This study investigates the main concern of corporate foundation is either tax avoidance or CSR, or both considerations. Carroll (1979) divided corporate social responsibility into four categories: economics, legal, ethical and discretionary responsibility (such as philanthropy and community leadership). However, some research found that corporate philanthropy may be more a tool of legitimization than a measure of corporate social responsibility. Besides, the general public doubts that companies establish foundations for tax benefit. What is the motivation of the company to establish the foundations? Tax benefit or corporate social responsibility or both? Our empirical results show that companies with corporate foundations have less book tax difference and better CSR performance than those without corporate foundations. Therefore, corporates establish foundations mainly for social responsibility not for tax avoidance.