Corporate Social Responsibility and Tax Avoidance : A Literature Review and Directions for Future Research

Tax avoidance, as a CSR issue, is critically important to a firm's long-term viability and the government's ability to function. Aggressive tax avoidance schemes for shareholder wealth maximization are problematic, since governments are left powerless to sustain basic services when earnings are stripped and sent to lower tax jurisdictions. This paper examines the extant literature on the subject of tax avoidance as it is presented in the CSR literature. Thirty-seven articles were analyzed and three overarching themes identified: (1) past developments establishing tax avoidance as a CSR component, (2) ethical aspects of tax avoidance, and (3) the role of governance in tax decisions. The academic community is not in agreement on what constitutes an appropriate managerial course of action regarding tax obligations. Some argue for the alleviation of the tax burden, others for the payment of statutory taxes. The present work consolidates the literature of this emerging field to assess its current state and suggest a way forward