Tax Expense Research Articles

Pengaruh Perencanaan Pajak, Beban Pajak Tangguhan, Aset Pajak Tangguhan, Dan Komisaris Independen Terhadap Manajemen Laba

The purpose of this research is to examine the impact of Tax Planning, Deferred Tax Expenses, Deferred Tax Assets, and Independent Commissioners on Profit Management in Energy Sector Companies listed on the Indonesia Stock Exchange (BEI) during the period from 2018 to 2023. This study utilizes secondary data, specifically the annual financial reports of the companies. It employs a quantitative research approach. The total population consists of 87 companies in the energy sector, with purposive sampling as the chosen method. The study uses a sample of 15 companies over a 6-year observation period, resulting in a total of 90 observation objects. The analysis technique applied in this research is panel data regression analysis, utilizing the common effect regression model. Data processing was carried out using Eviews version 13 and Microsoft Office Excel. The findings indicate that tax planning, deferred tax expenses, deferred tax assets, and independent commissioners have a simultaneous effect on earnings management. Specifically, tax planning does not influence earnings management, deferred tax expenses also do not impact earnings management, deferred tax assets do influence earnings management, and independent commissioners have no effect on earnings management.

Does Financial Reporting for Income Tax Expense Affect the Timeliness of Goodwill Impairments?

ABSTRACT We examine if financial reporting for income tax expense affects the timeliness of goodwill impairments. Goodwill impairments are material, but their timing is subject to managers’ discretion. U.S. GAAP requires firms to test all goodwill for impairment, whereas tax laws generally do not permit impairment deductions and allow amortization for only some goodwill. When an impairment includes goodwill that is not tax-amortizable, firms obtain no financial statement tax benefits to offset the impairment’s negative effect on GAAP net income, thereby increasing the effective tax rate (ETR). We predict and find that managers are more likely to delay impairments when the impairment of nontax-amortizable goodwill generates a material ETR increase. We estimate that goodwill impairments are 11 to 14 percent more likely to be delayed when they materially increase ETRs. Our findings suggest financial reporting for taxes potentially distorts the timeliness of goodwill impairments, informing the debate on goodwill accounting. Data Availability: Data are available from public sources cited in the text. JEL Classifications: G34; K34; M41.

PENGARUH BEBAN PAJAK KINI, BEBAN PAJAK TANGGUHAN, TAX TO BOOK RATIO, DAN LEVERAGE TERHADAP KINERJA KEUANGAN (Studi Empiris Pada Perusahaan Sektor Kesehatan yang Terdaftar di Bursa Efek Indonesia 2021-2023)

This research is a quantitative study that aims to determine the effect of current tax burden, deferred tax burden, tax to book ratio, and leverage on financial performance in pharmaceutical health sector companies listed on the Indonesia Stock Exchange (IDX) for the period 2021-2023. In determining the sample of this study using purposive sampling technique, so that 15 samples of companies that meet the criteria are obtained with three years of observation so that the total observations used in this study are 45 reports. This study uses secondary data obtained from the company's financial statements. The data analysis technique uses panel data regression analysis (pooled data) with the help of Eviews 12. The results showed that partially the current tax expense variable has a significant effect on financial performance, the deferred tax expense variable has no significant effect on financial performance, the tax to book ratio variable has a significant effect on financial performance, and the leverage variable has a significant effect on financial performance. From this study also obtained the coefficient of determination (R2) with a value of 0,6528, means that 65.28% of disclosure is explained by the variables between current tax expense, deferred tax expense, tax to book ratio, and leverage. While 34.72% is explained by other variables outside the model.

