Article: Analysis of the effect of corporate social responsibility on tax avoidance with profitability and firm size as moderating variables Journal: International Journal of Society Systems Science (IJSSS) 2020 Vol.12 No.3 pp.215 - 230 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. Inderscience Publishers - linking academia, business and industry through research

Title: Analysis of the effect of corporate social responsibility on tax avoidance with profitability and firm size as moderating variables

Authors: Frandy Karundeng; Vierly Ananta Upa; Yanuar Dananjaya

Addresses: Accounting Study Program, Faculty of Economics and Business, Universitas Pelita Harapan, Jl. Jend. Ahmad Yani, 288, Surabaya 60234, Indonesia ' Accounting Study Program, Faculty of Economics and Business, Universitas Pelita Harapan, Jl. Jend. Ahmad Yani, 288, Surabaya 60234, Indonesia ' Management Study Program, Faculty of Economics and Business, Universitas Pelita Harapan, Jl. Jend. Ahmad Yani, 288, Surabaya 60234, Indonesia

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.

Keywords: corporate social responsibility; CSR; tax avoidance; profitability; firm size; sustainability; tax ratio; tax payment; mining industry; Indonesia; voluntary; tax aggressiveness.

DOI: 10.1504/IJSSS.2020.111353

International Journal of Society Systems Science, 2020 Vol.12 No.3, pp.215 - 230

Received: 23 Nov 2019
Accepted: 28 Jan 2020
Published online: 23 Nov 2020 *

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Title: Analysis of the effect of corporate social responsibility on tax avoidance with profitability and firm size as moderating variables

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