate my earnings in any case.