Gauging the Connection Between Ownership Structure and Tax Avoidance of Listed Innovative Firms in Nigeria

Understanding the importance of technology, innovation and new models in business processes, this study examines the connection between ownership structure and tax avoidance of innovative firms. Specifically, the paper examines the influence of managerial and institutional ownership on the tax avoidance activities of innovative firms in Nigeria. The study argued that Effective Tax Rate (ETR) and book tax difference (BTD) measures are more appropriate to measure tax burdens due to the Nigerian corporate tax system. A sample of 420 firm-year observations of selected firms from 2011–2022 was analyzed using panel-corrected regression (PCSE). The study established that managerial ownership has a significant positive effect on tax avoidance of innovative firms, suggesting that managers decrease the potential of aggressive tax planning because the associated cost of tax avoidance outweighs its tax benefit in the long run. While institutional ownership is found to have a significant negative influence on ETR and BTD, suggesting institutional shareholders encourage firms to engage in aggressive tax planning and therefore reduce the level of tax expenses. The implication of these findings is that firms should institute more effective monitoring by having more institutional investors to minimize tax liability. This helps in minimizing agency costs, thereby reducing tax costs and improving after-tax earnings. Certainly, these findings confirm the theoretical postulate of agency theory and stakeholder theory in relation to ownership and earnings management. Thus, our findings make a unique contribution to the literature by proving that tax avoidance decreases because of the associated cost of debt.

Tax Aspect, Governance Mechanism, and New Bank Discretion: Restructuring & Covid-19 Effect

This study investigates the influence of deferred tax expenses and tax retention on earnings management with banking governance mechanisms as moderating variables. The sample for this study comprises 124 data points from banks listed on the IDX between 2019 and 2022. The effects of credit restructuring and the global SARS-CoV-2 pandemic were examined using a moderated regression analysis with a fixed effect model (FEM). The results reveal that deferred tax expenses have a positive impact on discretionary provision, while tax planning has no effect. Additionally, an independent commissioner mitigates the positive effect of deferred tax expenses on earnings management. The study also finds a significant difference in earnings management practices between the pre-Covid-19 period and pandemic periods. These findings suggest that regulators and banking risk control teams should be cautious about tax aspects that may encourage discretionary behavior such as deferred tax liabilities and tax planning during specific periods. Keywords: Deferred Tax Expense, Tax Retention Rate, Governance Mechanism, Earnings Management, Covid-19.

Women in the Boardroom: A Catalyst for Tax Avoidance?

Tax is pivotal in a country’s economy because it is a nation’s largest source of income, However, taxpayers and the government have contrasting viewpoints regarding taxation. Taxpayers perceive taxation as a financial “burden” whereas the government considers tax as their source of revenue “revenue.” Due to the differing perspectives on taxation, taxpayers, especially firms, tend to resort to tax avoidance strategies to reduce their tax expenses. Therefore, the intent of this empirical study is to examine the effect of board gender diversity on corporate tax avoidance practices in the financial sector from 2021 to 2023 using the panel data regression approach. The results of this research study show that board gender diversity is associated with increased corporate tax avoidance practices. The controlled variables, firm size and leverage, do not significantly affect tax avoidance practices, whereas profitability has a significant positive effect. This result aligns with the critical mass theory in which a small proportion of female directors on the board cannot influence the decision-making process of a firm since they will just be ignored.

The Influence of Corporate Governance and Accounting Conservatism on Tax Aggressiveness in Automotive and Component Sub-Sector Companies

This study aims to obtain empirical evidence regarding the impact of corporate governance, projected through independent commissioners and audit committees, as well as accounting conservatism as independent variables, on tax aggressiveness as the dependent variable in automotive and component subsector companies listed on the Indonesia Stock Exchange (IDX) during the research period from 2018 to 2022. In this study, independent commissioners are measured by the ratio of the number of independent commissioners to the total board of commissioners. The audit committee is measured by the number of current audit committee members in the company. Accounting conservatism is measured by summing operating income with depreciation of fixed assets, then subtracting the net cash flow from operating activities, and dividing by the total assets of the company, with the result then multiplied by -1. Tax aggressiveness is measured by the Effective Tax Rate (ETR), calculated by dividing income tax expense by pre-tax income of the company. The sample size for this study is 11 companies, where the sample data were selected using purposive sampling. The data are analyzed using a multiple linear regression model processed with IBM SPSS Statistics version 23. The results of this study indicate that independent commissioners have a significant negative effect on tax aggressiveness, while the audit committee and accounting conservatism do not have a significant effect on tax aggressiveness.

