The Effect of Transfer Pricing, Capital Intensity on Tax Avoidance with Sustainability Report as a Moderation Variable
DOI:
https://doi.org/10.38035/dijefa.v7i2.6728Keywords:
Transfer pricing, Capital intensity, Tax avoidance, Sustainability reportAbstract
Tax data shows an increasing trend in Tax avoidance, with tax target achievements of 107.15% in 2021, 115.6% in 2022, 108.8% in 2023, and 97.2% in 2024, highlighting the need to analyze factors that influence Tax avoidance. On the other hand, sustainability reporting is considered to reflect a company's commitment to transparency and social responsibility, which can reduce the tendency for Tax avoidance. This study aims to examine the effect of Transfer pricing and Capital intensity on Tax avoidance, as well as to test sustainability reporting as a moderating variable. Secondary data were collected from the financial statements and sustainability reports of 20 energy sector companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period, with the sample selected using purposive sampling. Analysis was conducted using Moderated Regression Analysis (MRA) via SPSS. The results indicate that before moderation, Transfer pricing has a significant positive effect on Tax avoidance, but after being moderated by sustainability reporting, the effect becomes significantly negative, suggesting that sustainability reporting can curb Tax avoidance practices. Capital intensity has a significant negative effect on Tax avoidance, both before and after moderation. The interactions between Transfer pricing and Sustainability reporting, as well as between Capital intensity and Sustainability reporting, strengthen the influence of the independent variables on Tax avoidance. These findings confirm that sustainability reporting plays a strategic role in enhancing corporate transparency and accountability regarding tax obligations.
References
Alam, M. H., & Fidiana. (2019). The Influence of Profit Management, Liquidity, Leverage, and Corporate Governance on Tax Avoidance. Journal of Accounting Science and Research, 8(2), 1–22.
Alfarizi, R. I., Sari, R. H. D. P., & Ajengtiyas, A. (2021). The effect of profitability, transfer pricing, and profit management on tax avoidance. National Research Conference on Economics, Management, and Accounting, 2(1), 898–917.
Andoko, A. A., Jatmiko, T., & Prabowo, W. (2024a). The effect of capital intensity and leverage on tax avoidance with company size as a moderation variable. Diponegoro Journal of Accounting, 13(4), 1–15. http://ejournal-s1.undip.ac.id/index.php/accounting
Cahyo, F. D., & Iswanaji, C. (2023). Literature review: Factors influencing tax avoidance in manufacturing companies in Indonesia. Journal of Economalia, 2(2), 359–368. https://doi.org/10.55681/economina.v2i2.260
Harsono, B. (2024). The effect of tax avoidance and corporate governance on firm value with sustainability reporting as moderation. 24(2), 1411–8831. https://doi.org/10.25105/mraai.v24i2.18809
Indri Pratiwi, N., Luk Fuadah, L., & Sriwijaya, U. (n.d.). The influence of environmental, social, and governance (ESG), political connections, gender diversity, and capital intensity on tax avoidance. Asian Journal of Management Entrepreneurship and Social Science. https://ajmesc.com/index.php/ajmesc
Kamila, S., Khasanah, U., Nuryati, T., & Artikel, H. (n.d.). The effect of corporate social responsibility, capital intensity, and transfer pricing on tax avoidance. ETHNIC: Journal of Economics-Engineering.
Kurniawan, M. A. (2024). The effect of transfer pricing and foreign ownership on tax avoidance with capital intensity as a moderation variable. Indonesian Journal of Management Studies (IJMS), 2(3). https://dmi-journals.org/ijms/index
Lutfitriyah, L., Anwar, S., Development, U., Veteran, N., & Timur, J. (2021). Determinants of tax avoidance with firm size as a moderation variable. 1(1), 485–496.
Magister, J., Trisakti, A., Nadhifah, M., & Arif, A. (2020). Transfer pricing, thin capitalization, financial distress, earning management, and capital intensity on tax avoidance moderated by sales growth. 7(2), 145–170. https://doi.org/10.25105/jmat.v7il.6311
Mariani, D. (2020). Factors that affect tax avoidance in consumer goods companies listed on the IDX. Scientific Journal of Unified Accounting, 8(3), 253–262. https://doi.org/10.37641/jiakes.v8i3.347
Nindiana Okta Auliya, Juli Ratnawati, Enny Susilowati Mardjono, & Ratna Herawati. (2024). The effect of institutional ownership, transfer pricing, and sales growth on tax avoidance. Al-Kharaj: Journal of Sharia Economics, Finance & Business, 6(5), 4197–4219. https://doi.org/10.47467/alkharaj.v6i5.1616
Oktania, Y., & Partama Putra, Y. (2023). Transfer pricing aggressiveness, thin capitalization, political connections, financial performance, and tax avoidance: Corporate governance as a moderating variable. 4(3). https://penerbitadm.com/index.php/JURNALEMAK
Priharta, A., Accounting of the Faculty of Economics and Business, M., & Muhammadiyah Jakarta, U. (n.d.). The Influence of Profitability, Family Ownership, and Transfer Pricing on Tax Avoidance Mediated by Good Corporate Governance. Journal of Business Research, 6(1).
