Forms Of Tax Avoidance Research Articles

The Influence of Profitability and Leverage on Tax Avoidance in Manufacturing Companies Listed on the Indonesian Stock Exchange 2018 - 2020

Tax is one of the largest revenues in the APBN, but when compared to the realization of the tax revenue target, it is still not appropriate. In this thesis the author indicates that this happened because there was resistance made by the taxpayer in the form of tax avoidance. This study aims to determine the magnitude of the influence of Profitability, and Leverage on Tax Avoidance in manufacturing companies listed on the Indonesia Stock Exchange in 2018 - 2020. The data used in this thesis is secondary data, namely financial statements obtained from the official website of the Indonesia Stock Exchange ( www.idx.com). Sampling by purposive sampling was obtained as many as 10 companies with a research time of 2018 - 2020. The analysis method used was the regression test method and used SPSS version 24 for data processing. The results of this study indicate that profitability partially has a significant positive effect on tax avoidance, partially leverage has a significant positive effect on tax avoidance. Profitability, and Leverage, simultaneously have an effect on tax avoidance.

Analysis of Citizens' Tax Avoidance Actions Based on Tax Laws in Indonesia

Tax avoidance is an effort to avoid taxes that are carried out legally and safely to taxpayers in accordance with applicable tax regulations. This is because the methods and techniques used are based on exploiting the weaknesses contained in the tax laws and regulations. This type of written research method is qualitative depending on the type of document. Qualitative research is a type of research whose results are not based on statistics or other calculations. Application of high tax rates is also an obstacle because it burdens taxpayers. Other disabilities include: Regulations that apply the law are often inconsistent with the law. There are many formal and informal taxes at the central and regional levels. Weak law enforcement, complicated bureaucracy, and so on, will certainly help achieve good governance in the form of clean and authoritative government, if done properly. Indonesia does not yet have strong enough regulations to regulate tax avoidance. This is because Article 18 of Law Number 36 of 2008 concerning the Fourth Amendment to Law Number 7 of 1983 concerning Income Tax only regulates one taxpayer effort to avoid taxes, namely the only application of the concept of transfer pricing. On the other hand, other forms of tax avoidance are not regulated. Therefore, the state needs to reform its tax system.

Effect of Profitability, and Leverage on Tax Avoidance In Manufacturing Companies Listed On The Stock Exchange In 2018 - 2020

Tax is one of the largest revenues in the APBN, but when compared to the realization with the target of tax revenue, it is still not appropriate. In this thesis, the authors indicate that this occurs because there is resistance by taxpayers in the form of tax avoidance. This study aims to determine the influence of Profitability and Leverage on Tax Avoidance in manufacturing companies listed on the Indonesia Stock Exchange in 2018 – 2020. The data used in this thesis is secondary data, namely financial reports obtained from the official website of the Indonesia Stock Exchange (IDX). www.idx.com). Sampling by purposive sampling obtained a sample of 10 companies with research time during 2018 - 2020. The method of analysis used was the regression test method and used SPSS version 24 for data processing. The results of this study indicate that profitability partially has a significant positive effect on tax avoidance, leverage partially has a significant positive effect on tax avoidance. Profitability and leverage simultaneously have an influence on tax avoidance.

The Effect of Taxes and Bonus Mechanisms in Moderating Profitability on Transfer Pricing

One factor that encourages companies to do transfer pricing is the bonus mechanism. Bonusecanism is used as a moderating, reinforcing, or motivation-weakening variable of tranfer pricing. The purpose of this study is to analyze the causality between tax and transfer pricing in companies related to the manufacturing and non-financial services sectors in Indonesia and to analyze the role of bonus mechanism moderators in strengthening the effect of profitability on transfer pricing in companies related to the manufacturing and non-financial services sectors in Indonesia. This type of research is explanatory research, which explains one variable's causality relationship to another. This study used the analysis of the Granger causality test and hypothesis testing using the coefficient of determination test, F test and t-test. The sample in this study is companies members of the KOMPAS 100 index in 2010-2020, totaling 100 companies. Based on the study's results, it can be concluded that: 1) There is a causality relationship between tax and transfer pricing. The amount of tax has a positive effect on transfer pricing. On the other hand, transfer pricing also positively affects the amount of tax. This suggests a causality link between tax and transfer pricing and as a form of tax avoidance by multinational companies; 2) The role of the bonus mechanism does not moderate the amount of profitability to transfer pricing. The decision of managers to pursue bonuses does not affect the amount of profitability to transfer pricing.

