Study On Tax Avoidance Effect Of Charitable Donation By Listed Companies

Since 2008,enterprises have become the main force of charitable donations in China,but the charitable donations of enterprises seem to contradict the business objectives of maximizing profits.In the context of the “tax-sharing system”,local governments have certain “tax discourse rights”,which may compensate some “tax benefits” to charitable donations.Therefore,charitable donations may be a means for companies to avoid taxation.From this perspective,this paper firstly sorts out the relevant research results at home and abroad,defines the concept of corporate charitable donation and tax avoidance effect,and analyzes the theoretical mechanism how charitable donation by listed companies brings out tax avoidance effect.Secondly,it analyzes the status quo of charitable donations by listed companies from the scale and structure of corporate donations,the industry distribution,regional distribution and financial characteristics of donated enterprises,and analyzes the tax avoidance status quo of listed companies which was measured by various indicators.Then,using the fixed effect model to empirically analyze the relationship between the charitable donation and the degree of tax avoidance of listed companies.And do some subsample regression which is divided according to nature of property,regions and industries.The study found that:(1)charity donations by listed companies will bring out tax avoidance effect,and the more donations,the greater the degree of tax avoidance;(2)the charitable donations by private listed companies have a significant positive impact on corporate tax avoidance,while the state-owned is not significant;(3)Influenced by industry characteristics and regional characteristics,charitable donations by listed companies in different industries and regions have different effects on corporate tax avoidance.The tax avoidance effect of charitable donations by listed companies in agriculture,forestry,manufacturing,information software and real estate industry is significant,and the tax avoidance effect of charitable donations by listed companies in the northeast,southern coastal and middle reaches of the Yangtze River is significant.Finally,based on the research conclusions,this paper proposes some policy recommendations such as improving relevant laws and regulations,reducing government administrative interventions and focusing on key listed companies.