The Influence of Income Shifting Incentives towards The Tax Haven Country Utilization: Case Study on the Companies listed in Indonesian Stock Exchange

Nurhidayati Nurhidayati, Hendyga Fuadillah


This study aims to determine the association between a series of income shifting incentives, including multinationality, transfer pricing aggressiveness, thin capitalization, intangible assets, and tax haven country utilization. This study is based on a sample of 78 multinational companies listed on the Indonesia Stock Exchange over 2012–2016 period (390 firm-year). The results prove that, multinationality, thin capitalization, intangible asset are positively associated with tax haven utilization, while transfer pricing aggressiveness is not positively associated with tax haven utilization. Based on the additional analysis, basic and chemicals sectors have the highest association between a series of income shifting incentives and tax haven utilization among other industrial sectors and each industry sector has different ways of utilizing tax haven country. The findings of this study are expected to provide input to the Directorate General of Taxes the importance of reviewing debt to equity ratio rule which turned out to be one gap for the taxpayer and in making the proposed inspection plan and the potential thematic exploration related to profit shifting incentives more focused on basic industry and chemicals sector. The Directorate General of Taxes also needs to raise awareness of the taxpayers of agriculture, mining, basic and chemicals, and trade, service and investment, which has a growing number of subsidiaries in tax haven country. Increased supervision of intangible assets transfers in the agriculture and infra­structure, utilities & transportation sectors also needs to be done.


Income shifting; tax haven; multinationality; transfer pricing; thin capitalization; intangible assets.

Full Text:



[1] Akamah, H., Hope, O.-K., & Thomas, W. B. 2014. Tax Havens and Disclosure Aggregation. Working Paper.

Ariyanti, Fiki. 2016. “2000 Perusahaan Asing Gelapkan Pajak Selama 10 Tahun”. Liputan 6. 2000-perusahaan-asing-gelapkan-pajak-selama-10-tahun (diakses tanggal 10 Maret 2017).

Baltagi, Badi H. 2005. Econometric Analysis of Panel Data Third Edition. England: John Wiley & Sons Ltd, The Atrium, Southern Gate.

Bernard, A.B., Jensen, J.B., Schott, P.K., 2006. Transfer Pricing by U.S.-Based Multinational Firms. NBER Working Paper 12493.

Bartelsman, E. and R. Beetsma (2003), Why pay more? Corporate tax avoidance through transfer pricing in OECD countries. Journal of Public Economics 87, 2225-2252.

Beuselinck, C., Buysschaert, A., & Deloof, M. 2005. Business groups, taxes and earnings management. Paper prepared for the European Accounting Association.

Blouin, J., Huizinga, H., Laeven, L., & Nicodeme, G. 2013. Thin capitalization rules and multinational firm capital structure. Working paper. Oxford, U.K.: Oxford University.

Brown, K. B. (2012). A Comparative Look at Regulation of Corporate Tax Avoidance. New York: Springer.

Chen, S., X. Chen, Q. Cheng, and T. Shevlin, 2010. Are family firms more tax aggressive than nonfamily firms? Journal of Financial Economics, 95(1): 41-61.

Coleman, N., & Bean, E. J. 2006. Tax Haven Abuses: the Enablers, the Tools and Secrecy Minority & Majority Staff Report Permanent Subcommittee. Office.

Darussalam, Danny Septriadi. 2008. Konsep dan Aplikasi Cross-Border Transfer Pricing untuk Tujuan Perpajakan. Jakarta: PT Dimensi Internasional Tax.

Darussalam, Danny Septriadi, dan B. Bawono Kristiaji. 2013. Transfer pricing: Ide, Strategi, dan Panduan Praktis dalam Perspektif Perpajakan Internasional. Jakarta: Danny Darussalam Tax Center.

Darussalam, Danny. 2009. “Tax Avoidance, Tax Planing, Tax Evasion, dan Anti Avoidance Rule”. ortax/?mod=issue&page=show&id=36&list=&q=&hlm=5(diakses tanggal 10 Maret 2017).

Department of the Treasury. 2007. Report to the congress on earnings stripping, transfer pricing and US income tax treaties. Washington, DC: Department of the Treasury (Available at: tax-policy/Documents/ajca2007.pdf).

Desai, M.A., Foley, C. F., & Hines, J.R. 2006a. The demand for tax haven operations. Journal of public Economics, 90, 513-531

Desai, M.A., Foley, C. F., & Hines, J.R. 2006b. Do Tax Haven Divert economic activity? Economics Letters, 90, 21-224

Desai, M., & Dharmapala, D. 2009. Earnings management, corporate tax shelters, and book-tax alignment. Harvard Business School Finance Working Paper, No. 884812 Cambridge, MA.

