JEFMS Journal

Google Scholar

Article Pdf

---

ABSTRACT:

This study aims to provide empirical evidence on the influence of thin capitalization, transfer pricing, and audit quality on tax avoidance. The dependent variable in this study is tax avoidance using Effective Tax Rate (ETR) proxies and dummy tax haven categories. Meanwhile, the independent variables in this study are thin capitalization with MAD ratio proxies and transfer pricing measured using related party receivables proxies. Furthermore, this study also uses a moderation variable, namely audit quality. Audit quality is measured using Big Four KAP proxies and dummy auditors industry specialization. This research uses a sample of 250 manufacturing company listed on the Indonesia Stock Exchange in 2018-2022. The results of this study show that transfer pricing affects tax avoidance, and audit quality can mitigate the influence of thin capitalization and transfer pricing affects tax avoidance.

KEYWORDS:

Tax Avoidance, Thin Capitalization, Transfer Pricing, Audit Quality, and Auditor Industry Specialization.

REFERENCES:

1) Anggraeni, T., dan Oktaviani, R.M. 2021. Dampak Thin Capitalization, Profitabilitas, dan Ukuran Perusahaan Terhadap Tindakan Penghindaran Pajak. Jurnal Akuntansi dan Pajak. Vol 21 (2) : 390-397.

2) Buettner, T., M. Overesch, dan G. Wamser. 2018. “Anti-profit-shifting Rules and Foreign Direct Investment”.International Tax Public Finance 25: 553 – 580.

3) Calocha, R., dan Herwiyanti, E. 2020. Factors that affect audit quality. Journal of Contemorary Accounting. Vol 2 (1) 35- 48.

4) Cooper, D. R. dan P. S. Schindler. 2014. Business Research Methods. Twelfth Edition. New York, The U.S.A: McGraw-Hill.

5) Davies, R. B., J. Martin, M. Parenti, dan F. Toubal. 2018. “Knocking on Tax Haven’s Door: Multinational Firms and Transfer Pricing.” The Review of Economics and Statistics 100 (1): 120–134.

6) Donohoe, M. P., dan W. R. Knechel. 2014. “Does Corporate Tax Aggressiveness Influence Audit Pricing?” Contemporary Accounting Research 31 (1): 284–308.

7) Dreze, J. dan N. Stren. 1987. “The Theory of Cost-Benefit Analysis.” Handbook of Public Economics 2: 909–989.

8) Fablo, T., D., dan Firmansyah, A. 2021. Penghindaran Pajak di Indonesia: Multinationality dan Manajemen Laba. Bsinis- Net Jurnal Ekonomi dan Bisnis. Vol 4 (1); 94 – 110. https://doi.org/10/46576/bn.v4il.1325

9) Gaaya, S., N. Lakhal, dan F. Lakhal. 2017. “Does Family Ownership Reduce Corporate Tax Avoidance? The Moderating Effect of Audit Quality.” Managerial Auditing Journal 32 (7): 731–744.

10) Grubert, H., 2003. “Intangible Income, Intercompany Transactions, Income Shifting, and the Choice of Location.”

11) National Tax Journal 56 (1): 221–242.

12) Heidy, M., dan Ngadiman. 2021. Pengaruh Ukuran Perusahaan, Multinasional, dan Thin Capitalization terhadap Tax Avoidance dalam Perusahaan Manufaktur yang terdaftar dalam BEI pada 2015 – 2019. Jurnal Multiparadigma Akuntansi. Vol 3 No 2 : 578-587.

13) Hidayah, Nurul. 2015. Pengaruh Perusahaan Keluarga, Multinational Company, dan Kepemilikan Institusional Terhadap Tax Avoidance (Studi pada Perusahaan Manufaktur yang terdaftar di Bursa Efek Indonesia periode 2010-2012). Jom FEKON, 2(2).

14) Richardson, G., Taylor, G., dan Lanis, R. 2013. Determinants of Transfer Pricing Aggressiveness : Empirical evidence from Australian firms. Journal of Comtemporary Accounting & Economic. Vol 9 : 136 – 150.

15) Richardson, G., Taylor, G., dan Lanis, R. 2013. The impact of board of director oversight characteristics on corporate tax aggressiveness : An empirical analysis. Journal Accounting Public Policy 32 (2013) 68-88.

16) Richardson, G., Taylor, G. 2014. Income Shifting Incentives and Tax Haven Utilization : Evidence from Multinational U.S Firms. The International Journal of Accounting.

17) Taylor, G., dan Richardson, G. 2012. International Corporate Tax Avoidance Practices : Evidence from Australian Firms. The International Journal of Accounting 47 (2012) 469-496.

18) Taylor, G., dan Richardson, G. 2013. The Determinants of Thinly Capitalizad Tax Avoidance Structures : Evidence from Australian firms. Journal of International Accounting, Auditing, and Taxation. Vol 22 : 12-25.

19) Taylor, G., Richardson, G., dan Taplin, R. 2014. Determinants of Tax Haven Utilization: evidence from Australian firms. Journal accounting dan Finance. Doi : 10.1111/acfi.12064.