THE ANALYSIS OF CORPORATE TAX AVOIDANCE: SMALL AND LARGE TRADE, SERVICE, AND INVESTMENT COMPANIES IN INDONESIA

Abstract

Compared to other South East Asia countries, the Indonesian tax ratio is still low. Several causes are an increase in the potential of tax evasion and aggressive tax avoidance. This research is done to analyze whether tax avoidance influenced by advertising expenses and corporate governance. Using secondary data, the researcher observes the relationship under two conditions, small and large trade, service, and investment companies that are listed in the Indonesian Stock Exchange during 2014 – 2018. The result shows that advertising expenses have a significant influence on tax avoidance on large companies. While on small companies, there is no major influence between advertising expenses towards tax avoidance. Besides, this research also found no significant effect between corporate governance and tax avoidance, both on small and large companies. Hopefully, in the future, the next researcher will observe the relationship with a larger sample and in a longer period in order to obtain more accurate result.