scholarly journals CSR and tax: a study in the transition from an ‘aggregate’ to ‘real entity’ view of corporations

2019 ◽  
Vol 31 (4) ◽  
pp. 553-573
Author(s):  
Bronwyn McCredie ◽  
Kerrie Sadiq
Keyword(s):  
Tax Reform ◽  
Tax Avoidance ◽  
Fourth Dimension ◽  
Validity And Reliability ◽  
Corporate Tax ◽  
Content Type ◽  
The Real ◽  
Mapping Software ◽  
Real Entity ◽  
Social Environmental

Purpose The purpose of this paper is to empirically test whether corporates, via publicly disclosed sentiment and in response to government initiatives such as domestic corporate tax reform measures that address transparency, are beginning to view tax as a fourth dimension of corporate social responsibility (CSR). Design/methodology/approach To determine whether corporate attitudes towards tax are changing, representations about the corporate entity by a variety of stakeholders and through numerous channels were analysed using Leximancer software. These representations were in response to four distinct Australian domestic tax reform measures instituted during and subsequent to the Australian Government Senate Inquiry into corporate tax avoidance. The use of Leximancer, a data-analysis and mapping software that automates the coding of document text, delineates concepts and identifies themes, is well suited to the nature and size of the data used (Lodhia and Martin, 2011) and ensures the validity and reliability of the results (Dumay, 2014). Findings This paper provides evidence on the efficacy of global and domestic tax-reform measures that target tax avoidance through transparency. This is demonstrated by a progressive change in corporate attitudes towards tax and suggests a transition, albeit nascent, from the aggregate view to the real entity view of a corporation. As such, this study provides evidence of the inception of a corporate conscience when it comes to tax, whereby tax is instituted as a fourth dimension of CSR. Research limitations/implications Using a theoretical framework which adopts the historically accepted views of the firm, the authors argue that a shift from the aggregate view to the real entity view of a corporation will have the following implications: an expansion of the dimensional factors of CSR (economic, social, environmental and tax); a new standard or definition of corporate responsibility which encompasses both legal and moral considerations and has transparency at its core (Narotzki, 2016); and a new outlook where consumers realise that they have the power to influence and demand action from corporates. Originality/value This paper uses state-of-the-art software to empirically test the efficacy of global and domestic tax reform measures that target transparency, ultimately providing evidence supporting the adoption of these measures and the recognition of a new dimension of CSR, tax.

Women on the board of directors and corporate tax aggressiveness in Australia

2016 ◽  
Vol 29 (3) ◽  
pp. 313-331 ◽  
Author(s):  
Grant Richardson ◽  
Grantley Taylor ◽  
Roman Lanis
Keyword(s):  
Board Of Directors ◽  
Selection Bias ◽  
Tax Avoidance ◽  
Multivariate Regression Analysis ◽  
Corporate Tax ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Self Selection ◽  
The Board Of Directors ◽  
The Impact

Purpose This paper aims to investigate the impact of women on the board of directors on corporate tax avoidance in Australia. Design/methodology/approach The authors use multivariate regression analysis to test the association between the presence of female directors on the board and tax aggressiveness. They also test for self-selection bias in the regression model by using the two-stage Heckman procedure. Findings This paper finds that relative to there being one female board member, high (i.e. greater than one member) female presence on the board of directors reduces the likelihood of tax aggressiveness. The results are robust after controlling for self-selection bias and using several alternative measures of tax aggressiveness. Research limitations/implications This study extends the extant literature on corporate governance and tax aggressiveness. This study is subject to several caveats. First, the sample is restricted to publicly listed Australian firms. Second, this study only examines the issue of women on the board of directors and tax aggressiveness in the context of Australia. Practical implications This research is timely, as there has been increased pressure by government bodies in Australia and globally to develop policies to increase female representation on the board of directors. Originality/value This study is the first to provide empirical evidence concerning the association between the presence of women on the board of directors and tax aggressiveness.

