Cross-Cultural Evidence on Tax Disclosures in CSR Reports – A Textual Analysis Approach

This study examines how dimensions of culture influence variations in views about the link between corporate tax payments and corporate social responsibility (CSR). Using textual analysis and a newly-developed set of keywords unique to a tax setting, we analyze 4,438 CSR reports from 24 countries, which is the largest sample that has been analyzed in a tax context. We find significant variation across countries in whether and how often tax is mentioned and whether corporate tax payments and CSR are discussed as complements or substitutes. Using Hofstede's (2001) framework of cultural dimensions, we find cross-cultural variations in the relevance placed on tax in CSR reports. Further, firms in certain cultures are more likely to highlight their tax paid as a contribution to tax revenue or point out their socially responsible tax practices (complements) while others tend to criticize the tax system or their tax burden (substitutes)