| Abstrak |
This study aims to evaluate the influence of transfer pricing and profitability on tax avoidance in industrial sector companies listed on the Indonesia Stock Exchange (IDX) during the period 2019-2023. The analytical methods employed include descriptive statistical analysis, classical assumption tests, multiple linear regression analysis, t-tests, and the determination coefficient test using SPSS software with a 5% significance level. The sample used in this study consists of 139 observations. The results indicate that transfer pricing has a significant effect on tax avoidance, while profitability does not have a significant impact on tax avoidance. These findings suggest that companies tend to use transfer pricing strategies to minimize tax burdens and increase after-tax profits. Conversely, changes in profitability levels cannot be considered a reliable indicator to predict changes in corporate tax avoidance behavior. Thus, this study highlights the importance of transfer pricing as a key factor in corporate tax avoidance strategies, while profitability does not show a significant relationship with tax avoidance. These findings contribute to the literature on tax avoidance and can serve as a reference for policymakers in understanding the dynamics of tax avoidance in the industrial sector.
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