Tax avoidance, tax management and corporate social responsibility (original) (raw)
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Is Corporate Social Responsibility Performance Associated with Tax Avoidance
This study examines whether corporate social responsibility performance is associated with corporate tax avoidance. Employing a matched sample of 434 firm-year observations (i.e., 217 tax-avoidant and 217 non-taxavoidant firm-year observations) from the Kinder, Lydenberg, and Domini database over the period 2003-2009, our logit regression results show that the higher the level of CSR performance of a firm, the lower the likelihood of tax avoidance. Our results indicate that more socially responsible firms are likely to display less tax avoidance. Finally, the results from our additional analysis show that the CSR categories community relations and diversity represent particularly important elements of CSR performance that reduce tax avoidance.
Suripto, 2024
Research aims: This study examines the role of corporate social responsibility in moderating the effect of earnings performance and institutional ownership on corporate tax avoidance of companies in the Investors 33 index between the 2018-2022 period. Design/Methodology/Approach: This study developed and estimated two regression models with panel data of 165 observations. These models were estimated by the random effect estimator. Research findings: This study found that corporate social responsibility strengthens the negative effect of earning performance on corporate tax avoidance. Companies with high earnings performance and those more socially responsible are likely more compliant in paying taxes. It confirms the corporate culture theory in Indonesian companies with relatively high share performance. On the other hand, this study also uncovered that corporate social responsibility increases the positive effect of institutional ownership on corporate tax avoidance. The large percentage of institutional ownership balanced by more corporate social responsibility activities could trigger companies to engage in more significant tax avoidance. These findings indicate that institutional investors of 33 companies in the investors index are more oriented on returns than company reputation. Theoretical contribution/Originality: As far as known, this study is the first to explain the moderating role of corporate social responsibility on the effect of earnings performance and institutional ownership on corporate tax avoidance in the context of companies with high share performance. Practitioner/Policy implication: This study urges the government to supervise the corporate social responsibility activities issued by companies to ensure that they are not generated as a corporate tax avoidance motive. Research limitation/Implication: This study did not check for possible bias caused by outlier data. This study also did not control how institutional investors are represented on the board of commissioners, so the effect of IO tends to be difficult to explain based on this perspective.
Suripto, 2021
This study aims to obtain empirical evidence regarding the influence of Corporate Social Responsibility, Good Corporate Governance, and Management Compensation on Tax Avoidance. The population in this study are mining companies listed on the Indonesia Stock Exchange in 2016-2018. Determination of the sample using purposive sampling technique, obtained a sample of 8 companies with 40 observational data. The analysis technique and hypothesis testing are carried out by using panel data regression analysis through Eviews-9. The results show that Corporate Social Responsibility has a positive effect on Tax Avoidance, Good Corporate Governance has no effect on Tax Avoidance, and Management Compensation has a negative effect on Tax Avoidance.
Restaurant Business, 2019
This study was to analyze corporate social responsibility (CSR) and the application of good corporate governance (GCG) could reduce action tax avoidance action (T.Avoid) on manufacturing companies. The sample used a public company listed on the Indonesia Stock Exchange. This study design using quantitative methods, and testing hypotheses by using Partial Least Square method with Smart PLS. The result is a significant direct effect of CSR and GCG against T.Avoid with values t-Statistics (61.558and 20.616) is greater than t-table (1.985).While the indirect effect, the results are significant CSR and GCG against T.Avoid through profitability as an intervening variable with a value of t-Statistics(23.094) is greater than t-table (1.985).Implications government needs to give attention to CSR and corporate governance practices that can reduce T.Avoid. T.Avoid even did not rule can be omitted, so that revenues can be maximized sector through taxation to fund the development of the State.
The Influence of Corporate Social Responsibility on Tax Avoidance
Journal of Applied Business, Taxation and Economics Research
Tax avoidance is an action to minimize the tax expense because tax is a burden which reduces profits. This research is conducted to investigate how corporate social responsibility affects on tax avoidance empirically. This is classified as causal research with quantitative approach. The population used in this research is all consumer goods manufacturing companies which are registered in Indonesia Stock Exchange period 2019-2020 with a purposive sampling technique to obtain 49 samples after outliers. All of the data samples were taken from the annual reports and financial statements. Multiple linear regression analysis is used to test the effect of corporate social responsibility on tax avoidance using the SPSS version 22. The result of this research shows that corporate social responsibility positively and significantly affects tax avoidance.
