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Advantages and Disadvantages of the Six Methods of Tax Treatment of Corporate Donations: A Theoretical Study of Intellectual Enrichment in the Fields of Taxation and CSR

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  • Younis A. Battal Saleh

Abstract

Purpose: The objective of this paper is to determine the advantages and disadvantages of possible methods of tax treatment for corporate donations. This theoretical study identified six methods of tax treatment of corporate monetary and in-kind donations that can be adopted by legislative bodies and which stem mainly from six logical visions to explain the meaning and connotation of the term corporate donations. Design/Approach/Methodology: In order to determine the advantages, and disadvantages of these methods, the researcher was obliged to develop three basic criteria that can be used in determining the advantages, and disadvantages of each method. Those criteria are, Legal imbalance, economic impact, the extent to which the tax treatment is consistent with the content of the CSR idea. This study also indicated the importance of harmonizing the tax treatment with the prevailing economic, social, and cultural conditions in society. Findings: All tax treatment methods have disadvantages and advantages, but to varying degrees. Originality/Value: Through this diversity of tax treatment methods - and the advantages and disadvantages associated with these methods, legislative bodies in all countries of the world can evaluate the methods used in tax treatment that they adopt as one of the components of corporate income tax laws in those countries, and also provide an opportunity for those authorities to choose the appropriate tax treatment method that is compatible with the prevailing economic conditions in those countries.

Suggested Citation

  • Younis A. Battal Saleh, 2021. "Advantages and Disadvantages of the Six Methods of Tax Treatment of Corporate Donations: A Theoretical Study of Intellectual Enrichment in the Fields of Taxation and CSR," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(4), pages 120-144.
    • Handle: RePEc:ers:ijfirm:v:11:y:2021:i:4:p:120-144
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    References listed on IDEAS

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    1. Auten, Gerald E. & Cilke, James M. & Randolph, William C., 1992. "The Effects of Tax Reform on Charitable Contributions," National Tax Journal, National Tax Association, vol. 45(3), pages 267-90, September.
    2. Georgeta Grigore, 2010. "Ethical And Philanthropic Responsibilities In Practice," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 10(3), pages 167-174.
    3. Auten, Gerald E. & Cilke, James M. & Randolph, William C., 1992. "The Effects of Tax Reform on Charitable Contributions," National Tax Journal, National Tax Association;National Tax Journal, vol. 45(3), pages 267-290, September.
    4. Marija Mihaljevic & Ivana Tokic, 2015. "Ethics And Philanthropy In The Field Of Corporate Social Responsibility Pyramid," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 11, pages 799-807.
    5. Archie B. Carroll, 2016. "Carroll’s pyramid of CSR: taking another look," International Journal of Corporate Social Responsibility, Springer, vol. 1(1), pages 1-8, December.
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    More about this item

    Keywords

    Corporate Social Responsibility; Corporate Philanthropy; Legislative Bodies; Visions and Perceptions; Tax Treatment Methods; Tax Incentives; Advantages and Disadvantages.;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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