THE IMPACT OF FOREIGN OWNERSHIP ON TAX AVOIDANCE IN COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE

Article Sidebar

ARTICLE PDF
Published Apr 21, 2022

Main Article Content

Dica Lady Silvera

Abstract

This research aims to provide empirical evidence of the effect of foreign ownership on tax avoidance. The dependent variable is tax avoidance as measured by the effective tax rate proxy (ETR), and the independent variable is foreign ownership and uses three control variables. The test uses a sample consisting of 141 companies listed on the Indonesia Stock Exchange in 2017-2019. The results show that foreign ownership has a significant negative effect on tax avoidance, where the greater the foreign ownership, the lower the company’s sign for tax avoidance. The results of the study support the theory of legitimacy, explaining foreign ownership in gaining legitimacy from the community by not avoiding taxation. The implication of this research is that the government can encourage an increase in foreign ownership to optimize tax payments or reduce tax avoidance.

Article Details

How to Cite
Lady Silvera, D. (2022). THE IMPACT OF FOREIGN OWNERSHIP ON TAX AVOIDANCE IN COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE. INTERNATIONAL CONFERENCE ON GLOBAL EDUCATION, 959-963. Retrieved from https://ejurnal.unespadang.ac.id/index.php/ICGE/article/view/178
Issue
INTERNATIONAL CONFERENCE ON GLOBAL EDUCATION IX
Section
ECONOMICS, MANAGEMENT, AND ACCOUNTING (ICGE IX)
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

[1] An, Y., Davey, H., Eggleton, I.R.C., 2011. Towards a comprehensive theoretical framework for voluntary IC disclosure. J. Intellect. Cap. 12 (4), 571–585
[2] Badertscher, B., Katz, S. and Rego, S. (2013), “The separation of ownership and control and corporate tax avoidance”, Journal of Accounting and Economics, Vol. 56 Nos 2/3, pp. 228-250.
[3] Barros, V. and Sarmento, J. (2020), “Board meeting attendance and corporate tax avoidance: Evidence from the UK”, Business Perspectives and Research, Vol. 8 No. 1, pp. 51-66.
[4] Chen, S. P., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95(1), 41–61
[5] Diantari, P. R., & Ulupui, I. A. (2016). Pengaruh Komite audit, Proporsi Komisaris Independen, dan Proporsi kepemilikan Institusional terhadap Tax Avoidance, 16, 702–732
[6] Deegan, C. M. (2018). Legitimacy theory time is right for a necessary makeover. Accounting, Auditing & Accountability Journal. https://doi.org/10.1108/AAAJ-08-2018-3638
[7] Dowling, J., & Pfeffer, J. (1975). Organizational Legitimacy: Social Values and Organizational Behavior between the Organizations seek to establish congruence. The Pacific Sociological Review, 18(1), 122–136.
[8] Ghozali, I., & Chariri, A. (2007). Teori Akuntansi. Semarang: Badan Penerbit Universitas Diponegoro.
[9] Hasan, I., Kim, I., Teng, H. and Wu, Q. (2016), “The effect of foreign institutional ownership on corporate tax avoidance: international evidence”, Bank of Finland Research Discussion Paper
[10] Huizinga, H., Nicodeme, G., 2006. Foreign ownership and corporate income taxation: an empirical evaluation. Eur. Econ. Rev. 50 (5), 1223–1244.
[11] Suranta, Eddy, Pratana Puspa Midiastuty, Hairani Ramayanti Hasibuan. (2022) The Effect of Foreign Ownership and Foreign Board Commissioners on Tax Avoidance. Journal of Economics, Business, and Accountancy Ventura Vol. 22, No. 3, Desember 2019 – Maret 2020, pages 309 – 318 309
[12] Williams, D.F., 2007b. Developing the Concept of Tax Governance. KPMG, London
[13] www.globalwitness.org
[14] www.kemenkeu.go.id