Pengaruh Return On Asset, Sales Growth, Dan Financial Lease Terhadap Tax Avoidance (Studi Pada Perusahaan Manufaktur Sub Sektor Otomotif Yang Terdaftar Di BEI)

As the largest source of state revenue, government always seek to optimize tax revenue. However, on the other hand, taxpayers also trying to do tax planning to minimize their tax obligation. As example, several manufacturing companies applied tax planning schemes in the form of tax avoidance so as not to violate tax laws but able to minimize their tax. This research aims to analyse the factors that affect the tax avoidance including return on asset, sales growth, and financial lease in automotive manufacturing sub-sector listed in Indonesia Stock Exchange in 2010-2016 period. For the research method, this research uses quantitative method approach and the sampling technique used is purposive sampling technique. The sample in this research uses 30 manufacturing companies within 7 years period to obtain as many as 84 data. For data analysis, this research uses panel data regression approach using EViews 9.0 software. The study shows that return on asset, sales growth and financial lease have the influence to do tax avoidance practice of 25.774% and the other 74.226% is influenced by other variable outside this study. The analysis result shows that return on asset, sales growth and financial lease simultaneously influenced manufacturing companies to do tax avoidance. Partially, return on asset affects the manufacturing companies to do tax avoidance, while sales growth and financial lease does not.
 Keywords: Return On Asset, Sales Growth, Financial Lease, Tax Avoidance

Tax noncompliance: The role of tax morale in smokers' behavior

AbstractMeasuring and predicting compliance with tax obligations is an important but challenging task. Survey data from California smokers show that several forms of tax avoidance and evasion were common. The analysis shows that 43% of smokers avoided taxes by purchasing cigarettes from out‐of‐state sources in the past year, 15% admitted to evading taxes through cross‐border purchases, and 26% reported purchasing likely or certainly untaxed cigarettes in the state in the past month. Attitudinal factors related to tax morale explain much more of the variance in compliance rates than demographic or law‐and‐economics factors. The implications for policy are discussed.

PENGARUH PROFITABILITAS DAN LEVERAGE TERHADAP TAX AVOIDANCE TERHADAP PERUSAHAAN PERTANIAN

Tax is the foundation of Indonesia's State Revenue and Expenditure Budget (APBN). The government uses tax revenues as a tool to routinely finance national development. For companies, tax is a burden that will reduce a company's net profit. It is this difference in interests that causes taxpayers to reduce the amount of payments, not even a little from taxpayers who try to avoid the obligation to report and pay their company taxes. This form of tax avoidance by minimizing the legal tax payable is called Tax Avoidance. Tax avoidance is carried out by companies with the aim of diverting funds intended to pay taxes instead allocated to pay company debts. The purpose of this study was to determine the effect of Return On Equity (ROE) and Leverage on Tax Avoidance in agricultural companies. The sampling technique uses purposive sampling with the criteria of agricultural sector companies that do not present complete financial reports for the period 2018 to 2021. The analytical method used is multiple linear regression, hypothesis testing uses the T test to find out the partial regression coefficient and F test to find out the coefficient simultaneous. The results of the study on the T test showed that the Profitability variable proxied by Return On Equity (ROE) had a significant effect on Tax Avoidance. The results of the F test show that the variables Return On Equity and Leverage simultaneously have a positive effect on Tax Avoidance. Leverage proxied by Debt to equity ratio (DER) Has effect on Tax Avoidance.
 

DOES CORPORATE GOVERNANCE INFLUENCE VALUE CREATION : ASSESSING THE MEDIATING ROLE OF CSR AND TAX AVOIDANCE

This study aims to investigate the influence of CG on value creation both directly and as a mediating role in the form of tax avoidance and CSR. The panel data approach was employed, using a sample of 32 multisectoral companies, excluding those in the financial sector, that are listed in the Indonesia Stock Exchange from 2016 to 2019. The data is analyzed using the Smart PLS. In this study, value creation was measured using Tobin’s Q and CG was measured using the Corporate Governance Index (CGI); while the mediating variable, in the form of tax avoidance, was measured using the Henry Sansing formula, and CSR was measured using the GRI-G4 index. The result showed that corporate governance has a direct significant impact on value creation. Furthermore, it is found that CSR tax avoidance could not mediate the relationship between CG and value creation.

