Title:
The Impact of Transfer Price, Leverage, Profitability, and Firm Size on Tax Avoidance

Authors:
Suwaldiman, Shofura Az Zahra, Indonesia

Abstract:

Taxes have become the largest contributor to state revenue. With it, the tax government must contribute a lot of funds, so it is necessary to pay attention to tax payment compliance. As for companies that are taxpayers, they tend to want to reduce the cost of paying taxes. Conflicts of interest between the government and companies in taxation have become a frequent discussion. This study aims to continue to raise the discussion and prove the hypothesis that the variables of transfer pricing, leverage, profitability, and firm size have a significant positive effect on tax avoidance activities. The research was conducted on companies in the industrial, financial, and raw material sectors listed on the IDX during 2019-2021 using the multiple linear regression model analysis method. This research reveals that transfer price has a negative impact on tax avoidance. Leverage and profitability have a positive impact on tax avoidance. Meanwhile, firm size has no impact on tax avoidance. The lower transfer pricing tends to decrease the intensity of tax avoidance. The more leverage and profitability will drive the company to increase the intensity of tax avoidance. However, firm size is not so important in affecting the intensity of tax avoidance.

DOI: https://doi.org/10.51505/IJEBMR.2025.9317