<![CDATA[Indonesia's relatively low tax ratio compared to other countries indicated the persistent issue of corporate tax avoidance. This study aimed to examine the effect of transfer pricing on tax avoidance and to assess whether thin capitalization moderated this relationship. The sample consisted of mining companies listed on the Indonesia Stock Exchange from 2021 to 2023. Panel data regression with multiple linear analysis was employed to test the hypotheses. Tax avoidance was proxied by the negative value of the Effective Tax Rate (ETR), while thin capitalization was measured using the Maximum Allowable Debt (MAD) ratio. The results showed that transfer pricing had a significant positive effect on tax avoidance, supporting agency theory. However, thin capitalization weakened the impact of transfer pricing, indicating that companies tended to adopt either strategy to reduce tax risks. These findings provided practical implications for Indonesia’s tax governance, particularly in enhancing transfer pricing oversight and reinforcing thin capitalization regulations.]]>
Copyrights © 2025
