This study examines the implications of Thin Capitalization, Transfer Pricing, and Foreign Ownership on Tax Avoidance within LQ45 companies during the period from 2019 to 2023. A purposive sampling method was employed to obtain a sample of 180 observations from a total of 225 companies. Panel data regression analysis was conducted utilizing Stata 18. The results indicate that Thin Capitalization exerts a negative influence on Tax Avoidance, whereas Transfer Pricing demonstrates a positive effect. Additionally, Foreign Ownership was found to have no significant impact on Tax Avoidance. This study offers a new insight into tax avoidance among Indonesian companies, highlighting how the corporate governance structure can influence tax strategies. It finds that the thin capitalization strategy and transfer pricing of a company are more influenced by management factors than by the structure of its shareholders. Investors should focus on the transparency of company tax policies, as managerial decisions have a greater impact on tax avoidance than ownership structure. Meanwhile, stricter oversight and clearer regulations are needed to prevent tax avoidance and profit shifting.
Imannuel et al. (Fri,) studied this question.