Determinants of transfer pricing decision at manufacturing companies of Indonesia

Supriyati Supriyati; Dewi  Murdiawti; Kadek  Pranetha Prananjaya

doi:10.20525/ijrbs.v10i3.1118

Authors

Supriyati Supriyati STIE PERBANAS UNIVERSITY https://orcid.org/0000-0002-2609-8566
Dewi Murdiawti
Kadek Pranetha Prananjaya

DOI:

https://doi.org/10.20525/ijrbs.v10i3.1118

Keywords:

Tax Avoidance, Bonus Mechanism, Debt Covenant, Tunneling Incentive, Audit Quality, Transfer Pricing

Abstract

This paper examines the effect of tax avoidance, bonus mechanism, debt covenant, tunneling incentive, audit quality, multinationality, foreign ownership, and company size on transfer pricing. This research population is all manufacturing companies that list at Indonesia Stock Exchange on the period of 2016-2018 but the collected data are on a period of 2015-2019. The sampling technique uses a purposive method to obtain 275 samples in the observation period of 2016-2018. The method of this research involves descriptive statistic test, classical assumption test, and hypothesis test. A regression test is used for testing the hypotheses. The result of the research shows that tax avoidance, debt covenant, and company size have a significant effect on transfer pricing decision. The factors are multinationality, foreign ownership and audit quality also have a significant effect on transfer pricing decisions. Meanwhile, bonus mechanism and tunneling incentives do not significantly affect transfer pricing decisions. Conclusions from this research is a lot of factors involved in the transfer pricing decision. One from inside the company and the others from an outside company. Transfer pricing is a tool to achieve certain goals. The purpose of transfer pricing can be categorized as internal goals and external goals. The manufacturing companies when deciding about transfer pricing must be careful because there are two perceptive about transfer pricing. One perceptive from a business that transfer pricing is something useful because a company can save money related tax but the other perceptive from the government side, transfer pricing has believed to be able to have reduced or even disappearing potential for a country’s tax revenue.

Downloads

Download data is not yet available.

References

Anggraini, R. D. 2011. Pengaruh Kepemilikan Institusional dan Kepemilikan Asing Terhadap Pengungkapan Pertanggungjawaban Sosial Perusahaan Dalam Annual Report (Studi Empiris Pada Perusahaan Non Keuangan Yang Tercatat di BEITahun 2008-2009). Universitas Diponegoro Semarang

Annisa, Nuralifmida Ayu Dan Lulus Kurniasih. 2012.Pengaruh Corporate Governance Terhadap Tax Avoidance. Jurnal Akuntansi Dan Auditing, Vol. 8, No. 2, Mei 2012, Hal 95-189. https://doi.org/10.14710/jaa.8.2.123-136.

Cahyadi, A. S., & Noviari, N. (2018). Pengaruh Pajak , Exchange Rate , Profitabilitas, Dan Leverage Pada Keputusan Melakukan Transfer Pricing di Fakultas Ekonomi dan Bisnis, Universitas Udayana (Unud ), Bali. Jurnal Akuntansi, 24, 1441–1473.

Chen, S., Huang, Y., Li, N., & Shevlin, T. (2018). How does quasi-indexer ownership affect corporate tax planning?? Journal of Accounting and Economics, 67(2), 278–296. https://doi.org/10.1016/j.jacceco.2018.01.001

Claessens, S., Djankov, S. D., Fan, J. P. H., & Lang, L. H. P. (2005). On Expropriation of Minority Shareholders: Evidence from East Asia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.202390

Cristea, A. (2016). Pengaruh Pajak, Kepemilikan Asing, Mekanisme Bonus Dan Debt Covenant Pada Keputusan Perusahaan Untuk Melakukan Transfer Pricing Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia (BEI). Revista Brasileira de Ergonomia, 9(2), 10. https://doi.org/10.5151/cidi2017-060

Damayanti, F., & Susanto, T. (2016). Pengaruh Komite Audit, Kualitas Audit, Kepemilikan Institusional, Risiko Perusahaan Dan Return on Assets Terhadap Tax Avoidance. Esensi, 5(2), 187–206. https://doi.org/10.15408/ess.v5i2.2341

