Analysis of Financial Derivative Effects on Tax Avoidance in Non-Financial Companies Listed on The Indonesian Stock Exchange Market (BEI)

摘要

The purpose of this study is to analyze whether companies engaged in financial derivative transactions have higher tax avoidance levels and whether the fair value of financial derivatives affects the levels of tax avoidance. This study uses financial statements of non-financial companies listed in the Indonesian Stock Exchange Market (BEI) between 2011 and 2016. In this study, the tax avoidance is measured by three measurements of the effective tax rate (ETR), namely the ratio of income tax expense, current tax expense, and cash tax which is presented in the statement of cash flow. The results of this study indicate that it is not proven that companies engaged in financial derivative transactions have higher tax avoidance levels than companies that do not engage in financial derivative transactions. The results of this study also prove that the higher the fair value of financial derivatives, the higher the tax avoidance levels are.