The Effect of Transfer Pricing On Taxes Is Reviewed From Its Relationship With Tunneling Incentives, Intangible Assets, Leverage, And Profitability

  • Mamay Komarudin Doctoral Program, Pakuan University, INDONESIA
  • Hari Gursida Doctoral Program, Pakuan University, INDONESIA
  • Yohanes Indrayono Doctoral Program, Pakuan University, INDONESIA
Keywords: Profitability, Leverage, Intangible Assets, Tunneling Incentives, Transfer Pricing

Abstract

These transfer pricing in multinational companies, there are other motivations besides taxes that affect the management in order to increase profits in the current period. From several studies that have been carried out previously, these motivations include tunnelling incentives, intangible assets, leverage, and profitability for all of these motivations are some of the factors that can influence the company's decision to implement transfer pricing policies. The purpose of the study is to find out the effect of taxes, tunnelling incentives, intangible assets,  leverage, and profitability on transfer pricing in multinational companies and to find out whether there is causality between taxes and transfer pricing in multinational companies. .  Enis this research is explanatory research using data from 2010-2020. The population in this study, namely all multinational companies in the manufacturing and services sector listed on the  KOMPAS 100 index on the Indonesia Stock Exchange (IDX), amounted to 100 companies. Sampel was chosen purposively, namely companies that were members of the KOMPAS 100 index in 2010-2020, totalling 100 companies. The data collection technique in this study is documentation and analysis using a simultaneous equation model for panel data analysis and the Granger causality test. Based on the results of the study, it can be concluded that: 1) Magnitude has a positive effect on the amount of transfer pricing, indicated by the p-value of the tax variable t-test of 0.000 < 0.05; 2) Tis the causal relationship between taxes and transfer pricing, the amount of tax affects transfer pricing, on the contrary transfer pricing  also affects the amount of tax, indicated by the p-value of the Granger causality test < 0.05; 3) Tunneling incentive has no effect on the amount of transfer pricing, indicated by the p-value of the t-test variable tunneling incentive of 0.6192 > 0.05; 4) Intangible assets have no effect on the amount of transfer pricing,  indicated by the p-value of the t-test variable intangible assets of 0.8939 > 0.05; 5) Leverage has no effect on the amount of transfer pricing, indicated by the p-value of the t-test variable leverage of 0.3329 > 0.05; 6) Profitability has no effect on the amount of transfer pricing,  indicated by the profitability variable t-test p-value of 0.3354 > 0.05

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Published
2022-11-12
How to Cite
Komarudin, M., Gursida, H., & Indrayono, Y. (2022). The Effect of Transfer Pricing On Taxes Is Reviewed From Its Relationship With Tunneling Incentives, Intangible Assets, Leverage, And Profitability. Asian Journal of Management, Entrepreneurship and Social Science, 2(04), 305-322. https://doi.org/10.98765/ajmesc.v2i04.175
Section
Articles