Study On Tax Avoidance In Corporate Charitable Donation

In the long river of history,the traditional virtue of charity has a long history.In the past hundred years,the fact that enterprises have never stopped participating in charity undoubtedly proves that donation is the inevitable choice for enterprises to achieve sustainable development.As an important source of national fiscal revenue,corporate tax avoidance has been attracting wide attention from the government and the public.As we all know,paying tax according to law is the basic social responsibility of each enterprise,and the highest performance of enterprises ’ social responsibility is to participate in charitable donations.Corporate tax avoidance damages national revenue and affects the overall interests of the public;corporate donation benefits other social individuals and organizations at the expense of internal profits of the enterprise;Therefore,corporate charitable donation and tax avoidance are antagonistic based on the perspective of corporate social responsibility.The traditional concept is that the more charitable enterprises pay more attention to fulfill their social responsibilities and prefer moderate means to avoid or even taxes.However,there have been repeated reports that many companies involved in charitable donations have committed serious tax avoidance,including giants such as Apple and Microsoft.This paper believes that enterprise participation in charitable donation will deviate from social responsibility,but as a shelter of tax avoidance.This paper combines theory with empirical evidence,first analyzes the relationship between enterprise charitable donation and tax avoidance,and then empirically verifies the internal role mechanism of tax avoidance in enterprise charitable donation,and also analyzes the influence of property rights nature,internal governance level and external regulatory environment on tax avoidance in enterprise charitable donation.From the theoretical analysis,Based on the theory of strategic charitable behavior,resource dependence theory,social exchange theory,and stakeholder theory,It is concluded that the role of tax avoidance in enterprise charitable donation includes two aspects: direct and indirect: the direct approach refers to the preferential tax policies allowing enterprises ’ some charitable donation expenditure to make pre-tax deduction;Indirect means refers to charitable donation is a hidden political donation of enterprises,Businesses can use charitable donations to exchange resources with the government,Thus to obtain invisible tax relief;At the same time,charitable donation enterprises will gain the goodwill of consumers,investors,media and other stakeholders,To enhance the public’s trust in corporate brands,It greatly reduces the cost of enterprises to adopt radical tax avoidance means.In terms of empirical results,the charitable donation of enterprises is significantly and positively related to the degree of tax avoidance,which shows that the charitable donation behavior of Chinese enterprises deviates from the original intention of fulfilling social responsibility and realizes the purpose of tax avoidance.In addition,the original sample is returned to property rights,and the results show that there is no positive difference on corporate charitable donation with different property rights,indicating that the tax evasion in corporate charitable donation is universal.Then,with the corporate governance index and local tax collection and management intensity represent the internal and external environment of the enterprise,concluded that the internal governance level and external regulatory environment will play a negative role in regulating the relationship between enterprise charitable donation and tax avoidance,indicating that the illegal tax avoidance in enterprise charitable donation can be controlled.Finally,based on the research conclusions,the countermeasures and suggestions are proposed.For the government,it should improve the preferential tax policies for charitable donation,establish the evaluation mechanism of charitable donation,establish pro-clean government-enterprise relations,and clarify the boundary between the market and the government.Tax authorities should put an end to government officials ’ intervention in tax law enforcement,strengthen the intensity of tax collection and supervision;and treat active charitable donations and enterprises that do not participate in charitable donations equally to ensure the fairness and justice of tax law enforcement.For the public,we will support the construction of third-party evaluation institutions,strengthen the publicity of social responsibility,strengthen the supervision role of public opinion,and encourage enterprises to conduct relevant information disclosure.For enterprises,we should establish a correct moral concept of social responsibility,improve the internal governance structure,and standardize the enterprise business behavior.