The impact of ownership structure on corporate tax avoidance with corporate social responsibility as mediating variable

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anissa Dakhli
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Corporate Tax ◽  
Data Set ◽  
Content Type ◽  
Corporate Social ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the direct and indirect relationship between institutional ownership and corporate tax avoidance using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach This study uses panel data set of 200 French firms listed during the 2007–2018 period. The direct and indirect effects between managerial ownership and tax avoidance were tested by using structural equation model analysis. Findings The results indicate that institutional ownership negatively affects tax avoidance. The greater the proportion of the institutional ownership, the lower the likelihood of tax avoidance usage. From the result of the Sobel test, this study indicated that CSR partially mediates the effect of institutional ownership on corporate tax avoidance. Practical implications The findings have some policy and practical implications that may help regulators in improving the quality of transactions and in achieving more efficient market supervision. They recommend to the government to add regulations and restrictions to the structure of corporate ownership to control corporate tax avoidance in French companies. Originality/value This study extends the existing literature by examining both the direct and indirect effect of institutional ownership on corporate tax avoidance in French companies by including CSR as a mediating variable.

Corporate dispersion and tax avoidance

2019 ◽  
Vol 13 (3) ◽  
pp. 706-732 ◽  
Author(s):  
Kun Su ◽  
Bin Li ◽  
Chen Ma
Keyword(s):  
Internal Control ◽  
Chief Executive Officers ◽  
Tax Avoidance ◽  
Chief Executive ◽  
Corporate Tax ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Executive Officers ◽  
The Impact

Purpose The purpose of this paper is to investigate the effects of corporate dispersion on tax avoidance from geographical and institutional dispersion perspectives by using evidence from China. Design/methodology/approach Using a panel data of Chinese listed firms during 2003-2015, this paper estimates with correlation analysis and multiple regression analysis. Findings Both geographical and institutional dispersion are negatively associated with the degree of corporate tax avoidance. Furthermore, corporate governance mechanisms and female chief executive officers can mitigate the negative relation between corporate dispersion and tax avoidance. The results also indicate that ineffective internal control is one of the channels through which corporate dispersion reduces tax avoidance. Originality/value This is the first paper about the impact of firm dispersion on the degree of tax avoidance, complementing the research content of diversification and corporate decision-making.

US corporate tax reform depends on issue linkage

2015 ◽  
Keyword(s):  
Common Ground ◽  
Tax Reform ◽  
Tax Rates ◽  
Corporate Tax ◽  
Full Spectrum ◽  
Effective Tax Rates ◽  
Content Type ◽  
White House ◽  
Corporate Tax Reform ◽  
The Eu

Significance Corporate tax may be one area where it could be possible to find some common ground between the otherwise gridlocked Republican Congress and the Democratic White House. President Barack Obama has proposed a one-time repatriation tax on cash held overseas by companies to be followed by a full-spectrum tax code overhaul. Impacts Lobbyists may support a repatriation amnesty, but will obstruct any initiative that raises effective tax rates. European Commission independence from member states may see the EU lead on corporate tax investigations. Australia will move slowly on corporate tax reform if the coalition government remains distracted by leadership disputes.

US corporate tax reform would risk highway fund

2015 ◽  
Keyword(s):  
House Of Representatives ◽  
Tax Reform ◽  
Fuel Efficiency ◽  
Corporate Tax ◽  
Short Term ◽  
Content Type ◽  
Long Duration ◽  
Corporate Tax Reform ◽  
The Cost

Significance On July 15, the House of Representatives passed a short-term funding measure, against the wishes of many in the Senate. US infrastructure is facing a fiscal crunch. Taxes on gasoline have traditionally supported highway appropriations. However, eroding purchasing power and greater fuel efficiency means that about 30% of highway funding must be found from other sources, difficult in the current Congress. The present round of appropriations expires on July 31. Impacts A corporate tax might provide a long-term resolution, but the pursuit of it would come at the cost of seeking more modest solutions. These would provide stability for a year or two, necessary for projects of long duration. If corporate tax reform is not completed before the end of 2015, it will probably not get done in a presidential election year. If Congress were to rely on the prospect of these taxes for the HTF, it might find itself in a similar position in a few months.