Determination Causes of Tax Avoidance on Indonesian Manufacturing Firms with Capital Intensity as Intervening Variables

The aim of this study is to examine and analyze the effect of the independent variables, namely return on assets (ROA), debt to assets ratio (DAR), company size, and capital intensity on the dependent variable in the form of tax avoidance. The population in this study was manufacturing companies listed on the Indonesia Stock Exchange for the period 2016 - 2019. By using purposive sampling technique, data analytical technique used is descriptive statistic, classic assumption test and hypothesis testing in the form of SmartPLS analysis. The test results show that the variables return on assets (ROA), debt to assets ratio (DAR), company size, and capital intensity affect the tax avoidance. Capital intensity can mediate the relation for variable return on assets (ROA), debt to assets ratio (DAR), company size to tax avoidance.

The Artificial Avoidance of Permanent Establishment Status: New Zealand's Response

The aim of this article is to point to a flaw in one of the measures recently enacted by the New Zealand Government to prevent tax avoidance by large multinational enterprises (MNEs). That measure is section GB 54 of the Income Tax Act 2007, which was added to the Act in July 2018 and which is aimed at what is referred to as “the artificial avoidance of permanent establishment status”. The problem with section GB 54 is that it seems to be a nullity, in the sense that it does not catch anything that would not in any event be caught by section BG 1, the general anti-avoidance rule or GAAR. But it is also possible that the courts, in order to salvage section GB 54 from complete redundancy, will read down the scope of the GAAR. Perversely, therefore, the enactment of s GB 54, intended to prevent one particular form of tax avoidance, might make it easier to get away with others.

Determinants of transfer pricing decisions in Indonesia manufacturing companies

T his research aims to investigate tax expenses, tunneling , and bonus on transfer pricing decisions in Indonesia. The practice of transfer pricing as one form of tax avoidance may threaten state revenues. This research is quantitative research with multiple linear regression models with panel data. T he sample s used in this research are manufacturing companies listed on the Indonesia Stock Exchange ( IDX ). The type of data used in this study is secondary data in the form of financial statements of companies listed on IDX from 2011 to 2015. The sample s are selected using a purposive sampling method with the number of samples of 50 companies. The results suggest that tax expenses and tunneling are nega tively associated with transfer pricing decisions while the bonus is not associated with transfer pricing decisions.

BEPS 13: CBCR – raport według krajów

In order to eradicate the unfair competition in the form of tax avoidance and profit shifting, the OECD and the EU advise undertaking effective measures, which have been gathered in a complex of 15 actions that should be introduced by member states to their law orders. Promoting the automatic information exchange and reporting (BEPS 13) has become one of the priorities, as it is considered a tool that guarantees the transparency of actions and the future European and international standards in tax matters. Due to the fact that groups of multinational enterprises have the possibility for applying practices of aggressive tax planning, tax organs of member states need extensive and accurate data that will enable them to react to harmful tax practices by introducing amendments to law or implementing appropriate risk assessments and tax inspections. A greater transparency towards tax organs ought to result in multinational tax organs refraining from the practices they have implemented so far, so that they would start to pay taxes in the country they generate income.

Legislative Efforts at Curbing Tax Avoidance and Tax Evasion in Nigeria: A Legal Infraction

Tax is a potentially powerful instrument for raising government revenue to meet government expenditure in both developed and developing economies, Nigeria is not an exception. However, tax resistance which manifest in form of tax avoidance and evasion constitutes a major impediment to revenue generation in Nigeria. Legislative enactments have therefore been put in place in the country to curb the menance. As palatable as these enactments may appear, this paper has found that they represent a major infraction on the rights of Nigerians. The right to fair hearing, right to own property and right to privacy have been completely eroded in the legislative attempts at curbing the menance of tax resistance. In order to balance the need for the preservation of human rights in Nigeria, on one hand, and the need for efficient revenue generation, on the other, the paper has advocated the enactment of a Tax Payers’ Bill of Rights to address some of the identified abuses. It is further advocated that section 104(2), (3) and (4) of the Personal Income Tax Act and section 44(2)(a) of the Constitution of the Federal Republic of Nigeria which have completely abrogated the rights to own property and fair hearing of Nigerian Tax Payers be repealed in order to give meaning to the rights as granted under the Constitution.

