Based on the sample of manufacturing companies listed on the IDX from 2013 to
2023, this research indicate that tax haven have positive influence on transfer pricing.
This research result strengthen the previous studies conducted by Anh et al. (2018)-
Irawan & Ulinnuha (2022)- Ramadhan & Kustiani (2017)- Ningtyas & Mutmainah
(2022) that also indicate the positive influence of tax haven on transfer pricing.
Research by Taylor et al. (2014) shows that companies involved in aggressive transfer
pricing often utilize tax havens where profits are subject to low or no corporate tax
rates. Dyreng et al. (2018) reinforces the assertion that the use of tax havens enables
transfer pricing strategies that lower the overall tax burden for multinational
companies including manufacturing companies.
Answer: Tax minimization plays a role in Transfer Pricing in the study (Yulianti &
Rachmawati, 2019) stated that tax minimization successfully moderated tunneling
incentives and debt covenants on transfer pricing, while in other studies there were
inconsistent results. Where (Handayani, 2024)- (Pranatio & Sutrisno, 2024)- and
(Handayani, 2021) stated in their studies that tax minimization had no effect on
transfer pricing. While studies (Makhmudah & Djohar, 2023)- (Mardiana & Badjuri,
2023)- (Salsabila et al., 2023)- (Nuradila & Wibowo, 2018)- (D. K. Devi & Suryarini,
2020)- and (Marfuah et al., 2021) show that tax minimization has an effect on
transfer pricing. Companies do transfer pricing for two reasons. The first reason is to
maximize corporate profits without reducing taxes. While the second reason is to
reduce the tax burden by directing the income or profits of subsidiaries to the parent
company and affiliates. Therefore, the purpose of this study is to test tax
minimization in moderating between tax havens, tunneling incentives on transfer
pricing. And for the phenomenon gap one of which is PT Adaro. PT ADARO with its
subsidiary Coaltrade Service International Pte, Ltd in Singapore is indicated to divert
its income and profits to its subsidiary through transfer pricing.
Answer: Tax minimization plays a role in Transfer Pricing in research (Yulianti &
Rachmawati, 2019) states that tax minimization has succeeded in moderating between
tunnelling incentives and debt convenants on transfer pricing, while in other studies
there is an inconsistency in results. Where (Handayani, 2024)- (Pranatio & Sutrisno,
2024)- and (Handayani, 2021) stated in his research that tax minimization has no effect
on transfer pricing. While the research (Makhmudah & Djohar, 2023)- (Mardiana &
Badjuri, 2023)- (Salsabila et al., 2023)- (Nuradila & Wibowo, 2018)- (D. K. Devi &
Suryarini, 2020)- and (Marfuah et al., 2021) show that tax minimization has an effect
on transfer pricing. Companies do transfer pricing for two reasons. The first reason is to
maximize corporate profits without reducing taxes. While the second reason is to reduce
the tax burden by directing the income or profits of subsidiaries to the parent company
and affiliates. Therefore, the purpose of this study is to test tax minimization in
moderating between tax havens, tunneling incentives on transfer pricing.
Policy implications based on the results of this research have not yet been formulated.
What real policies can be implemented to minimize tax avoidance?
Replies:
Answer : Policy to minimize tax avoidance by strengthening transfer pricing
regulations and guidelines through harmonization of laws related to taxation of
Advance Pricing Agreements (APAs) and Mutual Agreement Procedure (MAPs)
between tax authorities. By ensuring that companies are required to prepare clear
documentation and transparency regarding their company^s transfer pricing policies
in accordance with applicable provisions so as to facilitate supervision by tax
authorities.
