The Effect of Transfer Pricing, Profitability, and Fixed Asset Intensity on Tax Aggressiveness with Audit Committee as Moderating Variable

This study aims to analyze the effect of transfer pricing, profitability, and fixed asset intensity on tax aggressiveness with the audit committee as a moderating variable. The object of this research is consumer cyclicals and consumer non-cyclicals sector companies listed on the Indonesia Stock Exchange (IDX) during a certain period. The method used was a quantitative approach with moderated regression analysis (MRA). The data used were annual financial statements selected through the purposive sampling method. Transfer pricing, profitability, as measured by Return on Assets (ROA), and fixed asset intensity, are independent variables, while tax aggressiveness is measured using Effective Tax Rate (ETR). The audit committee is tested as a moderating variable to see its effect in strengthening or weakening the relationship between the independent variable and the dependent variable. The results showed that transfer pricing and profitability have a significant effect on tax aggressiveness, while fixed asset intensity does not have a significant effect. The audit committee is proven to moderate the relationship between transfer pricing and tax aggressiveness but is unable to moderate the effect of profitability and fixed asset intensity on tax aggressiveness. These findings contribute to the financial management and corporate governance literature, particularly in understanding the dynamics of tax management in related sectors. This study also offers practical implications for companies to pay more attention to the role of the audit committee in improving the supervision of transfer pricing practices to reduce excessive tax aggressiveness.