CORPORATE TAX PLANNING AND FINANCIAL STABILITY: THE CONTINGENT GOVERNANCE ROLE OF ESG

Chutimant BOONNUAL; Sarapee CHANATUP

doi:10.14456/aamr.2026.22

Authors

Chutimant BOONNUAL King Mongkut’s Institute of Technology, Ladkrabang, Prince of Chumphon Campus, Thailand
Sarapee CHANATUP Suratthani Rajabhat University, Thailand

DOI:

https://doi.org/10.14456/aamr.2026.22

Keywords:

Corporate Tax Planning, Financial Stability, ESG Performance, Book-Tax Differences, Contingent Governance

Abstract

This study empirically investigates the relationship between corporate tax planning and financial stability, highlighting the moderating role of Environmental, Social, and Governance (ESG) performance. Analyzing a sample of 261 non-financial firms listed on the Stock Exchange of Thailand, the research utilizes effective tax rates (ETR) and book-tax differences (BTD) to measure tax planning. Financial stability is operationalized via the Altman Z-score and Ohlson O-score. Findings reveal that BTD is significantly and positively associated with financial stability, whereas ETR exhibits no significant relationship. Crucially, moderation analysis demonstrates that strong ESG performance amplifies the positive impact of BTD on financial stability. The results suggest that BTD effectively captures complex tax-planning dimensions linked to corporate resilience. At the same time, ESG performance functions primarily as a contingent governance mechanism that enhances the credibility of these strategies. Ultimately, this research provides vital insights, indicating that the financial implications of tax planning depend substantially on a firm's broader transparency and governance environment.

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