De Angelo, L. E. (1981). Auditor Size And Audit Fees. Journal Of Accounting And Economics, 3(May), 183–199.c

Drake, K. D., Lusch., S. J., & & Stekelberg, J. (2019). Does Tax Risk Affect Investor Valuation of Tax Avoidance?? Journal of Accounting, Auditing and Finance, 34(1), 151–176. https://doi.org/10.1177/0148558X17692674

Faizi, M. F. (2018). Pengaruh Tarif Pajak, Insentif Tunneling, Mekanisme Bonus, Dan Kepemilikan Asing Terhadap Harga Transfer Perusahaan Yang Terdaftar Di BEI (Bursa Efek Indonesia) Periode 2014-2016. Jurnal of Management, 1(1), 224–234.

Halim Rachmat, R. A. (2019). Pajak, Mekanisme Bonus dan Transfer Pricing. Jurnal Pendidikan Akuntansi & Keuangan, 7(1), 21. https://doi.org/10.17509/jpak.v7i1.15801

Harimurti, F. (2007). Aspek Perpajakan Dalam Praktik Transfer Pricing. Jurnal Ekonomi dan Kewirausahaan, 7(1), 53–61.

Hartati, Desmiyawati, J. (2015). (2015). Tax Minimization, Tunneling Incentive dan Mekanisme Bonus terhadap Keputusan Transfer Pricing Seluruh Perusahaan yang Listing di Bursa Efek Indonesia. Jurnal SNA, 241–246.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.2139/ssrn.94043

Kiswanto, Nancy.,&Purwaningsih, A. (2014). Pengaruh Pajak, Kepemilikan Asing dan Ukuran Perusahaan terhadap Transfer Pricing Pada Perusahaan Manufaktur di Bursa Efek Indonesia. Jurnal Universitas Atma Jaya, Yogyakarta.

Kristianto, Z., Andini, R., & Santoso, E. B. (2017). Pengaruh Perencanaan Pajak Dan Tax Avoidance Terhadap Nilai Perusahaan Dengan Kinerja Keuangan Sebagai Variabel Intervening (Studi Empiris Pada Perusahaan Manufaktur Sektor Properti dan Real Estate Yang Terdaftar di BEI Periode 2012-2016). Fakultas Ekonomika Dan Bisnis, Universitas Pandanaran Semarang, 1–20.

Lanis, R., & Richardson, G. (2013). Corporate social responsibility and tax aggressiveness: A test of legitimacy theory. Accounting, Auditing and Accountability Journal, 26(1), 75–100. https://doi.org/10.1108/09513571311285621

Lasdi, L. (2008). Determinan Konservatisma Akuntansi. In The 2nd National Conference UKWMS. Jurnal Akuntansi Kontemporer, Vol. I No. I Hal. 1-20. https://doi.org/10.33508/jako.v1i1.376.

Melmusi, Z. (2016). Pengaruh Pajak, Mekanisme Bonus, Kepemilikan Asing, dan Ukuran Perusahaan Terhadap Transfer Pricing Pada Perusahaan yang tergabung dalam Jakarta Islamic Index dan terdaftar di Bursa Efek Indonesia Periode 2012-2016. Jurnal EKOBISTEK Fakultas Ekonomi, VOL 5(No 2), hal. 1-12.

Ming, J. J., & Wong, T. J. (2005). Earnings Management and Tunneling through Related Party Transactions: Evidence from Chinese Corporate Groups. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.424888

Mispiyanti. (2015). Pengaruh Pajak, Tunneling Incentive dan Mekanisme Bonus terhadap Keputusan Transfer Pricing. Jurnal Akuntansi & Investasi, 16(1), hal. 62-73.

Noviastika F, D., Mayowan, Y., & Karjo, S. (2016). Pengaruh Pajak, Tunneling Incentive dan Good Corporate Covernance (GCG) terhadap Indikasi melakukan Transfer Pricing pada perusahaan manufaktur Terdaftar BEI. Jurnal Perpajakan (JEJAK)|, 8(1), 1–9.

