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Corporate Social Responsibility Versus Tax Avoidance Practices

Author

Listed:
  • Stoian Ciprian-Dumitru

    (Universitatea Babes Bolyai Cluj Napoca, Facultatea de Stiinte Economice si Gestiunea Afacerilor)

Abstract

Worldwide crisis has made multinational companies that are engaged in corporate social responsibility actions to manage their businesses through the lens of various tax avoidance practices. The content of this paper is important due to the fact that tries to identify the impact in case of companies active in corporate social responsibility actions versus their tax structures orientation.Corporate social responsibility literature did not paid enough attention on the impact of the tax avoidance practices of companies. Tax, as a concept, brings in itself an important corporate financial impact with subsequent effects for the life of multiple citizens in countries where private entities are operating. Even though companies are usually expressing their ethical and responsible conduct in respect of the social environment, there are many cases when the business practices were not aligned with the declared corporate behavior. This paper seeks firstly to examine whether companies engaged in tax avoidance practices (ex. offshore tax havens) consider that continue to act socially responsible. Secondly, the paper examines the influence on attending the stakeholdersâ€(tm) goals for those companies practicing tax avoidance and its implications on corporate social responsibility actions. Moreover, the paper focuses also on the aspects described before from the perspective of the corporate entities operating in Romania. This paperâ€(tm)s intention is to use and to develop the results of previous research carried out by Lutz Preus (University of London) and, subsequently, by Senators Levin, Coleman and Obama in their “Stop Tax Haven Abuse Bill†. The implications and the objectives of this material are to highlight, to identify and to spot clearly the relations and the influences of the tax haven practices of corporations versus their undertaken social responsibility actions. Moreover, this paper brings a fresh perspective of this topic from the Romanian market.I consider that this paper triggers in itself a good presence in nowadays business environment, due to the fact that stakeholders are becoming more and more aware on both corporate actions versus their tax efficient structures. Many of the aspects described were already “tasted†in practice by various stakeholders, while many multinational corporations started to become realistic about the risk of being “socially responsible†through tax schemes.

Suggested Citation

  • Stoian Ciprian-Dumitru, 2012. "Corporate Social Responsibility Versus Tax Avoidance Practices," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1081-1086, July.
    • Handle: RePEc:ora:journl:v:1:y:2012:i:1:p:1081-1086
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    File URL: http://anale.steconomiceuoradea.ro/volume/2012/n1/159.pdf
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    References listed on IDEAS

    as
    1. Sikka, Prem, 2010. "Smoke and mirrors: Corporate social responsibility and tax avoidance," Accounting forum, Elsevier, vol. 34(3), pages 153-168.
    2. James R. Hines & Eric M. Rice, 1994. "Fiscal Paradise: Foreign Tax Havens and American Business," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 149-182.
    3. Prem Sikka, 2010. "Smoke and mirrors: Corporate social responsibility and tax avoidance," Accounting Forum, Taylor & Francis Journals, vol. 34(3-4), pages 153-168, September.
    4. Hampton, Mark P. & Christensen, John, 2002. "Offshore Pariahs? Small Island Economies, Tax Havens, and the Re-configuration of Global Finance," World Development, Elsevier, vol. 30(9), pages 1657-1673, September.
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    More about this item

    Keywords

    Corporate social responsibility; Tax haven; Tax avoidance; corporate financial implications; Investments;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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