Dharmapala, D., & Hines, J. R. 2009. Which countries become tax havens? Journal of Public Economics, 93(9–10), 1058–1068.

Direktorat Jenderal Pajak. Laporan Tahunan Tahun 2015. Jakarta: Direktorat Jenderal Pajak

Direktorat Jenderal Pajak. Peraturan Direktur Jenderal Pajak Nomor PER-43/PJ/2010 jo PER-32/PJ/2011 tentang Penerapan Prinsip Kewajaran Dan Kelaziman Usaha Dalam Transaksi Antara Wajib Pajak Dengan Pihak Yang Mempunyai Hubungan Istimewa

Doggart, Caroline. 2002. Tax Haven and Their Uses. London: Economic Intelligence Unit.

Dyreng, S. D., Hanlon, M., & Maydew, E. L. 2008. Long‐Run Corporate Tax Avoidance. The Accounting Review, 83(1), 61–82.

Dyreng, S. D., & Lindsey, B. P. 2009. Using financial accounting data to examine the effect of foreign operations located in tax havens and other countries on U.S. multinational firms’ Tax rates. Journal of Accounting Research, 47(5), 1283–1316. 10.1111/j.1475-679X.2009.00346.x

Eden, L., & Smith, L. M. 2011. The ethics of transfer pricing. Working paper. College Station, TX: Texas A&M University.

Epstein, B. J., & Jermakowics, E. K. 2008. Wiley IFRS 2008: Interpretation and application of international financial reporting standards. Hoboken, NJ: John Wiley and Sons.

Field, Andy. 2009. Discovering Statistics Using SPSS Third Edition. London: Sage Puclication Ltd.

Erickson, M., Hanlon, M., & Maydew, E. L. 2004. How much will firms pay for earnings that do not exist? Evidence of taxes paid on allegedly fraudulent earnings. Accounting Review.

Feinschreiber, Robert. 2004. Transfer pricing Method. New Jersey: Wiley and Sons, Inc.

Frandyanto, Satria Agus. 2017. Pengaruh Instru-men Pengalihan Laba Terhadap Pemanfaatan Negara Lindung Pajak (Tax Haven Country). Tangerang Selatan: Politeknik Keuangan Negara-STAN.

Frank, M. M., Lynch, L. J., & Rego, S. O. 2009. Tax reporting aggressiveness and its relation to aggressive financial reporting. In Accounting Review, 84, pp. 467–496). http://

Ghozali, Imam dan Dwi Ratmono. 2013. Aplikasi analisis multivariate dan ekonometrika: teori, konsep dan aplikasi dengan Eviews8. Semarang: Badan Penerbit UNDIP.

Ghozali, Imam. 2016. Aplikasi analisis multi-variate dengan program IBM SPSS 23. Sema-rang: Badan Penerbit UNDIP.

Gravelle, J. G. 2009. Tax Havens: Internationnal Tax Avoidance and Evasion. National Tax Journal, 62(4), 727–753. 10.2307/41790645

Gravelle, J. G. 2013. Tax Havens : International Tax Avoidance and Evasion. Congressional Research Service Report for Congress (Available at: R40623.pdf).

Grubert, H., & Mutti, J. 1991. Taxes, Tarifs and Transfer Pricing in Multinational Corporate Decision Making. The Review of Economics and Statistics, 73(2), 285–293. http://doi. org/10.2307/2109519.

Grubert, H. 2003. Intangible income, inter-company transactions, income shifting and the choice of location. National Tax Journal, 56, 221–242

Gujarati, Damodar N. 2004. Basic econometrics (4th edition). New York: McGraw-Hill Companies.

Gujarati, Damondar N dan Dawn C Porter. 2012. Dasar-Dasar Ekonometrika. Jakarta: Salemba Empat.

Gunadi. 1994. Transfer Pricing Suatu Tujuan Akuntansi, Manajemen dan Pajak. Jakarta: PT Bima Rena Pariwara.

Hanlon, M. (2005). The persistence and pricing of earnings, accruals, and cash flows when firms have large booktax differences. The Accounting Review, 80(1), 137–166.

Harris, D., Morck, R., Slemrod, J., & Yeung, B. 1993. Income Shifting in U.S. Multinational Corporations. University of Chicago Press.

Hines, J. R., 1996. Tax policy and the activeties of multinational corporations. NBER Working Paper.

Hodge, Margareth. 2013. MPs Publish report on Google’s tax avoidance. Commite of Public Account. UK Parliament.

