Transfer Pricing, Tax Avoidance, and the Role of Good Corporate Governance
Abstract
This quantitative study aims to examine the effect of transfer pricing on tax avoidance and the moderating role of good corporate governance in energy sector companies listed on the Indonesia Stock Exchange during 2020-2024. Based on multiple linear regression and moderated regression analysis, the result shows that transfer pricing has a negative and significant effect on tax avoidance, indicating that higher transfer pricing exposure increases regulatory risk and thereby constrains aggressive tax avoidance practices. Furthermore, good corporate governance significantly weakens the negative relationship between transfer pricing and tax avoidance, indicating that the implementation of good corporate governance may still be symbolic and therefore is unable to effectively suppress tax avoidance practices. This study provides practical implications regarding the importance of strengthening transfer pricing regulations and encourages more substantive implementation of good corporate governance in enhancing oversight of transfer pricing practices.
Keywords
References
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DOI: https://doi.org/10.17509/jrak.v14i2.103085
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