The Effect of Transfer Pricing Aggressiveness and Thin Capitalization on Tax Avoidance

Tax avoidance is a company's effort to find loopholes in tax rules and regulations so that the amount of tax paid is lower. In practice, companies can use transfer pricing and thin capitalization options as an effort to reduce the tax burden. The purpose of this study is to analyze the effect of transfer pricing and thin capitalization on tax avoidance. Tax avoidance as the dependent variable, transfer pricing and thin capitalization as independent variables. The population used in this study are all consumer cyclicals companies listed on the IDX for the 2017-2019 period. The sample in this study were 32 companies from the total123 consumer cyclicals companies. The sampling technique was selected by purposive sampling method. The data source used is secondary data. Data were analyzed using multiple linear regression analysis with the help of SPSS version26.The results of this study indicate that thin capitalization has an effect on tax avoidance while transfer pricing has no effect on tax avoidance.