The Role of Corporate Governance in Financial Derivative Utilization for Corporate Tax Avoidance: Evidence from an Emerging Market

摘要

This research aims to analyze the role of financial derivatives utilization in corporate tax avoidance, and the moderating role of good corporate governance implementation on this relationship. Using data for non-financial companies listed in the Indonesian Stock Exchange for the period 2012-2014, this research classifies a derivative user as either speculator or effective hedger. The results show that speculator companies exhibit more aggressive tax avoidance than effective hedgers. This research also analyzes the impact of good corporate governance implementation on the relationship between derivatives utilization and corporate tax avoidance levels. The results show that good corporate governance implementation does not significantly reduce the tax avoidance gap between speculator and effective hedger companies.