Tax incentives for investments within the framework of the Corporate Income Tax: Effects and prospects of reform

Subject. The article addresses the tax expenditure of the State in the framework of the corporate income tax, aimed at encouragement of investments. Objectives. The purpose of the study is to assess the impact of stimulating tax expenses for corporate income tax on the volume and structure of investments in fixed capital within the framework of the current legislation and in the context of the ongoing tax reform in the Russian Federation. Methods. The study employed general scientific research methods, methods of economic analysis, correlation and regression analysis. Results. The paper analyzes State tax expenditures for 2016–2023 and the forecast period for 2024–2026 under the current legislation. It assesses the planned changes in the corporate income tax as part of the ongoing tax reform, presents a regression model to reflect the impact of stimulating tax expenditures of the State on corporate income tax for investments in fixed assets. Conclusions. Higher corporate income tax rates (up to 25%) may reduce investment activity of businesses that do not have access to investment tax benefits. There will be increased interest in applying reduced tax rates in both legal and illegal ways. Therefore, the federal investment tax deduction should be provided to a wide category of taxpayers, and the availability of borrowed funds for the implementation of priority investment projects should be ensured.

Socioeconomic Determinants of Fast Food Vending in Nnewi Metropolis, Anambra State, Nigeria

This study on the socioeconomic determinants of fast food vending in Nnewi metropolitan city, Anambra State, Nigeria specifically established the socioeconomic characteristics of fast food vendors, various fast food vending prevalence in the study area, profitability of fast food vending, socioeconomic characteristics of fast food vendors that influences net return and constraints to fast food vendors in the study area. Simple random techniques was used to select 120 vendors for the study. Findings from socioeconomic characteristics shows that majority of the vendors/marketers are within the age limit of 40-49 years. Findings from various fast food marketing prevalence in the study area shows that fried Akara and palp had (29.16%) which stands to be the highest fast food vending in the study area. Finding from estimated monthly profitability of fast food marketing shows that the transaction generated a gross margin of N1,720,909.83.00, net marketing income of N1,515,369.83 and net return on investment of 0.37. The implication of the net return on investment is that the marketers return 37 kobo for every 1 Naira invested in the business. Finding from influence of socioeconomic characteristics on net marketing income of fast food vending shows that out of the nine predictors included in the model, only four were significant namely gender, household, source of finance and marketing experience. Finding from constraints shows that that expensive tax (several collection from government) (M= 3.05) was perceived as the most serious challenge in fast food vending in the study area. Too much collection from government and its agency should be addressed by government and relevant stake holders and government should formulate a programs to train these vendors to align to world class vending were recommended. Keywords: Fast-food, determinants, vending, marketing, profitability.

Debt Covenant, Tax Expense, and Intangible Assets on Transfer Pricing

Debt Covenant, Tax Expense, and Intangible Assets on Transfer Pricing

THE INFLUENCE OF DEFERRED TAX EXPENSE, CAPITAL INTENSITY, LEVERAGE, AND CORPORATE SOCIAL RESPONSIBILITY ON TAX AGGRESSIVENESS

The objective of this research is to determine how tax aggressiveness is affected by factors like as leverage, deferred tax cost, capital intensity, and corporate social responsibility (CSR). The sample group for this study consists of manufacturing businesses that will be trading on the Indonesia Stock Exchange (IDX) between 2019 and 2021. The 78 firms that made up the sample were researched over a period of three years using secondary data derived from financial and annual reports as well as purposeful sampling approaches. Multiple linear regression is the method used for analysis. According to the findings, tax aggressiveness is negatively affected by capital intensity and CSR. Leverage has a positive effect on tax aggressiveness. Then, deferred tax expense has no effect on tax aggressiveness.