Hoffman, W. H. 1961. The theory of tax planning. The Accounting Review, 36(2), 274–281.

Indonesia Stock Exchange – Bursa Efek Indo-nesia. (diakses tanggal 10 Maret 2017).

Indonesia. Undang-Undang Pajak Penghasilan. Undang-undang No.7/1983 tentang Pajak Penghasilan sebagaimana telah beberapa kali diubah terakhir dengan Undang-Undang No.36/2008.

Indonesia. Undang-Undang Ketentuan Umum dan Tata Cara Perpajakan. Undang-Undang No. 16/2009 tentang Penetapan Peraturan Pemerintah Pengganti Undang-Undang Nomor 5 Tahun 2008 Tentang Perubahan Keempat Atas Undang-Undang Nomor 6 Tahun 1983 Tentang Ketentuan Umum Dan Tata Cara Perpajakan Menjadi Undang-Undang.

ICIJ. 2016. “Panama Papers Global Overview”. The International Consortium of Investigative Journalists. https://panamapapers. (diakses tanggal 10 Maret 2017).

Inilah Daftar Ribuan Nama Indonesia Di Panama Papers (Alphabetical Order). http:// alphabetical-order/ (diakses tanggal 10 Maret 2017).

Irnowo, Banon Keke, 2016. Analisis Kebutuhan Penerapan Transfer Pricing Risk Assessment di Indonesia. Skripsi. Tangerang Selatan: Politeknik Keuangan Negara-STAN

Jakarta Stock Industrial Classification (Jasica) Index. lampiran-08408141022.pdf (diakses tanggal 10 Maret 2017).

Kementerian Keuangan. Peraturan Menteri Keuangan Nomor PMK-169/PMK.010/2015 tentang Penentuan Besarnya Perbandingan Antara Utang Dan Modal Perusahaan Untuk Keperluan Penghitungan Pajak Penghasilan.

Kementerian Keuangan. Peraturan Menteri Keuangan Nomor PMK-213/PMK.003/2016 tentang Dokumen Hubungan Istimewa Terkait Transfer Pricing.

Keraf, Sonny. 1998. Etika Bisnis, Tututan dan relevansinya. Jogjakarta: Kanisius.

Kim, J. B., Li, Y., & Zhang, L. 2011. Corporate tax avoidance and stock price crash risk: Firm-level analysis. Journal of Financial Economics, 100, 639–662.

Klassen, Lang, & Wolfson. 1993. Geographic income shifting by multinational corporations in response to tax rate changes. Journal of Accounting Research, 31, 141-173

Klassen, K. J., & Laplante, S. K. 2012. The Effect of Foreign Reinvestment and Financial Reporting Incentives on Cross-Jurisdictional Income Shifting. Contemporary Accounting Research, 29(3), 928–955. 10.1111/ j.1911-3846.2011.01136.x

Lietz, Gerrit M. 2013. Determinants and Consequences of Corporate Tax Avoidance. Work-ing Paper University of Münster. http://dx.doi. org/10.2139/ssrn.2363868.

Modigliani, F., & Miller, M. 1963. Corporate Income Taxes and the Cost of Capital: A Correction. American Economic Review, 53, 443-443.

Nachrowi, Nachrowi Djalal dan Hardius Usman. 2006. Pendekatan populer dan praktis ekonometrika untuk analisis ekonomi dan keuangan. Jakarta: Lembaga Penerbit FEUI.

Newberry, K.Y., Dhaliwal, D.S., 2001. Cross jurisdictional income shifting by U.S. multi-nationals: evidence from international bond offerings. Journal of Accounting Research 39(3), 643–662.

OECD. 2012. Dealing Effectively with the Challenges of Transfer pricing, Paris: OECD Publishing.

OECD. 2013. Public Consultation: Draft Handbook on Transfer pricing Risk Assessment. Paris: OECD Publishing

OECD. 2013. Public Consultation White Paper on Transfer pricing Documentation. Paris: OECD Publishing

OECD. 2006. The OECDs Project on Harmful Tax Practices: 2006 Update on Progress in Member Countries. Washington DC: OECD.

OECD.2009. Countering Offshore Tax Evasion. Washington DC: OECD

Omar, N., & Zolkaflil, S. 2015. Profit Shifting and Earnings Management through Tax Haven Subsidiaries: An Exploratory Analysis of Multinational Companies. Procedia Economics and Finance, 28(April), 53–58. http://doi. org/10.1016/S2212-5671(15)01081-3

Rego, S. O. 2003. Tax-Avoidance Activities of U.S. Multinational Corporations. Contemporary Accounting Research, 20(4), 805–833.