Purba, O. J. A. (n.d.). The effect of transfer pricing and good corporate governance on tax avoidance. Journal of Economics, Cooperatives & Entrepreneurship, 14(12), 202www.kemenkeu.go.id
Puspitasari, A. P., & Wulandari, S. (2022). Analysis of factors affecting tax avoidance of banking companies. Scientific Journal of Unified Accounting, 10(2), 341–352. https://doi.org/10.37641/jiakes.v10i2.1330
Rahmawati, R. (2019). Taxpayers' compliance in paying motor vehicle taxes at Samsat Padang City. Journal of Business and Economics (JBE) UPI YPTK, 4(1), 13–19. https://doi.org/10.35134/jbeupiyptk.v4i1.83
Ramdhani1, M. D., Zahra, Y., Fitria, N., & Rachman, A. A. (n.d.). The effect of transfer pricing on tax avoidance in manufacturing companies listed on LQ 45 Indonesia Stock Exchange 2015–2019. Turkish Journal of Physiotherapy and Rehabilitation, 32(3). www.turkjphysiotherrehabil.org
Sandi, N. K., Ubaidillah, M., & Sudrajat, A. (n.d.). The effect of capital intensity and transfer pricing on tax avoidance with profitability as a moderation variable.
Sari Mujiani, Efrinal, & Irfan Safrudin. (2024). The Influence of Good Corporate Governance and Corporate Social Responsibility on Tax Avoidance. Journal of Assets: Accounting and Financial Research, 6(2), 138–151. https://doi.org/10.52005/aktiva.v6i2.246
Setiawan, D. (2024). The Effect of Profit Management, Liquidity, Leverage, and Profitability on Tax Avoidance of Basic and Chemical Companies Listed on the Indonesia Stock Exchange (IDX) for the 2019–2023 Period. Global Accounting: Journal of Accounting, 3(2), 1–7.
Sofian, F., & Djohar, C. (2022). The effect of transfer pricing, capital intensity, and institutional ownership on tax avoidance (an empirical study on manufacturing companies in various industrial sectors listed on the Indonesia Stock Exchange in 2016–2020). Indonesian Journal of Management Studies (IJMS, 1(1). www.cnbcindonesia.com
Sulaeman, R. (2021). The effect of profitability, leverage, and company size on tax avoidance. Syntax Idea, 3(2), 354–367. https://doi.org/10.46799/syntax-idea.v3i2.1050
Theodora Gunawan, C., & Asih Surjandari, D. (2022). The effect of transfer pricing, capital intensity, and earnings management on tax avoidance. Journal of Economics, Finance and Accounting Studies. https://doi.org/10.32996/jefas
Widiani, V., & Trisnawati, E. (2024). The impact of transfer pricing, capital intensity, thin capitalization on tax avoidance with sales growth as moderating variable in pharmaceutical and health companies listed on Indonesia Stock Exchange 2017–2022. Journal of Social Sciences and Humanities, 7(3). https://jayapanguspress.penerbit.org/index.php/ganaya110
Widuri, R., Tjahjono, P. A., Felicia, V. R. A., & Fudianto, M. (2020). Female board membership and sustainability: Can they mitigate tax avoidance in Indonesia and Malaysia? 158(Teams), 296–30https://doi.org/10.2991/aebmr.k.201212.042
Wisnu, G. G., & Yuniarwati. (2023). Factors influencing tax avoidance in manufacturing companies. Syntax Literate: Indonesian Scientific Journal, 8(10), 5668–5677. https://doi.org/10.36418/syntax-literate.v8i10.13765
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Anggi Regita Cahyani, Harnovinsah, Darmansyah, Sri Ambarwati, Syahril Djaddang
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish their manuscripts in this journal agree to the following conditions:
- The copyright on each article belongs to the author(s).
- The author acknowledges that the Dinasti International Journal of Economics, Finance & Accounting (DIJEFA) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
- Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Dinasti International Journal of Economics, Finance & Accounting (DIJEFA).
