Charity and tax planning in socially responsible entrepreneurships in the Czech Republic

Abstract

Today, more and more companies in the Czech Republic are committed to the concept of sustainable business or corporate social responsibility (CSR). Charity donations belong among the most common areas in which companies invest in terms of socially responsible behaviour. However, some critics point out that responsible companies should primarily behave in a way that does not endanger their core business. Regardless, CSR has become a global theme, both academically and in practice, and a broad concept that addresses economic, environmental, and social dimensions of entrepreneurship. The environmental and social issues were dominant in the concept of sustainable business and CSR practices but recently, a lot of the discussion has targeted the companies' responsibility to pay taxes. Indeed, taxation is not a new dimension and, instead, should be seen as part of economic responsibility, as paying taxes into public finances is inherently part of how businesses contribute to society. Thus, socially responsible companies will play an important role in the development of communities and as leaders of social innovations. To achieve its economic objectives, entrepreneurship, to be responsible, must always obey the law. That does not mean that socially responsible companies need to pay more in taxes than required by the law. CSR activities should not create obstacles to the normal and appropriate tax planning. Yet, CSR can be perceived as to set some limits to and requirements for the tax planning activities, such as aggressive tax planning; these are steps taken by taxpayers which are in line with the tax requirements, but do not correspond with reasonable expectations of the stakeholders. The first section of the article contains scientific work, with the introductory part focused on a survey of the current state of the issue and the level of knowledge. The following part of the research will use secondary data available, namely from the Ministry of Finance of the Czech Republic, concerning charitable donations and their effect on the overall tax base and income tax to prove or disprove whether Czech companies use charitable donations as a mean of aggressive tax planning. In conclusion, the findings will be formulated and presented. © 2020 Academic Conferences and Publishing International Limited. All rights reserved.