G20 countries will adopt new corporate tax accord

2015 ◽  
Keyword(s):  
National Level ◽  
Tax Avoidance ◽  
Tax Treaties ◽  
Corporate Tax ◽  
Profit Shifting ◽  
Content Type ◽  
Major Threat ◽  
The Eu

Significance The rulings come as the EU advances legislation to increase transparency on corporate tax rulings and after the G20 on October 9 endorsed the new OECD Base Erosion and Profit Shifting (BEPS) framework for countering corporate tax avoidance. Impacts These EU rulings suggest similar decisions are imminent involving Apple in Ireland and Amazon in Luxembourg. The rulings will inspire further challenges to similar arrangements; they are the major threat to similar policies. Most BEPS measures will require changes to bilateral tax treaties and could face national-level delays or rejections. Monitoring of BEPS implementation will commence, but compliance will be voluntary and thus limited.

Policy will not support US growth as much as expected

2017 ◽  
Keyword(s):  
Tax Reform ◽  
Tax Rates ◽  
International Financial Institutions ◽  
Corporate Tax ◽  
Donald Trump ◽  
Content Type ◽  
Corporate Tax Reform ◽  
Capital Spending ◽  
The Impact ◽  
Economic Outlook

Subject US economic outlook. Significance US equity markets have rallied and the dollar has strengthened against the euro since President Donald Trump was elected in November 2016 -- largely on expectations that stimulative policies will be introduced. One of Trump's campaign promises pledged to reform corporate taxes and lower tax rates, which would be expected to boost capital spending. He also pledged to raise infrastructure spending by 1 trillion dollars over ten years, as well as to reduce regulatory burdens to help jumpstart business investment. Impacts Trump could use executive powers in a more sweeping fashion if he cannot deliver changes via legislation. US opposition to reforms of international financial institutions could reduce the momentum behind global cooperation. If the proposal to finance the 1-trillion-dollar infrastructure plan by public-private partnerships is a success, 2018 GDP will benefit. If agreed by 2018 or 2019, corporate tax reform could boost GDP growth although the impact could be diluted if other countries follow suit.

Widespread US tax reform appears increasingly unlikely

2017 ◽  
Keyword(s):  
House Of Representatives ◽  
Stock Markets ◽  
Budget Deficit ◽  
Healthcare Reform ◽  
Tax Reform ◽  
Corporate Tax ◽  
Content Type ◽  
The Us ◽  
Corporate Tax Reform ◽  
Business Confidence

Subject Prospects for US corporate tax reform Significance The US administration is growing increasingly anxious for legislative successes, focusing attention on whether Congressional Republicans can deliver on their promise of corporate tax reform. Sustained business confidence and buoyant stock markets suggest businesses remain hopeful, but as Congress gets to work on reforming the tax code, intra-party rifts will increasingly reveal themselves. Impacts Senate debate on healthcare reform saw many controversies arise; a similar course looks unavoidable for corporate tax reform. Stock markets might celebrate a simple and temporary tax cut, but bond investors would flee from the prospect of a wider budget deficit. Other countries would likely react with their own cuts; widespread low rates mean that tax already has less influence on a firm’s location. Losing control of the House of Representatives in the November 2018 mid-term elections would make reform trickier for the Republicans.

Contingent fit between business strategies and environmental uncertainty

2019 ◽  
Vol 28 (1) ◽  
pp. 139-167
Author(s):  
Dianwicaksih Arieftiara ◽  
Sidharta Utama ◽  
Ratna Wardhani ◽  
Ning Rahayu
Keyword(s):  
Business Strategy ◽  
Tax Avoidance ◽  
Environmental Uncertainty ◽  
Emerging Countries ◽  
Data Availability ◽  
Business Strategies ◽  
Corporate Tax ◽  
Competitive Intensity ◽  
Content Type ◽  
Positive Effect

