Analysis the effect of corporate social responsibility on tax avoidance with profitability and firm size as moderating variables
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Date
2020-11-06Author
Karundeng, Frandy
Upa, Vierly Ananta
Dananjaya, Yanuar
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Abstract: Companies that take benefits of natural resources are required to
implement corporate social responsibilities (CSRs). Besides, they have an
obligation to pay tax. CSR and tax have the same goal to improve the
community welfare, while both are expenses for the companies. These
similarities allow companies with high CSR activities to decrease the amount
of tax payable through tax avoidance practices. The results of this study
show that the higher the level of CSR activities, the higher the company’s
responsibility for its tax obligations. Moreover, CSR has stronger influence
on decreasing tax avoidance if CSR is carried out by large companies.
Profitability does not moderate the relationship because of the weakening
economic conditions of mining industry. In addition, companies with high CSR
activities assumed that tax payment became a part of CSR, so they did not
consider CSR and tax payment to be separated and mutually replaceable