Omar, N., & Zolkaflil, S. (2015). Profit Shifting and Earnings Management through Tax Haven Subsidiaries?: an Exploratory Analysis of Multinational Companies. Procedia Economics and Finance, 28(April), 53–58. https://doi.org/10.1016/S2212-5671(15)01081-3

Pambudi, J. E. (2017). Pengaruh Kepemilikan Manajerial Dan Debt Covenant Terhadap Konservatisme Akuntansi. Competitive Jurnal Akuntansi Dan Keuangan, 1(1), 87. https://doi.org/10.31000/competitive.v1i1.109

Pendse, S. J. (2012). International transfer pricing?: A review of non-tax outlook, 37, 337–343. https://doi.org/10.1016/j.sbspro.2012.03.299

Pil, J., Furusawa, T., & Ishikawa, J. (2020). Transfer pricing regulation and tax competition ?. Journal of International Economics, 127, 103367. https://doi.org/10.1016/j.jinteco.2020.103367

Purwanti, L. (2010). Kecakapan Managerial, Skema Bonus, Manajemen Laba, dan Kinerja Perusahaan. Jurnal Aplikasi Manajemen.

Puspopranoto, Sawaldjo. (2006). Manajemen bisnis : konsep, teori dan aplikasi . Jakarta: Penerbit PPM.

Refgia, T., Ratnawati, V., & Rusli, R. (2016). Pengaruh Pajak, Mekanisme Bonus, Ukuran Perusahaan, Kepemilikan Asing, Dan Tunneling Incentive Terhadap Transfer Pricing (Perusahaan Sektor Industri Dasar Dan Kimia Yang Listing Di BEI Tahun 2011-2014). Jurnal Ekonomi, 4(1), 543–555.

Richardson, G., Taylor, G., & Lanis, R. (2013). The impact of board of director oversight characteristics on corporate tax aggressiveness?: An empirical analysis. Journal of Accounting and Public Policy, 32(3), 68–88. https://doi.org/10.1016/j.jaccpubpol.2013.02.004

Samsul, M. (2006). Pasar modal dan manajemen portofolio. Jakarta: Erlangga., 2(1), 20–39. https://doi.org/10.22236/agregat

Sartori, N. (2011). Effects of Strategic Tax Behaviors on Corporate Governance. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1358930

Schandlbauer, A. (2017). How do financial institutions react to a tax increase? Journal of Financial Intermediation, 30, 86–106. https://doi.org/10.1016/j.jfi.2016.08.002

Setiawan, H. (2013). Transfer Pricing dan Risikonya Terhadap Penerimaan Negara. Journal of Chemical Information and Modeling, 53(9), 1689–1699. https://doi.org/10.1017/CBO9781107415324.004

Siti, Khusnul, K. (2018). Pengaruh Beban Pajak, Tunneling Incentive, Dan Ukuran Perusahaan Terhadap Keputusan Perusahaan Dalam Melakukan Transfer Pricing(Studi Empiris Pada Perusahaan Multinasional Yang Listing Di Bursa Efek Indonesia Tahun 2013-2017). Jurnal Ekobis Dewantoro, 1(12), 125–138.

Suandy, E. (2011). Perencanaan Pajak. Edisi Kelima. Salemba Empat, Yogyakarta.

Taylor, G., Richardson, G., & Lanis, R. (2015). Multinationality, Tax Havens, Intangible Assets, and Transfer Pricing Aggressiveness: An Empirical Analysis. Journal of International Accounting Research, 14(1), 25–57. https://doi.org/10.2308/jiar-51019

Watts, R. and J. Z. (1986). Positive Accounting Theory. New York: Englewood Cliffs.

Wier, L. (2020). Tax-motivated transfer mispricing in South Africa?: Direct evidence using transaction data. Journal of Public Economics, 184, 104153. https://doi.org/10.1016/j.jpubeco.2020.104153