The Role of Profitability, Company Size, Corporate Social Responsibility, and Inventory Intensity on Potential Tax Avoidance

Abstract

Tax avoidance is an action to minimize the tax burden with efforts by taxpayers that do not violate applicable laws. Tax avoidance in this research is measured using the formula statutory rate of tax – effective tax rate. Profitability is measured using Return on Assets (ROA), company size is measured by Ln Total Assets, corporate social responsibility uses the GRI-Standards measurement, Inventory intensity uses the measurement of total inventory divided by total assets. The research objective to be achieved in this research is to provide understanding and knowledge to the public, especially the government, management, investors and creditors regarding the role of profitability, company size, corporate social responsibility, and inventory intensity on potential tax avoidance and can be used as a reference for future researchers as well as reference for stakeholders (management, investors, creditors and government) in making relevant and reliable decisions. This research uses manufacturing companies in the consumer goods sector with the research year 2018-2022 which are listed on the Indonesia Stock Exchange as research objects. The total sample was 105 samples using the purposive sampling method. The data analysis techniques used are Descriptive Statistical Analysis, Classical Assumption Test, Hypothesis Test, and Linear Regression Test. Based on the analysis results, it was found that profitability has a positive effect on tax avoidance. Meanwhile, company size, corporate social responsibility and inventory intensity have no effect on tax avoidance.