Country Governance Moderating Financial Characteristics and Tax Avoidance in G20

Muhammad Rizki Nursoleh (3Faculty of Digital Business and Law, Maranatha Christian University, Bandung)
Lauw Tjun Tjun (Faculty of Digital Business and Law, Maranatha Christian University, Bandung)
Meyliana (Faculty of Digital Business and Law, Maranatha Christian University, Bandung)

Jurnal Akuntansi
Vol. 30 No. 3 (2026): September-December 2026

This research examines how profitability, leverage, and capital intensity affect tax avoidance among non-financial enterprises in G20 countries. It also takes national goivernance into account as a moderating component. This research uses panel-data regression and moderated regression analysis to panel data derived from business financial reports and the Worldwide Governance Indicators. While profitability does not directly affect tax avoidance, the data show that capital intensity and leverage both considerably impact it. The results also show that nation governance amplifies the link between tax avoidance and profitability, but has no impact on the interaction between leverage and the same phenomenon. Furthermore, the interaction between capital intensity and tax avoidance is moderated by government quality. The findings show that governance circumstances affect the impact of business characteristics on tax avoidance strategies and that institutional quality is important in explaining disparities in corporate tax behavior across countries.