The Relationship Of Tax Avoidance With Corporate Social Responsibility

1504 WordsAug 17, 20167 Pages
There is an ongoing debate on the relationship of tax avoidance with corporate social responsibility (CSR) and ethical behaviour of companies. Specifically, corporate social responsibility can be defined as companies undertake the responsibility for social welfare and development (Matten and Moon, 2008). For ethical behaviour, it is referred to govern the actions of individuals and organizations in the business under contemporary standards (Epstein, 1998). Moreover, this is the difference between tax avoidance, which companies use appropriate methods to reduce the amount of tax within the law, and tax evasion, which can be defined as illegal to reduce taxes (Hasseldine and Morris, 2013). According to US Treasury (2009), each year the US government may lose more than $345 billion revenue because of a variety of tax avoidance. Moreover, the UK government also faces the problem of losing tax, at £40 billion each year (HM Revenue and Customs, 2010). In recent years, an increasing number of governments, media, and non-government organizations claim that corporate tax avoidance is not conducive to the development of society and ethical behaviour of enterprises. The aims of this essay are to research the motivations of corporate tax avoidance, and discusses to a large extent corporate social responsibility and ethical behaviour of firms is in conflict with tax avoidance, even though they have some consistency. The first section of the essay will research the motivations of
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