Pengaruh Beban Pajak Tangguhan, Green Intellectual Capital, dan Kebijakan Utang terhadap Kinerja Perusahaan

This research aims to reveal the influence of deferred tax expense, green intellectual capital, and debt policy on company performance. This type of research uses associative quantitative research methods. The population in this research are Basic Materials sector companies listed on the Indonesia Stock Exchange in 2021-2023. The sampling technique in this research is based on purposive sampling technique. It is known that as many as 106 companies are listed on the Indonesian Stock Exchange in the Basic Materials sector. With the sample selection criteria, a sample of 24 companies was obtained, so the total number of data observations was 72. This research uses statistical tools, namely eviews software version 12. The analysis technique used is data regression. panel. The research results show that deferred tax expense, green intellectual capital, and debt policy simultaneously have a significant effect on company performance. Meanwhile, partially it shows that the deferred tax expense has no effect on company performance. green intellectual capital influences company performance. Debt policy influences company performance.

The effect of practicing transfer pricing and financial performance: Evidence from multinational corporations in the UAE

This research aimed to determine if the financial performance of multinational firms in the United Arab Emirates (UAE) and the appraisal of transfer pricing are significantly correlated. The firms’ financial statements from 2012 to 2022 were used as the primary source data. The research used the panel least squares regression approach to analyze the data acquired from multinational firms in the UAE to assess the research hypotheses. A correlational research methodology was employed to investigate the hypothesized association between transfer price assessment factors and financial performance. The results showed an insignificant effect for bonus mechanisms, tax expenses, and return on assets as measurements of financial performance, but tunneling incentives have an insignificant relationship with return on assets. As a result, the research suggests that multinational corporations in the UAE enhance tax expenses, tunneling, and bonus mechanisms to achieve a higher rate of return on assets. Additionally, UAE multinational firms should reassess their bonus mechanism for optimal financial performance. The study's limitations and findings offer several investigation opportunities related to transfer pricing practices in the UAE, and future researchers could make a comparative study on transfer pricing in different countries.

Transfer Pricing Decisions: Tax Income, Exchange Rate, Tunneling Incentive and Multinationality

Transfer pricing can be misapplied by the company by transferring taxable income to subsidiaries and companies with special relationships to significantly push down the tax expense. This research aims to determine factors that can affect transfer pricing decisions. Those factors include tax income, exchange rates, tunnelling incentives, and multinationals. The research object of this research is a company from the consumer non-cyclical sector listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. The samples are eight companies selected with purposive sampling technique, resulting in 40 observation data. The analysis technique implemented in this research is panel data regression tested Eviews12. This research reveals that tax income and tunnelling incentives negatively influence transfer pricing decisions. At the same time, the exchange rate and multi-nationality do not affect transfer pricing decisions. Variable tax income, exchange rate, tunnelling incentives, and multinationals have simultaneously affected transfer pricing decisions.

PENGARUH BEBAN PAJAK TANGGUHAN, ASET PAJAK TANGGUHAN DAN PERENCANAAN PAJAK TERHADAP MANAJEMEN LABA PADA INDUSTRI MAKANAN DAN MINUMAN

This study aims to analyze and obtain empirical evidence regarding the influence of deferred tax expenses, deferred tax assets, and tax planning on earnings management in the food and beverage sector companies listed on the Indonesia Stock Exchange for the period 2018 – 2022. This research is a quantitative study with an associative method, and the data used in this study are secondary data. The data analysis method used is panel data regression, processed using Eviews version 12. The population used in this study consists of energy sector companies listed on the Indonesia Stock Exchange for the period 2018 – 2022, totaling 84 companies. The sample selection in this study uses purposive sampling techniques. The obtained sample consists of 16 companies with a research period of 5 years, resulting in a total of 80 data points. The results of this study indicate that, partially, deferred tax assets do not have a significant effect on earnings management, but deferred tax expenses and tax planning have a significant effect on earnings management. Deferred tax expenses, deferred tax assets, and tax planning simultaneously have a significant effect on earnings management.

