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This research investigates the impact of multinational company characteristics on tax aggressive in Indonesia. Those characteristics are identified by the existence of foreign interests, represented by significant foreign ownership and foreign director; international activities, represented by international related party transaction and multinational operation; and thin capitalization. This quantitative research uses sample of 150 IDX listed companies starting from 2011-2015. This research uses panel data for data regression. This study finds that the existence of foreign director and international related party transactions increase tax aggressiveness, while the significant foreign ownership decrease the tax aggressiveness.

PurposeThe purpose of this paper is to examine the existence of income shifting using the practice of transfer pricing (TP), not only in sales but also in purchase and management service transactions, in Asian developing countries. The paper also investigates the role of the specific anti-avoidance rules (SAAR) in preventing TP practices in various types of transaction.Design/methodology/approachThe research employs panel data from a sample of 200 subsidiaries in ten countries over the period 2010–2014.FindingsDifferent results were obtained from previous research on developed countries, which found that TP practice was proven in sales transactions. This study finds no evidence for TP practices in sales transactions, but that they do take place in purchase, management service fee and management services revenue transactions. The study also finds evidence that SAAR reduces the practice of TP in sales transactions.Originality/valueThe research investigates TP practices, not only those related to sales, but also to purchases, management service fees and management service revenue to related parties. The sample comprises multinational subsidiaries located in Asian developing countries that have rarely been investigated in previous studies. This research examines the effect of SAAR in preventing TP practices in various types of transaction and develops scoring based on an instrument that integrates each SAAR rule/requirement.

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