Track: Operations Management

Abstract

Tax avoidance is an effort to minimize the tax paid to remain within the frame of taxation provisions—methods and techniques performed by exploiting weaknesses in tax laws and regulations. Thin capitalization, profitability, and operating cash flow have opportunities to conduct tax avoidance practices to minimize the tax burden that companies should pay. The purpose of this study was to test and obtain empirical evidence of the influence of independent variables on dependent variables in food and beverage sub-sector manufacturing companies listed on the Indonesia stock exchange in 2015-2019. This quantitative analysis uses purposive sampling techniques with a total of nine samples of food and beverage sub-sector manufacturing companies listed in IDX. The results showed that based on the results of thin capitalization testing does not affect tax avoidance. Profitability affects tax avoidance. Operating Cash Flow affects tax avoidance. The results of this study are expected to be used as a reference to the performance of companies, especially food and beverage sub-sector companies, to be more careful in making decisions on tax avoidance practices that will impact the company's reputation.