FINANCIAL RATIOS AFFECTING FIRM VALUE AND CORPORATE GOVERNANCE AS MODERATING VARIABLE

The goal of this research is to gather the empirical data regarding the influence of financial performance, leverage, board of commissioner, sales growth, firm size, liquidity, and dividend policy on firm value. Moreover, corporate governance moderates the impact of financial performance on firm value. The non-financial company used in this research is the consumer cyclicals and non-cyclicals companies with total 43 companies listed on the Indonesia Stock Exchange from 2020 to 2022. The hypothesis testing method used is multiple regression method that resulting financial performance, board of commissioner, sales growth, firm size, and liquidity impact the value of a firm. Strong financial performance will attract investors to invest in company, which will grow stock price. Independent commissioner monitors company’s financial statement that is align with company’s real condition, so it increases investor’s trust as well as firm value. Higher sales growth, the lower firm value due to higher tax expense and production cost. Higher total asset causes lack of efficiency in supervising operational activities and strategies by management. Greater current assets, reflect higher current ratio, have lower return than fixed assets. Therefore, the firm value will decrease. Corporate governance negatively moderates the influence of financial performance on firm value. In decision-making, investors consider high managerial ownership due to opportunistic management’s propensity. Meanwhile, leverage and dividend policy have no impact on firm value.

Earnings Management Trend in Manufacturing Companies Sub-Sector Food and Beverage Listed on the Indonesia Stock Exchange Year 2019-2023

This study aims to analyze the trend of earnings management in manufacturing companies operating in the food and beverage sub-sector listed on the Indonesia Stock Exchange. Earnings management trends encompass methods used by companies to manipulate or manage their financial statements. Factors influencing earnings management include tax planning, income tax expenses, and profitability. The management's goal is to enhance corporate earnings to reflect stable profits, thus accurately portraying the company's financial performance in future periods. The study population consists of 45 companies, with a sample of 9 companies selected using purposive sampling. Data collection utilized secondary data from quarterly financial reports of manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2023. The research employed descriptive analysis to assess earnings management trends as predictors of profit increases. The findings reveal significant fluctuations in earnings management practices among food and beverage manufacturing companies listed on the Indonesia Stock Exchange during the period from 2019 to 2023.

The effect of financial performance, tax avoidance, sales growth, and tax expense on capital structure

The effect of financial performance, tax avoidance, sales growth, and tax expense on capital structure

Managers’ Stock Price Incentives and Earnings Management Using Tax Expense

ABSTRACT This study examines the association between stock price incentives (portfolio delta) and earnings management using tax expense, as well as whether this association varies with opportunities to manage earnings. Prior research suggests stock price incentives provide a positive “reward effect” and a negative “risk effect,” causing managers to trade off these countervailing effects when managing earnings. We posit that greater opportunities to manage earnings alter the risk-reward tradeoff related to portfolio delta, potentially changing the association between stock price incentives and earnings management. We do not find a significant association between stock price incentives and earnings management using tax expense on average. However, the association is positive and significant when tax-related earnings management opportunities are sufficiently high, consistent with opportunities mitigating the risk effect of delta. Collectively, our results suggest that managers respond to stock price incentives differently depending on their opportunity sets. Data Availability: Data are available from the public sources cited in the text.

ANALISIS PENGARUH BEBAN PAJAK TANGGUHAN TERHADAP LABA BERSIH PADA PERUSAHAAN TRANSPORTASI DAN LOGISTIK YANG TERDAFTAR DI BEI PERIODE TAHUN 2022-2023

This research aims to analyze the effect of deferred tax burden on the net profit of transportation and logistics companies listed on the Indonesia Stock Exchange (BEI) in 2022 to 2023. Deferred tax expense is the amount of tax recognized for temporary differences between taxable income and accounting profit. This research used purposive sampling to select 27 companies from a population of 37 transportation and logistics companies listed on the IDX. The data used are annual financial reports audited by independent auditors. Data analysis was carried out using logistic regression using Microsoft Excel 2007 and SPSS 25 software. Research findings show that deferred tax expenses have a significant influence on a company's net profit. This insight is important for investors and business managers to understand how deferred tax expenses impact earnings management.