Open AccessThe Effects of Taxation toward Decision of Transfer Pricing on Multi-National Companies in Indonesia
Author(s) -
Hendro Lukman
Publication year - 2021
Publication title -
psychology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.112
H-Index - 10
ISSN - 0033-3077
DOI - 10.17762/pae.v58i1.768
Subject(s) - transfer pricing , multinational corporation , moderation , tariff , production (economics) , business , order (exchange) , supply chain , industrial organization , public economics , economics , international economics , microeconomics , finance , international trade , marketing , psychology , social psychology
In globalization today, business is no longer limited by distance, time, and place. In order to maintain growth, multinational companies need to do production efficiency by developing international supply chain. Therefore, companies conduct inhouse production or in other countries that can produce products at cheaper prices than producing in origin country so that they can divert profits or optimize tax benefits. The purpose of this study is to determine the effects of tax rates and tax regulations on ethical behavior as a moderation of transfer pricing decisions carried out by multi-national companies in Indonesia. From 30 multi-national companies in Indonesia used as samples that were processed using Partial Least Square, shows that tax regulations have no negative effect to the management in making the decision of transfer pricing, but tariff and ethics have affect positively, as well as when the tax rule and tax tariff are mediated by ethics.