The Effect of Transfer Pricing and Thin Capitalization on Tax Avoidance with Profitability as a Moderating Variable

Adelia Pramesti Fitriandari (Universitas Negeri Surabaya)
Aisyaturrahmi Aisyaturrahmi (Universitas Negeri Surabaya)

Formosa Journal of Multidisciplinary Research (FJMR)
Vol. 4 No. 7 (2025): July 2025

This study aims to analyze the effect of transfer pricing and thin capitalization on tax avoidance with profitability as a moderating variable in processing industry sector companies listed on the Indonesia Stock Exchange in 2021 - 2023. The research method used in this research is a quantitative method. The sampling technique used in this research was purposive sampling and 53 companies were obtained over a 3 year period, and 159 research sample units were obtained. The data analysis technique used is multiple linear regression analysis and moderated regression analysis (MRA) using STATA 17 software. The research results partially prove that transfer pricing and thin capitalization have no effect on tax avoidance and profitability is able to provide moderation on the relationship between transfer pricing and thin capitalization on tax avoidance. Simultaneously shows that transfer pricing and thin capitalization have an effect on tax avoidance.