<![CDATA[Purpose: This study aims at understanding the impact of tax aggressiveness on firm performance and investigates whether green innovation is able to dampen the adverse effect of tax aggressiveness. Methodology/approach: This study uses a quantitative associative approach with secondary data that were obtained from 76 non-financial companies listed in Indonesia Stock Exchange (IDX) that publish sustainability report continuously in 2019-2023. The final sample is made up of 380 observations of firms per year. The data was analyzed using panel data regression model with Fixed Effect Model (FEM) using STATA software. Findings: The results show that tax aggressiveness is significantly negatively correlated to firm performance. In addition, green innovation is found to positively moderate this relationship, indicating that green innovations help mitigate the adverse effects of tax aggressiveness on firm performance, hence lowering the risk of tax aggressiveness. Practical implications: The results underline the need for integrating strategies for tax optimization with strategies to promote sustainability. The companies are urged to improve green innovation initiatives and conduct responsible tax to increase financial performance in the long term. Originality/value This study adds value to the literature as it investigates the study of green innovation as a moderating variable between the relationship of tax aggressiveness and firm performance. This builds on the Resource-Based View (RBV) view by focusing on green innovation as a strategic competence in an emerging-market environment.]]>
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