Effect of profitability, leverage and company size on tax avoidance

Abstract

Tax avoidance is interesting to study because avoidance of tax can be performed as long as it does not violate applicable tax regulations. Therefore, this study aims to examine the effect of profitability, leverage and firm size on tax avoidance. The study was conducted by observing data on manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) for four years of observation. The choice of sampling uses purposive sampling. Analysis of the data used in this study is by using multiple linear regression. The results of this study provide empirical evidence that profitability does not affect tax avoidance while leveraging and firm size influence tax avoidance.