Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking

Despite being a crucial source of funding for the government, tax revenue collection in Indonesia has yet to reach its ideal and satisfying level for the economy. Therefore, this study explores the impact of executive incentives, foreign ownership, and transfer pricing on tax avoidance. The conventi...

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Published in:Journal of Risk and Financial Management
Main Author: Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
Format: Article
Language:English
Published: Multidisciplinary Digital Publishing Institute (MDPI) 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85183405558&doi=10.3390%2fjrfm17010026&partnerID=40&md5=8d76f01aae9d5e5038abd21c41a36e9a
id 2-s2.0-85183405558
spelling 2-s2.0-85183405558
Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
2024
Journal of Risk and Financial Management
17
1
10.3390/jrfm17010026
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85183405558&doi=10.3390%2fjrfm17010026&partnerID=40&md5=8d76f01aae9d5e5038abd21c41a36e9a
Despite being a crucial source of funding for the government, tax revenue collection in Indonesia has yet to reach its ideal and satisfying level for the economy. Therefore, this study explores the impact of executive incentives, foreign ownership, and transfer pricing on tax avoidance. The conventional banks of Indonesia that were listed on the Indonesia Stock Exchange (IDX) between 2015 and 2019 are the subject of this study. This study employed a purposive selection technique, with a final sample of 17 banks chosen after screening to ensure they met the requirements of having foreign ownership and not having suffered losses during the study year. The results of this study show that while CEO incentives harm tax avoidance, foreign ownership has a beneficial effect. Furthermore, tax avoidance is not significantly impacted by transfer pricing. The findings of this investigation open the door for accountable authorities in the economy. © 2024 by the authors.
Multidisciplinary Digital Publishing Institute (MDPI)
19118074
English
Article
All Open Access; Gold Open Access
author Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
spellingShingle Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
author_facet Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
author_sort Putri V.R.; Zakaria N.B.; Said J.; Ghapar F.; Anita R.
title Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
title_short Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
title_full Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
title_fullStr Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
title_full_unstemmed Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
title_sort Tax Tightrope: The Perils of Foreign Ownership, Executive Incentives and Transfer Pricing in Indonesian Banking
publishDate 2024
container_title Journal of Risk and Financial Management
container_volume 17
container_issue 1
doi_str_mv 10.3390/jrfm17010026
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85183405558&doi=10.3390%2fjrfm17010026&partnerID=40&md5=8d76f01aae9d5e5038abd21c41a36e9a
description Despite being a crucial source of funding for the government, tax revenue collection in Indonesia has yet to reach its ideal and satisfying level for the economy. Therefore, this study explores the impact of executive incentives, foreign ownership, and transfer pricing on tax avoidance. The conventional banks of Indonesia that were listed on the Indonesia Stock Exchange (IDX) between 2015 and 2019 are the subject of this study. This study employed a purposive selection technique, with a final sample of 17 banks chosen after screening to ensure they met the requirements of having foreign ownership and not having suffered losses during the study year. The results of this study show that while CEO incentives harm tax avoidance, foreign ownership has a beneficial effect. Furthermore, tax avoidance is not significantly impacted by transfer pricing. The findings of this investigation open the door for accountable authorities in the economy. © 2024 by the authors.
publisher Multidisciplinary Digital Publishing Institute (MDPI)
issn 19118074
language English
format Article
accesstype All Open Access; Gold Open Access
record_format scopus
collection Scopus
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