Pramajaya, Jumaily and Adam, Prof. Dr. Mohamad and Widiyanti, Hj. Marlina and Fuadah, Dr. Luk Luk (2019) The Effect of Debt Equity Ratio on Tax Planning Before and After Implementation of the Minister of Finance Regulation Number PMK-169/ PMK. 010/2015 on Registered Companies on the Indonesia Stock Exchange. International Journal of Management and Humanities, 3 (11). pp. 25-31. ISSN 23940913
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Abstract
Abstract: This study was conducted to analyze the effect of the debt-equity ratio (DER) on tax planning before and after the enactment of the Minister of Finance Regulation number PMK-169/PMK.010/2015. The data used in this study are financial reports submitted to the Indonesia Stock Exchange (IDX) for the period 2014-2017. Three hundred ninety companies were selected using a purposive sampling method with some requirements. The chosen samples are companies which have four finance reports in a row for the period, and those whose DER was more than zero (not negative) in 2014. The data used is cross-sectional panel data, using the data of liability and equity to measure capital structure, and earnings before tax (EBT) in which is the basis for imposing corporate income tax. The sample companies are divided into two groups to measure the impact of the regulation, namely groups of companies with DER above 4 and below 4. The results of the study show that the average DER of the company is 1.7 to 1.9, which means that only a few companies have DERs above 4:1 as specified in PMK-169. Furthermore, based on the results of the study it is known that both group of companies with DER above and below 4, the company’s DER does not affect EBT before and after the implementation of PMK-169. The study implies that the application of PMK-169 by using a debt limitation rule is still not effective in minimizing potential tax loss due to debt interest expense of capital structure.
Item Type: | Article |
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Subjects: | Eurolib Press > Social Sciences and Humanities |
Depositing User: | Managing Editor |
Date Deposited: | 29 Apr 2023 04:26 |
Last Modified: | 13 Jan 2024 04:11 |
URI: | http://info.submit4journal.com/id/eprint/1731 |