The Role of Corporate Social Responsibility (CSR) in Mitigating Tax Evasion: A Comparative Study of Multinational Corporations

Abstract

Corporate Social Responsibility (CSR) has become a central concept in the corporate sector, 
particularly for multinational corporations (MNCs). As global business operations have become 
more complex, scrutiny of corporate practices, especially regarding tax obligations, has                
intensified. This study examines the role of CSR in mitigating tax evasion among MNCs,                
focusing on how various CSR practices influence tax compliance behaviour. Although                      
extensive research has addressed CSR's impact on corporate reputation, there is a notable gap 
in understanding how CSR specifically addresses tax evasion, particularly within diverse                
regulatory environments. Employing a qualitative methodology that includes case studies,             
interviews, and document analysis, this study provides comprehensive insights into the                     
motivations and outcomes of CSR initiatives related to tax evasion. A comparative analysis of 
selected MNCs indicates that those with robust CSR frameworks tend to demonstrate lower 
instances of tax evasion, suggesting that CSR can deter unethical tax practices. These findings 
underscore the importance of transparency in CSR reporting, stakeholder engagement, and the 
integration of tax strategies within CSR frameworks. This study further highlights the                       
significance of regulatory frameworks in enhancing CSR effectiveness and considers the                
potential impact of technological advancements on the future of CSR and tax compliance. The 
implications for theory, policy, and practice are discussed, emphasising the necessity for MNCs 
to prioritise ethical tax behaviour as part of their CSR commitments. Future research directions 
include longitudinal studies, cross-industry and cross-regional comparative analyses, and                      
investigations of emerging technologies to promote transparency and accountability in tax             
practices.