The Effect of Thin Capitalization on Tax Aggressiveness with Profitability, Company Size, Foreign Ownership as Moderation Variables (In Real Estate Companies Listed on The IDX in 2021 – 2023)
DOI:
https://doi.org/10.59890/ijmbi.v4i5.70Keywords:
Thin Capitalization, Tax Aggressiveness, Profitability, Company Size, Foreign OwnershipAbstract
Taxes are a major source of state revenue used to finance national development. However, Indonesia's relatively low tax ratio indicates persistent challenges in tax collection, one of which involves tax avoidance practices through thin capitalization strategies. This practice is commonly associated with companies in the property and real estate sectors. Although these sectors make substantial contributions to Indonesia's Gross Domestic Product (GDP), their tax contributions remain relatively low. This study aims to examine whether profitability, company size, and foreign ownership moderate the effect of thin capitalization on tax aggressiveness. This research employs a quantitative method with a descriptive approach. The results indicate that thin capitalization has no significant effect on tax aggressiveness. Profitability, however, significantly moderates the relationship between thin capitalization and tax aggressiveness. Meanwhile, company size and foreign ownership do not moderate the effect of thin capitalization on tax aggressiveness.
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