Do Country Characteristics Affect the Complementary Level of Financial and Tax Aggressiveness?

Rachmawati, Nurul Aisyah; Utama, Sidharta; Martani, Dwi; Wardani, Ratna

doi:10.21315/aamjaf2020.16.1.3

Cited by 5 publications

(6 citation statements)

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“…Additionally, it was confirmed by Nugroho et al (2020) and Rachmawati et al (2020) that aggressive tax activities and aggressive financial reporting efforts have begun to collaborate. This ruling is the source of numerous corporate tax loopholes resulting from inconsistencies (nonconformity) between accrual accounting and taxation standards.…”

Section: Aggressive Financial Reportingmentioning

confidence: 95%

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Corporate Reporting, Corporate Governance Mechanisms and Tax Aggressiveness: Evidence from Indonesia

Kesumaningrum,

Bujang,

Muda

et al. 2023

APMAJ

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This study aimed to empirically analyze the relationship between corporate reporting, both mandatory (financial reporting) and voluntary (Corporate Social Responsibility (CSR) disclosure) reporting, three corporate governance mechanisms (board size, independent board, and CEO duality), and tax aggressiveness in Indonesia. The study used a collected dataset of 121 public companies listed on the Indonesian stock exchange from 2016 to 2020. The data was collected from annual and sustainability reports published on the IDX and the company websites. The data was categorized based on classifications of non-financial industries because different characteristics and business cycles may influence tax aggressiveness decisions. Using the panel OLS approach, the research found that, in most industries, aggressive financial reporting positively relates, while CSR disclosures were negatively related to tax aggressiveness. The results also found that corporate governance mechanisms significantly related to tax aggressiveness in most industries. The findings suggest that board members, particularly independent boards with tax expertise and experience, can influence aggressive tax decisions. This study is the first to extract testing by industry classification, using mandatory financial reporting and voluntary CSR disclosures in Indonesia as indicators of corporate tax aggressiveness. The findings provide knowledge on company governance strategies to reduce aggressive tax actions. Keywords: aggressive financial reporting, corporate social responsibility, corporate governance mechanisms, tax aggressiveness

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Section: Aggressive Financial Reportingmentioning

confidence: 95%

“…If a company's income rises, the tax rises, and if the income falls, the tax falls. However, other research found no trade-off between aggressive tax and financial reporting (Firmansyah, 2019;Frank et al, 2009;Nugroho et al, 2020;Rachmawati et al, 2020).…”

Section: Aggressive Financial Reportingmentioning

confidence: 95%

Corporate Reporting, Corporate Governance Mechanisms and Tax Aggressiveness: Evidence from Indonesia

Kesumaningrum,

Bujang,

Muda

et al. 2023

APMAJ

View full text Add to dashboard Cite

show abstract

“…If a company's income increases, so does the tax; if it decreases, so does the tax. Other research, however, discovered no trade-off between aggressive tax and financial reporting, indicating that companies can simultaneously increase reported income and decrease tax obligations (Firmansyah, 2019;Frank et al, 2009;Nugroho et al, 2020;Rachmawati et al, 2020).…”

Section: Board Structure Csr Disclosures Aggressive Financial Reporti...mentioning

confidence: 99%

Investigating CSR Disclosures and Aggressive Financial Reporting in Relation to Tax Aggressiveness: Can Board Structure Change The Status Quo?

KESUMANINGRUM,

BUJANG,

MUDA

2024

IJEM

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In recent years, academic researchers and policymakers have increasingly discussed the role of Corporate Social Responsibility (CSR) disclosures and aggressive financial reporting in tax aggressiveness. Tax aggressiveness can be defined as a company's eagerness in using legal loopholes and other methods of tax reduction. Companies must evaluate how their tax practices affect their reputation and adhere to tax reporting and CSR standards. The objective of this research is to investigate in the relationship between CSR disclosures and aggressive financial reporting on tax aggressiveness moderated by board structures. The board's internal control function is expected to reduce tax aggressiveness-related risks. The study employed static panel data regression analyses on 665 firm-year data from the Indonesia Stock Exchange from 2016 to 2020. This study discovered that a larger board size could diminish the negative relationship between CSR disclosure and tax aggressiveness in particular industries while strengthening the positive relationship between aggressive financial reporting and tax aggressiveness. The current work suggests that companies with more independent boards of directors could increase the negative association between CSR disclosure and tax aggressiveness while reducing the positive association between aggressive financial reporting and tax aggressiveness. This study could reference future corporate policy regarding the most effective board structures to minimise tax aggressiveness.

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“…Menurut Tang, (2014) BTC yang tinggi memiliki potensi dalam pembatasan pelaporan keuangan dan pajak yang agresif yang dilakukan manajer dan hal ini dapat dimanfaatkan oleh pemerintah, investor dan pendukungnya. Hasil ini juga berbanding terbalik dengan penelitian yang dilakukan oleh Rachmawati et al ( , 2020; Rachmawati dan Martani (2017); membuktikan bahwa BTC berpengaruh positif terhadap agresivitas pelaporan keuangan dan trade-offs yang muncul dalam hubungan keduanya biasa terjadi karena penerapan level BTC yang tinggi. Sehingga disimpulkan bahwa BTC tidak berpengaruh dalam hubungan agresivitas pajak maupun agresivitas pelaporan keuangan…”

Section: Pengaruh Level Book-tax Confirmatory Terhadap Agresivitas Pe...unclassified

Agresivitas Pajak Terhadap Agresivitas Pelaporan Keuangan Dimoderasi oleh Book-Tax Confirmatory

Kelly

Susanto

2022

JAE

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The purpose of this study is to determine the effect of tax aggressiveness on the financial reporting aggressiveness in Indonesia because both practices are closely related to the profits presented in the financial statements where these financial statements are the center of attention for investors and the general public. In addition, there is a Book-Tax Confirmatory variable as a moderator of the relationship between the two which is allegedly able to create a trade-off and there is also a variable operating cash flow and company size. This study uses a sample of companies on the IDX during 2017-2021 with a purposive sampling method, with the results of tax aggressiveness and book-tax confirmatory having no effect on the financial reporting aggressiveness. However, another result obtained is that operating cash flow has a significant positive effect and company size has a significant negative effect on financial reporting aggressiveness.

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Do Country Characteristics Affect the Complementary Level of Financial and Tax Aggressiveness?

Cited by 5 publications

References 0 publications

Corporate Reporting, Corporate Governance Mechanisms and Tax Aggressiveness: Evidence from Indonesia

Corporate Reporting, Corporate Governance Mechanisms and Tax Aggressiveness: Evidence from Indonesia

Investigating CSR Disclosures and Aggressive Financial Reporting in Relation to Tax Aggressiveness: Can Board Structure Change The Status Quo?

Agresivitas Pajak Terhadap Agresivitas Pelaporan Keuangan Dimoderasi oleh Book-Tax Confirmatory

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