The Influence of Thin Capitalization, Capital Intensity, and Earnings Management on Tax Avoidance with Tax Havens Country as Moderator

Suryana Amni, Dr. Ruhul Fitrios and Dr. Alfiati Silfi
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Suryana Amni: Master of Accounting Study Program, Faculty of Economics and Business, University of Riau, Pekanbaru, Indonesia.
Dr. Ruhul Fitrios: SE., M.Si., Ak, CA, University of Riau, Pekanbaru, Indonesia.
Dr. Alfiati Silfi: SE., M.Si., Ak, CA, University of Riau, Pekanbaru, Indonesia.

International Journal of Science and Business, 2023, vol. 20, issue 1, 109-122

Abstract: Tax avoidance is an act or effort taken by the taxpayer to reduce the amount of tax payable in a legal way, namely by utilizing the gray area contained in the applicable tax laws and regulations. In theory, tax avoidance is allowed only that includes acceptable tax avoidance. But the fact is, a lot of tax avoidance that occurs is unacceptable tax avoidance which can be detrimental to the state. The purpose of this research was to examine the influence of thin capitalization, capital intensity, and earnings management on tax avoidance with tax havens country as moderators. The population of this research is multinational companies that were listed on the Indonesia Stock Exchange (IDX) in 2017-2021. The sampling technique used was the purposive sampling of 29 companies with a total sample of 145 samples selected based on predetermined criteria. The data analysis technique in this study used multiple linear regression analysis with SPSS Statistics V22.0. The results showed that thin capitalization influenced tax avoidance, capital intensity influenced tax avoidance, and earnings management influenced tax avoidance. Other results show that tax havens country moderates the influence of thin capitalization and earnings management on tax avoidance, but tax havens country does not moderate the influence of capital intensity on tax avoidance.

Keywords: Thin Capitalization; Capital Intensity; Earnings Management; Tax Havens Country; Tax Avoidance. (search for similar items in EconPapers)
Date: 2023
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