The Effect of Book Tax Difference, Foreign Ownership and Transfer Pricing on Tax Avoidance with Profit Management as Moderating Variables


  • Binar Shabika Brawijaya University
  • Bambang Hariadi Brawijaya University
  • Zaki Baridwan Brawijaya University


book-tax difference, foreign ownership, transfer pricing, tax avoidance, earnings management


Purpose The main objective of this research is to test which is to find out the effect of the book-tax difference, on the other hand, foreign ownership and transfer pricing that is adjusted for tax avoidance, which focuses on the level of profit management which is positioned as an aspect of the moderating variable.

Design/methodology/approach This study focuses on secondary data in the form of samples from several companies engaged in manufacturing where these companies have been listed on the Indonesia Stock Exchange in the period from 2016 to 2019. The companies that were sampled in this study amounted to 31 companies for 4 years. which is used as a purposive sampling method. The form of data analysis used leads to the Partial Least Square (PLS) method where it is necessary to use SmartPLS version 3. software.

Findings From the results of the study, it is found that book-tax difference and transfer pricing have an important influence in avoiding a tax. However, the level of foreign ownership has no effect on the level of tax avoidance. The results of the research in the aspect of profit management variables were able to be moderated regarding the relationship between book-tax difference and transfer pricing on tax avoidance, but unable to relate to the relationship between foreign ownership and tax avoidance practices.

Paper type Quantitative


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How to Cite

Shabika, B., Hariadi, B., & Baridwan, Z. (2023). The Effect of Book Tax Difference, Foreign Ownership and Transfer Pricing on Tax Avoidance with Profit Management as Moderating Variables. The International Journal of Accounting and Business Society, 31(1), 59–70. Retrieved from

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