DOES MANAGERIAL OWNERSHIP MODERATE FINANCIAL DISTRESS TO TAX AVOIDANCE

Based on theory, this study demonstrates that business owners have an interest in minimizing taxes. In the meanwhile, the government mandates that businesses pay their taxes. This produces a conflict of interest that may lead to businesses avoiding taxes. This study attempts to investigate the effect of financial distress on tax avoidance in property and real estate sector companies, moderated by managerial ownership. A total of 186 observational data points were analyzed using the Multiple Linear Regression approach in this associative study, which included 31 property and real estate businesses listed on the Indonesia Stock Exchange between 2018 and 2023. The Altman Z-Score is used to quantify financial distress, while CETR is used to proxy tax avoidance. The control variables that support both measures include firm size, leverage, and profitability. Based on the data analysis that has been conducted, financial distress does not have a significant impact on tax avoidance. However, financial distress moderated by managerial ownership has a significant positive effect on tax avoidance. This shows that managerial ownership plays a significant role in the tax avoidance behavior exhibited by the company.