The CEO’s foreign experience and the CEO’s share ownership: Does tax aggressiveness matter?

Abstract

This study investigates the association between the CEO’s foreign experience and the CEO’s share ownership with tax aggressiveness. The research data is sourced from financial reports and annual reports of non-financial sector companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2019, obtained from www.idx.co.id. Based on purposive sampling, the total sample in this study amounted to 88 observations. Hypotheses testing in this study employed multiple regression analysis for cross-section data. This study concludes that the CEO’s foreign experience is negatively associated with tax aggressiveness, and CEO’s ownership is not associated with tax aggressiveness. Returnee CEO can adequately analyze the costs and benefits related to tax aggressiveness, and it is found that if they carry out tax aggressiveness in Indonesia, the costs incurred will be greater than the benefits received. Meanwhile, the CEO’s ownership in Indonesia is still low, so it cannot affect the tax aggressiveness level. This research indicates that the Indonesia Tax Authority need to pay attention to the CEO’s experience when conducting audits and need to cooperate with the Indonesia Financial Services Authority (OJK) to measure how the company behaves in running its business, whether the returnee CEO carry out all business ethics only or adequately those related to tax aggressiveness.