The determinant of transfer pricing in Indonesian multinational companies: Moderation effect of tax expenses

Author:

Pramono Sari Maylia1ORCID,Budiarto Alfan2,Raharja Surya3ORCID,Sri Utaminingsih Nanik4ORCID,A. Budiantoro Risanda5ORCID

Affiliation:

1. Lecturer, Faculty of Economics, Accounting Department, Semarang State University

2. Bachelor, Faculty of Economics, Accounting Department, Semarang State University

3. Ph.D., Lecturer, Faculty of Economics and Business, Accounting Department, Diponegoro University

4. Doctor, Lecturer, Faculty of Economics, Accounting Department, Semarang State University

5. Master, Lecturer, Faculty of Economics, Accounting Department, Semarang State University

Abstract

In calculating the transfer price of a transaction for goods, services, intangible assets, or financial transactions, a corporation has a policy known as transfer pricing. Due to its widespread abuse, transfer pricing is frequently associated with negative connotations. For example, this practice manipulates prices so that it has the potential to harm state revenues. This study uses tax expenses as a moderating variable to evaluate how intangible assets, debt covenants, and bonus systems affect the company’s decisions to use transfer pricing. This paper uses quantitative research approach with multiple linear regression analysis. The data used are panel data, consisting of cross-section data from 23 international manufacturing businesses on the Indonesian Stock Exchange, and time-series data from 2017 to 2019. Based on the tests, only the debt covenant variable significantly positively affects the transfer pricing action (sig. 0.000). In contrast, the intangible asset and the bonus mechanism variables are insignificant for transfer pricing. Furthermore, tax charges cannot mitigate the impact of intangible assets on transfer pricing decisions. However, tax charges may be able to mitigate the debt covenant in a way that makes the company’s decision to use transfer pricing stronger (sig. 0.024). Additionally, the bonus mechanism may be negatively moderated by tax expenses, weakening the company’s decisions to use transfer pricing (sig. 0.045).

Publisher

LLC CPC Business Perspectives

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics,Finance

Reference24 articles.

1. Anh, N. H., Hieu, N. T., & Nga, D. T. (2018). Determinants Of Transfer Pricing Aggressiveness: A Case of Vietnam. Southeast Asia Journal of Contemporary Business, Economics, And Law, 16(5), 104-112. - https://seajbel.com/wp-content/uploads/2018/10/seajbel5_237.pdf

2. Anisyah, F. (2018). Pengaruh Beban Pajak, Intangible Assets, Profitabilitas, Tunneling Incentive Dan Mekanisme Bonus Terhadap Transfer Pricing (Studi Empiris Pada Perusahaan Manufaktur Yang Listing di BEI Periode 2014–2016). Universitas Riau. (In Indonesian). - https://digilib.unri.ac.id/index.php?p=show_detail&id=71454&keywords=

3. Dudar, O., Spengel, C., & Voget, J. (2015). The Impact of Taxes on Bilateral Royalty Flows (Discussion Paper No. 15-052). ZEW – Centre for European Economic Research. - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2641756

4. Fadhilah, M. A. (2018). Pengaruh Pajak Dan Intangible Assets Terhadap Motivasi Perusahaan Melakukan Transfer (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Pada Bursa Efek Indonesia Periode 2011-2016). Universitas Islam Indonesia. (In Indonesian).

5. Financial Derivatives, Financial Leverage, Intangible Assets, and Transfer Pricing Aggressiveness: Evidence from Indonesian Companies

Cited by 3 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3