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The Curious Case of Corporate Tax Avoidance: Is it Socially Irresponsible?

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Abstract

In contrast to many aspects of the social responsibility of business, CSR scholarship has been largely silent on the issue of the payment of corporate tax. This is curious because such tax payments are often considered a fundamental and easily measured example of a company’s citizenship behavior. However, because the payment of corporate tax can often be legally avoided, this activity represents a boundary condition for CSR. If the law and CSR suggest that a company should pay its fair share of tax, yet many successful companies actively avoid this social obligation, should they be considered socially irresponsible. This paper explores the issue of tax avoidance and the implications it has for any credible definition and measure of CSR. It also highlights an aspect of corporate practice that is deliberately hidden from public view.

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Chapter © 2015

Notes

  1. Tax minimization is defined as looking for ways to minimize the tax bill in relation to transactions usually undertaken, whereas tax avoidance is defined as transactions entered into solely for the purpose of generating a tax benefit (Bowler 2009, Para. 2.5).

  2. In April, 2012 he was awarded a Pulitzer Prize for this explanatory journalism.

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Authors and Affiliations

  1. Marketing Discipline Group, University of Technology, Sydney, Broadway, Ultimo, NSW, 2007, Australia

    Grahame R. Dowling

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Dowling, G.R. The Curious Case of Corporate Tax Avoidance: Is it Socially Irresponsible?. J Bus Ethics 124, 173–184 (2014). https://doi.org/10.1007/s10551-013-1862-4

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