The Effect of Tax Expenses, Tunneling Incentives, and Level of Debt on Transfer Pricing

Agustiningsih, Wulandari; Riski, Gebrina; Purwaningsih, Eny; Hermanto, Hermanto; Indrati, Menik

doi:10.30736/ja.v7i1.821

Cited by 3 publications

(5 citation statements)

References 2 publications

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“…The next factor is a tunneling incentive, which is the behaviour of the majority shareholder who transfers the company's assets for the benefit of the majority shareholder. Research conducted by Agustiningsih et al (2022) states that tunneling incentives affect transfer pricing, and shareholders will try to divert company profits to increase shareholder company profits through transfer pricing schemes. Debt covenants are indicated to be a factor causing transfer pricing; debt covenants are debt agreements addressed to debtors by creditors, research conducted by Grantley Taylor; Grant Richardson; Roman Lanis (2015) and Rahmadhani & Ananda (2022) state that debt covenants have a positive effect on transfer pricing.…”

Section: Figure 12 Realization Tax Revenues 2019 -2021mentioning

confidence: 99%

The Effect of Profitability, Tunneling Incentive, Debt Covenant, and Intangible Assets on Transfer Pricing Decisions with Tax Minimization as Moderating Variables: A Case Study of Manufacturing Companies Listed on the Indonesia Stock Exchange in (2019 – 2

Kristina

Muhyarsyah²

2023

JEFAS

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The increase of foreign investment in Indonesia in 2020 and 2021 will cause increased reception from side taxation, but the tax justice network reports that Indonesia is still experiencing loss from side tax revenue, a loss caused by corporate tax avoidance by the company multinational through transfer pricing schemes. This research aims to investigate the influence of profitability, tunneling incentives, debt covenants, and intangible assets as indicated factor influence transfer pricing decisions with tax minimization as variable moderation. The research method used is quantitative with the technique of taking samples using purposive sampling; the number of samples was 27 companies out of the 195 population. Research results revealed that profitability, tunneling incentives, and debt covenants positively affect transfer pricing decisions; meanwhile, tax minimization moderates the effect of profitability, tunneling incentives, debt covenants, and intangible assets on transfer pricing decisions.

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Section: Figure 12 Realization Tax Revenues 2019 -2021mentioning

confidence: 99%

The Effect of Profitability, Tunneling Incentive, Debt Covenant, and Intangible Assets on Transfer Pricing Decisions with Tax Minimization as Moderating Variables: A Case Study of Manufacturing Companies Listed on the Indonesia Stock Exchange in (2019 – 2

Kristina

Muhyarsyah²

2023

JEFAS

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“…dengan tarif pajak lebih rendah (Satria et al, 2021). dalam (Rahayu et al, 2020). Adapun rumus yang digunakan yaitu sebagai berikut:…”

Section: Abstrakunclassified

“…Penggunaan proksi ROA pada penelitian ini sama dengan penelitian yang dilakukan oleh (Rahayu et al, 2020). Pengukuran yang dipakai untuk tunneling incentive yaitu dengan melihat kepemilikan saham terbesar dan jumlah saham beredar.…”

Section: Profitabilitas (X1)unclassified

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Pengaruh Profitabilitas, Tunneling Incentive, Dan Intangible Assets Terhadap Transfer Pricing

Puspita Sari,

Purwaningsih

2023

JAJ

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One of the problems faced by multinational companies occurs when determining transfer pricing, many different factors can affect the determination of transfer pricing. This study aims to determine the effect of profitability, tunneling incentives and intangible assets on transfer pricing. The population in this study are energy sector companies listed on the Indonesia Stock Exchange for the 2017-2021 period. As a research sample, 15 of 79 companies in the energy sector were taken using a purposive sampling method so that the total observations in this study were 75 observations. The data analysis technique used is multiple linear regression testing using SPSS version 25 software. The result of the analysis in this research showed that profitability and tunneling incentive has negative effect on transfer pricing whilet intangible assets positive effect on transfer pricing. In the determination coefficient test, it shows that profitability, tunneling incentive, and intangible assets variables affect transfer pricing by 34.4%, while the remaining 65.6% is explained by other variables outside of the study

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“…For example, da Silva Stefano et al (2022) argue that "inventory levels are an important part of accounting, relocated supply chains and transfer pricing, and traditional costing and accounting methods favour higher inventory levels and can overestimate net income outcomes by up to 70% -especially in scenarios of higher demand variation -compared to yield accounting." Agustiningsih et al (2022) analysed the effect of tax expenditures, incentive tunneling and leverage on transfer prices concluding that tax expenditures and leverage do not have a significant effect on transfer prices, while incentive tunneling has a significant effect on transfer prices. Suryarini et al (2022) also agree, and based on a sample of 145 manufacturing companies, they examined the effects of tunneling incentives on transfer pricing utilization, concluding that tunneling incentives have a positive effect, but at the same time "cannot determine the transfer pricing decision in firms, and minimizing taxes can strengthen the relationship between the tunneling incentive and the transfer pricing decision.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial-Accounting Model for Transfer Pricing Based on Standardised Accounting Policies

Grigoroi,

Grosu,

Melega

2023

EJAFB

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The globalisation of the world's economies and the internationalisation of companies are contributing to the development of new accounting and tax paradigms, which require a particular approach by regulators and multinationals. Increasing tax pressure on multinationals has led to the development of tax minimisation mechanisms through transfer pricing, a niche that has developed mainly due to the lack of tax regulation, i.e. clear tax and accounting policies for pricing transactions between related parties. The aim of this research is to develop a financial-accounting model for transfer pricing based on standardised accounting policies. The research methodology is oriented on the analysis of tax and accounting policies of 163 countries, which are affiliated to different economic and political groups. The results of the research are translated into the design of an econometric model of transfer pricing based on economic and financial information. The results of the research indicate that the method of transfer pricing depends on the economic strength of the affiliated entities that are based in the analysed state, and the dynamics of fiscal health is directly proportional to the overall development of economic security and the economic growth rate of the group. At the same time, it is observed that standardization is a method of optimising the calculation of transfer pricing if the distribution of the tax health index in dynamics at the level of the sample applying standardization is homogeneous. The proposed model helps to ensure that transfer pricing practices are consistent and transparent and that they comply with relevant laws and regulations. The limitations of the research are that the specific details of the model depend on the company's industry, its size and the nature of its operations.

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The Effect of Tax Expenses, Tunneling Incentives, and Level of Debt on Transfer Pricing

Cited by 3 publications

References 2 publications

The Effect of Profitability, Tunneling Incentive, Debt Covenant, and Intangible Assets on Transfer Pricing Decisions with Tax Minimization as Moderating Variables: A Case Study of Manufacturing Companies Listed on the Indonesia Stock Exchange in (2019 – 2

The Effect of Profitability, Tunneling Incentive, Debt Covenant, and Intangible Assets on Transfer Pricing Decisions with Tax Minimization as Moderating Variables: A Case Study of Manufacturing Companies Listed on the Indonesia Stock Exchange in (2019 – 2

Pengaruh Profitabilitas, Tunneling Incentive, Dan Intangible Assets Terhadap Transfer Pricing

Financial-Accounting Model for Transfer Pricing Based on Standardised Accounting Policies

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