Does corporate social responsibility affect tax avoidance: Evidence from family firms
Corporate Social Responsibility and Environmental Management, 2019
The purpose of this paper is to shed light on the effect of corporate social responsibility performance on tax avoidance. It also examines whether family ownership affects tax avoidance practices by socially responsible performance. Based on an international sample of 6,442 firm‐year observations from 2006 to 2014, we use several panel‐data regression models. We find that social and environmental performance is negatively related with tax avoidance so that firms with a greater socially responsible performance show a lower tax‐saving practices. However, we find that this negative relation is lower in family‐owned firms, what suggests that despite the fact that family firms show a greater socially responsible behavior aimed to preserve their socioemotional endowments, family ownership is positively associated with tax avoidance practices.
CSR and tax avoidance: A review of empirical research
Corporate Ownership and Control
This article is a literature review that covers quantitative empirical research on the association between corporate social responsibility (CSR) and corporate tax avoidance. We conduct a structured literature review and evaluate the empirical-quantitative results with regard to the CSR–tax avoidance link and vice versa. The association between CSR and tax avoidance is both theoretically and empirically ambiguous. However, the majority of studies finds a negative association between CSR and tax avoidance. Nevertheless, results are highly dependent on measurement of the respective constructs and other marginal conditions. Comparability of recent research on the issue is in particular limited due to heterogeneous CSR and tax avoidance metrics and due to a potentially bidirectional relationship. Results imply that there is not necessarily a stable association between CSR performance, as measured by CSR scores or ratings, CSR reporting, and a firm’s tax practices. Thus, socially responsi...
The Impact of Tax Avoidance and Environmental Performance on Tax Disclosure in CSR Reports
The Journal of the American Taxation Association
This study explores how and why firms voluntarily discuss taxes in corporate social responsibility (CSR) reports. Using a textual analysis approach, we analyze 2,984 CSR reports from 22 countries to identify tax disclosures, including instances of firms explicitly relating taxes to CSR (“socially responsible tax disclosures”). We find that on average firms provide limited tax information and tend to use disclosures portraying tax payments as beneficial for society rather than presenting strategies to ensure socially responsible tax behavior. When examining possible influences on firms’ disclosure decisions, we find robust evidence of a negative association between socially responsible tax disclosures and environmental performance, consistent with firms using the disclosures to build or repair reputational capital. We also find some evidence of a positive association between socially responsible tax disclosures and tax avoidance, particularly among U.S. firms. Our results should be u...
Accounting Analysis Journal, 2022
Purpose : The company’s existence can be maintained by increasing the firms value every period, which will affect the welfare of investors. This study aims to examine and analyze the effect of tax avoidance, corporate social responsibility disclosure on firm value with managerial ownership as a moderating variable. Method : This study uses a sample of mining companies listed on the Indonesia Stock Exchange for 2016-2019. In this study, tax avoidance uses the Effective Tax Rate proxy, and corporate social responsibility disclosure uses the Corporate Social Responsibility Index. Firm value is measured using Tobin’s Q, and ownership structure as a moderating variable is measured by managerial and institutional ownership proxies. Findings : The results showed that tax avoidance and corporate social responsibility disclosure had no effect on firm value with firm size and capital intensity as control variables. Managerial ownership and institutional ownership significantly impact the relationship between tax avoidance and firm value with firm size and capital intensity as control variables. Managerial ownership and institutional ownership have no significant effect in moderating the relationship between corporate social responsibility disclosure and firm value with firm size and capital intensity as control variables. Novelty : The research used institutional ownership and managerial ownership as part of ownership structures to moderate the relationship between tax avoidance, corporate social responsibility disclosure, and firm value.
The British Tax Review, 2016
While there have been regular debates on corporate tax avoidance, a distinguishing feature of the current interest is the involvement of a wider audience which includes society in general. By analysing both tax related disclosures in company annual reports and corporate social responsibility reports the authors examine how managers of companies who have been subject to specific criticism of their alleged tax avoidance respond to such criticism. Using a legitimacy theory framework to identify four disclosure themes: explicit tax philosophy, implicit tax philosophy, tax conduct and tax contribution, companies’ reports for the 11 year period 2004–2005 to 2014–2015 have been analysed. The authors have found what appears to be evidence of inconsistency on the part of managers in identifying appropriate responses which the authors attribute to uncertainty as to the status of tax avoidance. The uncertainty is apparent in variation over time both within companies and between companies and i...