DETERMINANTS OF CORPORATE TAX AVOIDANCE: EVIDENCE FROM MINING COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE FROM 2021 to 2024
Keywords:
Tax Avoidance, Financial Distress, Transfer Pricing, Corporate Social Responsibility, Firm SizeAbstract
This study explores the relationships between financial distress, transfer pricing, corporate social responsibility (CSR), and firm size in influencing tax avoidance among Indonesian mining companies listed on the Indonesia Stock Exchange 2021–2024. The sample includes 18 firms and 70 firm-year observations after removing outliers. Tax avoidance is measured using the cash effective tax rate (CETR), where a higher CETR indicating less avoidance. Results from multiple linear regression show that financial distress has a significant negative relationship with CETR, indicating that firms experiencing greater financial pressure are more likely to aggressively minimize cash tax payments. Transfer pricing is not significant, suggesting that the proxy may not fully capture cross-jurisdictional profit-shifting channels, especially under tighter documentation and enforcement. In contrast, CSR and firm size are positively and significantly associated with CETR, indicating higher cash-tax compliance consistent with legitimacy and political-cost arguments. Novelty: This study contributes by (i) focusing on the post-pandemic 2021–2024 mining context, (ii) employing CETR to capture cash-based tax compliance, and (iii) providing an enforcement-based explanation for the non-significance of transfer pricing in a unified model.
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