The Influence of Sustainability Reporting, Transfer Pricing, thin Capitalization and Tunneling Incentive on Tax Avoidance in Multinational Manufacturing Sector Companies

Arifatul Khoir; Isnani Yuli Andini

doi:10.55927/jambak.v4i2.436

Authors

Arifatul Khoir Universitas Wiraraja
Isnani Yuli Andini Universitas Wiraraja

DOI:

https://doi.org/10.55927/jambak.v4i2.436

Keywords:

Tax Avoidance, Thin Capitalization, Transfer Pricing, Tunneling Incentive, Sustainability Reporting

Abstract

Tax avoidance is a legal strategy used by taxpayers to reduce their tax liabilities by exploiting gaps or weaknesses in a country's tax regulations. In Indonesia, this practice is one of the contributing factors to the country's low tax ratio, particularly among multinational corporations. This study aims to examine the influence of sustainability reporting, transfer pricing, thin capitalization, and tunneling incentives on tax avoidance in multinational manufacturing companies listed on the Indonesia Stock Exchange for the 2019–2023 period. Using a quantitative approach and purposive sampling method, 15 companies were selected as samples. The data were obtained from financial statements and sustainability reports and analyzed using EViews 12 software. The results reveal that collectively, all independent variables significantly affect tax avoidance.

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