Richardson, G., Hanlon, D., Nethercott, L., 1998. Thin capitalization: an Anglo-American comparison. The International Tax Journal 24(2), 36–66.

Richardson, G., Taylor, G., & Lanis, R., 2013. Determinants of Transfer Pricing Aggressiveness, Journal of Contemporary Accounting & Economics 9, 136–150.

Richardson, G., and Taylor, G. 2015. Income Shifting Incentives and Tax Haven Utilization: Evidence from Multinational U.S. Firms. International Journal of Accounting, 50(4), 458–485. 2015.10.001

Rohatgi, Roy. 2007. Basic International Taxation: vol. Two: Practice. Taxmann.

Sekaran, Uma. 2006. Metodologi Penelitian untuk Bisnis: Buku 1. Jakarta: Salemba Empat.

_________. 2006. Metodologi Penelitian untuk Bisnis: Buku 2. Jakarta: Salemba Empat.

Shevlin, T. 2007. The Future of Tax Research: From an Accounting Professor’s Perspective. The Journal of the American Taxation Association, 29(2), 87–93.

Slamet, Indrayagus. 2007. Tax Planning, Tax Avoidance, dan Tax Evasion di Mata Perpajakan Indonesia. Inside Tax Edisi September. Hal 8

Slemrod, J., 2001. A general model of the behaviour response to taxation. International Tax and Public Finance 8(2), 119–128.

Statistik Keuangan Indonesia. Bank Indonesia. Default.aspx (diakses tanggal 10 Maret 2017).

Stewart, J.C., 1977. Multinational companies and transfer pricing. Journal of Business Finance and Accounting, 4(3), 353–371.

Suandy, Erly. 2008. Perencanaan Pajak. (Edisi ke-4). Jakarta: Salemba Empat.

Sugiyono. 2010. Metode Penelitian Kuantitatif, kualitatif dan R & D. Bandung: Alfabeta.

Sugiyono. 2014. Metode Penelitian Bisnis. Ban-dung: Alfabeta.

Sugiyono. 2016. Metode Penelitian Kuantitatif, kualitatif dan R & D. Bandung: Alfabeta.

Taylor, G., &. Richardson, G., &. 2013. The determinants of thiny capitalized tax avoidance structures: Evidence from Australian firms. International Journal of Accounting, Auditing and Taxation 22(2013), 12–25.

Taylor, G., Richardson, G., & Taplin, R., 2014. Determinants of tax haven utilization: evidence from Australian Firm. Journal of Account-ing and Finance. doi: 10.1111/acfi. 12064.

Tim Dosen Ekonometrika. 2015. Buku Pedoman Praktikum Ekonometrika. Malang: Universitas Brawijaya.

United Nations. 2013. Practical Manual on Transfer Pricing for Developing Countries. New York: United Nations.

Usmen, Nilufer. 2012. Transfer Prices: A Financial Perspective. Journal of International Financial Management & Accounting 23(1). DOI: 10.1111/j.1467-646X.2011.01052.x

Webber, S. 2010. Thin capitalization and interest deduction regulations. Copenhagen research group on international taxation. Corit discussion paper, No. 8, (Available from: 2011/12/CORIT-8-Thin-Capitalization-and-Earnings-Stripping-Regulations-2-1.pdf).

Wilkie, P., 1988. Corporate average effective tax rates and inferences about relative tax preferences. Journal of the American Taxation Association 10 (2), 75–88.

Winarno, Wing Wahyu. 2015. Analisis Eko-nometrika dan Statistika dengan Eviews. Buku Edisi 4. Yogyajkarta: UPP STIM YKPN.

Widarjono, Agus. 2013. Ekonometrika: Pengantar dan Aplikasinya. Yogyakarta: Ekonisia FE UII.

Widarjono, Agus. 2010. Analisis Multivariat Terapan Dengan Program SPSS, AMOS, dan SMARTPLS. Yogyakarta: UPP STIM YKPN.

Yamin, Sofyan dan Heri Kurniawan. 2014. SPSS Complete: Teknik Analisis Statistik Terlengkap SPSS (Edisi 2). Jakarta: Salemba Empat.


The Journal is published by The Institute of Research & Community Outreach - Petra Christian University. It available online supported by Directorate General of Higher Education - Ministry of National Education - Republic of Indonesia.

©All right reserved 2016.Jurnal Akuntansi dan Keuangan, ISSN: 1411-0288, e-ISSN: 2338-8137

click tracking
View My Stats