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Effect of Related Party Transaction and Tax Haven Utilization on Tax Avoidance Moderated by Country-by-country Reporting
Cesar Samuel Romulo1, Zuliani Dalimunthe2

1Cesar Samuel Romulo, Department Management, University of Indonesia, Central Jakarta, Indonesia.

2Zuliani Dalimunthe, Department Management, University of Indonesia, Central Jakarta, Indonesia. 

Manuscript received on 17 July 2023| Revised Manuscript received on 24 July 2023 | Manuscript Accepted on 15 November 2023 | Manuscript published on 30 November 2023 | PP: 91-100 | Volume-3 Issue-2, November 2023 | Retrieval Number: 100.1/ijef.B2551113223 | DOI : 10.54105/ijef.B2551.03021123

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© The Authors. Published by Lattice Science Publication (LSP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Abstract: In 2016, the Government of Indonesia introduced Country-by-Country Reporting through the Minister of Finance Regulation as an implementation of OECD/G20 BEPS Action Plan 13. This study investigates the influence of Related Party Transaction and Tax Haven Utilization on Tax Avoidance with and without Country-by-Country Reporting regulation as the moderating variable. This study employs a purposive sampling method for selecting the sample. Data in this study is collected from the financial statements of the 100 listed MNEs between 2012 and 2021. To test the hypothesis, this study uses pooled OLS regression. The results of this research were Tax Haven Utilization doesn’t have significant effects on Tax Avoidance and Related Party Transaction from Sales have positive and significant impact on Tax Avoidance, meanwhile Related Party Transaction from Assets and Liabilities doesn’t have substantial effect on Tax Avoidance. Other results show that Country-byCountry Reporting regulation can not moderate the impact of Related Party Transaction and Tax Haven Utilization on Tax Avoidance. The findings of this study provide recommendations for the government to evaluate the application of CbCR regulations in preventing tax evasion through the mechanisms of utilising tax havens and related party transactions, and to enhance the theoretical understanding of the application of CBCR.

Keywords: Related Party Transaction, Tax Haven Utilization, Tax Avoidance, Country-by-Country Reporting.
Scope of the Article: Accounting