WHO NEEDS ETHICS? THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON TAX AGGRESSIVENESS

• Main Author: Rosaria, Anita
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38974
• Institution: Institut Teknologi Bandung

This study examines the effects of corporate social responsibilities (CSR) as ethical commitment measurement on tax avoidance through transfer pricing aggressiveness. We examine 439 listed firms in Indonesia (excluding financial and insurance institutions) from 2008 to 2015. This is the first study, to our knowledge, to empirically relate tax avoidance, transfer pricing aggressiveness, and CSR. We find that the CSR negatively affects the tax avoidance and also negatively affects transfer pricing aggressiveness. Moreover, CSR is negatively associated with tax avoidance in high advertising expense portfolio. Our study suggests that CSR should be considered as an important variable for defining firms’ ethical commitment. This study is expected to bring the new idea in analyzing tax aggressiveness issues and to provide the determinants of tax avoidance and transfer pricing aggressiveness in Indonesia that hopefully can be useful for government, corporation, and tax consultant. Keywords: corporate social responsibility; tax avoidance; transfer pricing; Indonesia