Tax avoidance and cost of debt: The case for loan-specific risk mitigation and public debt financing

Examining the syndicate loans market for publicly traded U.S. firms I show that tax avoidance is positively related to loan spreads. Importantly, however, tax-specific premiums disappear for loans with large number of co-leads, which facilitate credit risk diversification, for loans with performance pricing provisions, which facilitate borrower-lender incentive alignment, and for borrowers with CDS contracts, which facilitate credit risk transfer. Moreover, non-bank institutional investors demand higher risk premiums to compensate for their high-risk investment strategies that also account for tax-specific risks and do not have particular focus on tax-specific risk taking. Finally, I show that simultaneous access to private and public debt financing, which reflects greater firm-level financial flexibility and fewer hold-up problems, largely mitigates agency risks associated with all forms of tax avoidance. These syndicate-level risk-mitigating measures work jointly well and are more effective, ex-ante, at moderating tax-specific risks in comparison to maintenance-based covenant structures alone. These results help identify channels through which firms can mitigate non-tax costs associated with tax avoidance and, hence, effectively pursue strategies that persistently reduce their corporate tax liabilities without incurring material agency costs.

ANALISIS PENERAPAN CONTROLLED FOREIGN COMPANY RULES DALAM MENGATASI BASE EROSION AND PROFIT SHIFTING DI INDONESIA

One cause for the inability to achieve the expected tax revenue target for some last years was the practice of tax avoidance. One form of tax avoidance is the utilization of Controlled Foreign Company (CFC) to defer the recognition of income from overseas over WPDN capital to be taxed in the country. This practice is also faced by many other countries in the world. The issue of the Base Erosion and Profit Shifting (BEPS) has been of concern to developed and developing countries. G20 countries cooperate with OECD to form a BEPS Project to formulate measures to address these BEPS. Indonesia as one of the Associate Members of the Project BEPS has a position that is parallel to the other OECD countries and participates in implementing the BEPS results. BEPS Project has resulted in BEPS Action Plans which one of them is Action 3: Strengthening CFC Rules. Action 3 will provide recommendations to the domestic law related to the design of CFC Rules. Until now, related to Action 3, BEPS Project has issued a Public Discussion Draft Action 3: Strengthening CFC Rules. This draft is divided into seven "building blocks" required for CFC Rules to be effective. The aim of this study is to analyze the effectiveness of CFC Rules in Indonesia, whether it is sufficient to prevent BEPS. After that, we can determine what steps should be taken by Indonesian tax authorities to strengthen the CFC Rules in Indonesia based on seven dimensions of building blocks. The conclusions of this study are (1) CFC Rules in Indonesia as a whole have not been able to overcome BEPS; and (2) When compared with the recommendations of the Discussion Draft Action Plan 3, CFC Rules Indonesia needs to be improved. However, the necessary improvements should be adjusted to match the needs and characteristics of Indonesia.

The Role of Transfer Prices in Profit-Shifting by U.S. Multinational Firms: Evidence from the 2004 Homeland Investment Act

Using unique transaction-level microdata, this paper documents profit-shifting behavior by U.S. multinational firms via the strategic transfer pricing of intra-firm trade. A simple model reveals how differences in tax rates, both the corporate tax rates across countries and the dividend repatriation tax rate over time, affect the worldwide profit-maximizing transfer-prices set by firms for intra-firm exports and imports. I test the predictions of the model in the context of the 2004 Homeland Investment Act (HIA), a one-time tax repatriation holiday which generated a discreet change in the incentives for U.S. firms to shift profits to low-tax jurisdictions. Matching individual trade transactions by firm, product, country, mode-of-transport, and month across arms-length and related-party transactions (following Bernard, Jensen, and Schott (2006) ) yields a measure of the transfer-price wedge at a point in time. A difference-in-difference strategy reveals that this wedge responds as predicted by the model: In the period following passage of the HIA, the export transfer price wedge increased in low-tax relative to high-tax countries, while the import transfer price wedge exhibited the opposite behavior. Consistent with the form of tax avoidance known as "round-tripping, the results imply $6 billion USD of under-reported U.S. exports, nearly $7 billion USD of over-reported U.S. imports, and roughly $2 billion USD in foregone U.S. corporate tax receipts.

