The Influence of Debt Covenant, Tunneling Incentive, and Bonus Program on Tax Avoidance with Transfer Pricing as the Mediating Variable

Abstract

This research aims to examine and analyze the influence of debt covenant, tunneling incentive, and bonus program on tax avoidance, with transfer pricing as the mediating variable. This study employs explanatory research with a quantitative approach. The population of this study consists of non-cyclical consumer sector companies listed on the Indonesia Stock Exchange (BEI) from 2017 to 2021. The sample was selected using purposive sampling, with a total of 200 company data. The data analysis method includes multiple linear regression analysis and the Sobel test. The research results indicate that the bonus program has a positive effect on tax avoidance. However, debt covenant and tunneling incentive do not have a significant influence on tax avoidance. Transfer pricing can mediate the influence of debt covenant and bonus program on tax avoidance. On the other hand, transfer pricing cannot mediate the effect of tunneling incentive on tax avoidance.