The enhancements of tax policies and their coordination have emerged as a significant way to promote corporate sustainability, especially in developing economies worldwide. Using panel data from Chinese non-financial A-share listed companies from 2009 to 2022, this study empirically explores the promoting effects of corporate income tax (CIT) incentives and environmental protection tax (EPT) levies on corporate ESG performance. We find that the CIT incentive has a notable positive impact on firms’ ESG behavior, acting on the micro-mechanisms of increasing corporate cash flow and reducing agency costs, and its promoting effect is more salient with regard to the social and governance dimensions. This study also traces the interactive effects between the EPT levy and CIT incentive policies, which boost corporate ESG behavior synergistically. Heterogeneity analyses reveal that these effects are more noticeable in manufacturing firms and non-state-owned firms with severe financing constraints. Environmental tests show that CIT incentive policies have positive effects on green technological innovation, and Chinese enterprises are still experiencing relatively serious negative impacts. The conclusions of this study are conducive to providing theoretical support and policy suggestions for encouraging the sustainable development of companies through the policy combination of environmental regulation and tax incentives.