Open AccessCorporate Risk, Cost Shifting, and Tax Avoidance
Author(s) -
Irmawati Wijaya,
Enny Prayogo,
Rini Handayani,
Ivan Prihartono
Publication year - 2021
Publication title -
jurnal akuntansi/jurnal akuntansi
Language(s) - English
Resource type - Journals
eISSN - 2598-4977
pISSN - 2085-8698
DOI - 10.28932/jam.v13i2.3553
Subject(s) - tax avoidance , business , corporate tax , stock exchange , payment , accounting , audit , tax revenue , finance , double taxation , public economics , economics
Abstract
This study aims to investigate relationship between corporate risk, cost shifting, and tax avoidance. Using 50 companies of all manufacturing companies listed in Indonesian Stock Exchange, we try to investigate a corporate risk, cost shifting and tax avoidance in annual report audited over long time periods (5 years) sequentially. Then, we test the relationship between corporate risk and cost shifting to tax avoidance that reduced the firm’s income tax payments. This study provides evidence that companies with high risk are more likely to do tax avoidance and companies that have a good strategy in allocating their costs are driven by the behavior of minimazing tax payments. We also find that the higher of corporate risk will increase corporate tax payment to Internal Revenue Services.
Keywords: Corporate Risk, Cost Shifting, and Tax Avoidance