The Effect of Owner Characteristics and Thin Capitalization on Tax Avoidance with Firm Value as a Mediator

Muhammad Aufa Alhaq

Abstract


This study aims to analyze the effect of owner characteristics and thin capitalization on tax avoidance with firm value as a mediating variable. Tax avoidance is a strategy commonly used by companies to minimize their tax burden, but such practices may be influenced by ownership characteristics and corporate financing policies. Owner characteristics are assumed to affect managerial decisions, including corporate tax strategies. Meanwhile, thin capitalization, which reflects the proportion of debt relative to equity, can provide tax benefits through interest expense deductions that reduce taxable income. This research employs a quantitative approach using secondary data obtained from the financial statements of companies listed on the Indonesia Stock Exchange (IDX). The data analysis technique used in this study is panel data regression analysis to examine the relationship between variables, along with mediation testing to determine the role of firm value in mediating the relationship between owner characteristics, thin capitalization, and tax avoidance. The findings of this research are expected to provide empirical evidence regarding the influence of ownership characteristics and thin capitalization on corporate tax avoidance practices, as well as the mediating role of firm value. This study is expected to contribute to the development of financial management and taxation literature and provide insights for investors, corporate management, and policymakers in understanding tax avoidance behavior.


Keywords


Firm Value; Owner Characteristics; Tax Avoidance; Thin Capitalization.

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References


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DOI: http://dx.doi.org/10.30659/jrbi.v23i2.52884

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