Looking for Empirical Evidence Between Accounting Conservatism and Ownership Structure Towards the Aggressive Tax Avoidance in Public Listed Companies of Indonesia

Mustaruddin Saleh, Kurniaty ., Muhsin .


Tax aggressiveness is a strategy that still resides in a grey area that is attractive to management for being able to achieve corporate’s and government’s objectives simultaneously. This study aimed to get empirical evidence about the effect of accounting conservatism and ownership structure against aggressive tax avoidance actions on listed manufacturing companies period 2012-2016. The dependent variable in this study is aggressive tax avoidance proxied by the effective tax rate. While the independent variables are accounting conservatism, institutional ownership, managerial ownership and foreign ownership. This study also had a control variable, those are a return on assets (ROA), debt to total asset ratio (DAR) and capital intensity ratio (CIR). Sampling was done by purposive sampling method with a total of 194 samples from 49 companies for five years. The research result of multiple linear regression analysis showed that accounting conservatism and foreign ownership have a significant negative impact against aggressive tax avoidance. Meanwhile, institutional ownership and managerial ownership have no significant impact on aggressive tax avoidance.

Keywords: Effective Tax Rate, Accounting Conservatism, Institutional Ownership, Managerial  Ownership and Foreign Ownership.

JEL Classification: G3, M4

DOI: 10.7176/RJFA/10-10-03

Publication date:May 31st 2019

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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