Research Article
Taxes and Foreign Ownership in Transfer Pricing Indications at the Covid-19 Pandemic Era
@INPROCEEDINGS{10.4108/eai.2-8-2023.2341482, author={Olivi Sabilla Sa’dani and Sumaryanto Sumaryanto}, title={Taxes and Foreign Ownership in Transfer Pricing Indications at the Covid-19 Pandemic Era}, proceedings={Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia}, publisher={EAI}, proceedings_a={ICEB}, year={2024}, month={6}, keywords={taxes foreign ownership transfer pricing indication}, doi={10.4108/eai.2-8-2023.2341482} }- Olivi Sabilla Sa’dani
Sumaryanto Sumaryanto
Year: 2024
Taxes and Foreign Ownership in Transfer Pricing Indications at the Covid-19 Pandemic Era
ICEB
EAI
DOI: 10.4108/eai.2-8-2023.2341482
Abstract
The Covid-19 pandemic has impacted economic conditions in the business sector. Several sectors' business income has decreased, impacting fiscal policy. Fiscal policies made by the government can encourage tax avoidance behavior. One of the tax avoidance that can occur is transfer pricing activity. This study investigates how transfer pricing indicators during the COVID-19 epidemic were impacted by taxes and foreign ownership. Using representative multinational corporations listed on the Indonesia Stock Exchange in 2020–2021, it examined the notion of agency and legitimacy. The results showed that taxes have a significant positive effect on transfer pricing, where the more fantastic the taxes, the higher the company to transfer pricing indications. Furthermore, this study also proves that foreign ownership has a positive effect. The study's results do not support the legitimacy theory, explaining the role of foreign ownership in gaining legitimacy from the public by not doing transfer pricing.