Determinants of Tax Avoidance of Public Listed Companies in Indonesia

Abstract

Current literatures on the factors that effects tax avoidance in corporation produced mix result. Therefore, this study aims to obtain empirical evidence on the influence of ownership structure and corporate governance on tax avoidance and to examine the differences in the tax avoidance before and after-tax amnesty. The population of the study is public listed companies in the Indonesia Stock Exchange for the period of 2012-2017. Data was collected using a purposive sampling method. This study uses multiple regression analysis to investigate determinants of tax avoidance of public listed companies. The results showed that foreign ownership, family ownership and independent directors did not significantly influence tax avoidance. However, the CG-score Index has a significant effect on tax avoidance. The finding also showed there was no difference in the tax avoidance before and after the application of tax amnesty. The result of this study provides more and accurate information including the recognition of permanent and temporary differences that are commonly used as loopholes in tax avoidance action. It can be utilized as input for the Directorate General of Tax (DJP) to evaluate tax regulations, with the hope of increasing taxpayer compliance.