Purpose This study aims to examine the contingent fit between business strategies and environmental uncertainty and its effect on corporate tax avoidance. Design/methodology/approach This study uses a two-stage linear regression method comprising multinomial logistic regression and panel data regression. Findings This study finds that under highly uncertain conditions, the contingent fit of prospector strategy is higher than the contingent fit of other two strategies, i.e. defender and analyzer strategy. The study fails, however, to demonstrate that under highly uncertain conditions, this study finds that under highly uncertain conditions the contingent fit of a “prospector” strategy is higher than for “defender” and “analyzer” strategies. The study fails, however, to demonstrate that under highly uncertain conditions the contingent fit of a defender strategy is higher than that of an analyzer strategy. The study also finds that the contingent fit between prospector strategy and environmental uncertainty has a positive effect on tax avoidance, and this effect is higher than for the misfit strategies. Moreover, in such environments the fit level of a defender strategy has a negative effect on tax avoidance while environmental uncertainty has a positive effect on tax avoidance. Research limitations/implications This study estimated competition uncertainty using the Herfindahl index to measure competitive intensity in an industry. However, only the data from public listed companies was used due to a lack of data availability for non-public companies. Consequently, further study is recommended to include the total number of companies within an industry as a proxy of competitive intensity. Practical implications The results implied that managers, not only in Indonesia but also in other countries as well, specifically emerging countries (generally the environmental uncertainty in emerging countries is high) should consider the contingent factors when making business strategy decisions. Managers must be aware of the contingent fit with environmental uncertainty, and therefore, must assess external conditions prudently. Furthermore, the results of this study showed that managers should pay more attention to the effects of their decisions on corporate tax avoidance, while aligning their business strategy decisions with corporate tax planning strategy to obtain an optimal outcome for the company. Social implications The Directorate General of Taxes and Board of Fiscal Policy, as regulators, need to comprehend environmental uncertainty to issue various policies that can ease the burden of the taxpayer to remain in business, particularly during the turbulence environment so that can prevent the companies doing illegal practices and will eventually reduce the number of tax avoidance. Originality/value This study developed alternative measure of tax avoidance, which is tax avoidance latent variable score (TAXLVS). The TAXLVS was derived from confirmatory factor analysis of previous existing tax avoidance measurements. This study is also the first that analyzes the effect of business strategy on tax avoidance using contingency approach.

Tax avoidance and firm value: evidence from China

2014 ◽  
Vol 5 (1) ◽  
pp. 25-42 ◽  
Author(s):  
Xudong Chen ◽  
Na Hu ◽  
Xue Wang ◽  
Xiaofei Tang
Keyword(s):  
Avoidance Behavior ◽  
Firm Value ◽  
Agency Costs ◽  
Fixed Effects ◽  
Tax Avoidance ◽  
Developed Countries ◽  
Corporate Tax ◽  
Content Type ◽  
Information Transparency ◽  
Negative Tone

Purpose – The purpose of this study is to examine whether corporate tax avoidance behavior increases firm value in Chinese context. A large number of studies conduct their designs on the consumption that tax avoidance represents wealth transfer from government to enterprises and therefore enhances firm value. This study argues that, contrast to developed countries, tax avoidance does not necessarily add value to opaque Chinese firms relative to transparent counterparts due to higher agency costs. Design/methodology/approach – Using a large sample of Chinese listed-firms data for the period 2001-2009 and fixed effects regression model, this study examines the relation between tax avoidance and firm value. A series of robustness checks are conducted to alleviate the concern of endogeneity. Findings – The authors find that tax avoidance behavior increases agency costs and reduces firm value. The authors further find that information transparency interacts with corporate tax avoidance, moderating the relation between tax avoidance and firm value. Investors in China react negatively to corporate tax avoidance behavior, but this negative reaction could be mitigated by information transparency. The results are robust to a series of alternative treatments, including varied measures, first-order differential approach and 2SLS. Originality/value – The results suggest that tax avoidance does not necessarily increase firm value, part of gains are encroached by self-serving managers. Moreover, investors in China downplay the significance of tax avoidance, although corporate information transparency could soften their negative tone.

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