Cost of Tax Avoidance: Examining the Role of Product Market Structure

Examining product market structure, we show that market leaders engage in greater levels of all forms of tax planning and generate more sustainable tax positions. Importantly, examining cost of equity capital we document asymmetrical benefits to tax avoidance for market leaders in that while they participate in benefits to tax optimization, unlike the case for non-leader firms, they are shielded from additional risk premiums required for more aggressive levels and forms of tax avoidance. Realized tax risk, however, has economically meaningful effect on investors’ perception of overall firm risk regardless of market power. Moreover, we confirm the findings in Cook et al. (2015) that at low/(high) levels of tax avoidance investors outweigh benefits/(incremental risks) of tax optimization/(avoidance). Overall, our analysis validate arguments that there exists negligible ex-ante costs to tax avoidance particularly for firms with significant market power. These results are robust to linear vs non-linear modelling assumptions, returns-based models, post-FAS109 period estimates and to measures of income mobility, financial constraints and corporate governance.

The unpopularity of the hearth tax and the social geography of London in 1666

This article presents a new evaluation of the Restoration hearth tax and the social geography of London, first, by comparing the 1666 London hearth tax return with unpublished collectors’ accounts; second, by analysing the huge amount of extraneous data in these records on the social conditions in London; and third, by considering how different forms of tax avoidance and tax evasion operated on the streets of London. The article discusses wealth distribution by location and social status, and shows how privileged groups used diplomatic, ecclesiastical, and military rank to avoid the hearth tax, while ordinary householders turned to doorstep opposition, especially in the outer and poorer suburbs, in expressing their hostility towards the heath tax. The article demonstrates that in Metropolitan London the assessment and collection of the hearth tax depended not only upon the enforcement of the parliamentary legislation, but also upon negotiation and give‐and‐take between tax collectors and tax payers, sometimes in consultation with the Crown. As a result the hearth tax failed to fill the king's purse, was unpopular in the capital and in the country, and created onerous work for both auditors and hearth tax collectors, which contributed to the short life of the hearth tax (1662–89).

Tax Avoidance and Cost of Debt: The Case for Syndicate Risk Mitigation and Public Bond Markets

Examining the syndicate loans market for publicly traded U.S. firms I show that tax avoidance is positively related to loan spreads. This positive link holds for alternative forms of tax avoidance and is more pronounced for firms with financial constraints and information asymmetries. Moreover, I show that the positive link between tax avoidance and loan spreads is largely eliminated for loans with effective risk mitigating mechanisms in place where lenders either align borrowers’ interests with theirs and/or are able to diversify away loan-specific risks. Notably, these risk mitigating mechanisms are more effective at moderating tax-specific risk premiums for firms with larger financial constraints and information asymmetries. Furthermore, performance pricing provisions, functioning as hybrid screening/monitoring mechanisms, are more effective, ex-ante, at moderating tax-specific risks in comparison to covenant-based monitoring structures alone. Finally, I find that simultaneous access to bank and public debt financing, which reflects greater firm-level financial flexibility and information quality, mitigates agency risks associated with all forms of tax avoidance. These results help identify channels through which firms can mitigate non-tax costs associated with tax avoidance and hence, effectively pursue strategies that persistently reduce their corporate tax burden.

Treasury's Unfinished Work on Corporate Expatriations

Continued tax-motivated inversions of U.S. corporations into foreign corporations highlight the systemic tax advantages that a foreign-owned U.S. corporation has over a U.S.-owned corporation in avoiding U.S. corporate tax on U.S. business income. In the absence of congressional action, this article emphasizes the need for the Treasury to further reduce U.S. tax incentives for inversions and other foreign acquisitions of U.S. corporations. The two most important of the tax incentives are earnings stripping and the ability to use, directly or indirectly, a U.S. group’s unrepatriated foreign earnings for the benefit of shareholders of the foreign parent corporation without incurring current U.S. income tax. These tax advantages will not be meaningfully reduced by any plausible lowering of the top U.S. corporate tax rate. Moreover, earnings stripping would be exacerbated by adoption of a territorial system. Treasury should use the administrative authority Congress delegated to it under Code sections 385 and 956 to restrict these foreign parent tax advantages and counter renewed market pressure on U.S. groups to engage in this form of tax avoidance. Treasury should employ existing anti-abuse regulations to address use of unrepatriated CFC earnings to benefit foreign parent groups.