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The Influence of Social Responsibility Practices on Tax Planning: An Empirical Study for Companies Listed on Euronext Lisbon

Author

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  • Pedro Ferreira Silva

    (ESTG—Escola Superior de Tecnologia e Gestão_Edifício D, Leiria Polytechnic, 2411-901 Leiria, Portugal)

  • Cristina Sá

    (CARME—Centre of Applied Research in Management and Economics, School of Technology and Management, Polytechnic Institute of Leiria, 2411-901 Leiria, Portugal)

  • Teresa Eugénio

    (CARME—Centre of Applied Research in Management and Economics, School of Technology and Management, Polytechnic Institute of Leiria, 2411-901 Leiria, Portugal)

Abstract

This paper analyzes the influence of social responsibility practices on the development of tax planning activities in companies listed on Euronext Lisbon. Although scientific research into social responsibility and tax planning is not new, scientific studies into the relationship between these two themes is a developing area of research that still raises many questions. This study was carried out on a sample of 30 companies listed on Euronext Lisbon, using data for the 2018 and 2019 periods. The hypotheses were formulated based on a literature review on this subject. A multiple linear regression model was developed to validate the hypotheses. The results show that the social, corporate governance, environmental, or economic components of corporate social responsibility do not influence tax planning. However, the results show that company size negatively impacts tax planning, i.e., larger companies have lower effective tax rates. In the sample studied, larger companies implemented more tax planning strategies. In this way, this study can complement the understanding of the relationship between social responsibility practices and tax planning activities in Portugal and internationally.

Suggested Citation

  • Pedro Ferreira Silva & Cristina Sá & Teresa Eugénio, 2024. "The Influence of Social Responsibility Practices on Tax Planning: An Empirical Study for Companies Listed on Euronext Lisbon," IJFS, MDPI, vol. 12(3), pages 1-19, July.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:3:p:73-:d:1445015
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    References listed on IDEAS

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    1. Manuel Castelo Branco, 2021. "Corporate Social Responsibility, the Fight Against Corruption and Tax Behaviour," CSR, Sustainability, Ethics & Governance, Springer, number 978-3-662-63735-7, May.
    2. Gupta, Sanjay & Newberry, Kaye, 1997. "Determinants of the variability in corporate effective tax rates: Evidence from longitudinal data," Journal of Accounting and Public Policy, Elsevier, vol. 16(1), pages 1-34.
    3. Schwartz, Mark S. & Carroll, Archie B., 2003. "Corporate Social Responsibility: A Three-Domain Approach," Business Ethics Quarterly, Cambridge University Press, vol. 13(4), pages 503-530, October.
    4. Roman Lanis & Grant Richardson, 2015. "Is Corporate Social Responsibility Performance Associated with Tax Avoidance?," Journal of Business Ethics, Springer, vol. 127(2), pages 439-457, March.
    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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