Abstract
Multinational enterprises are alleged to shift profits from both developed and developing countries. However, empirical study that uses a developing countrys tax return data is almost none. This paper fills the gap by investigating whether foreign-owned Indonesian companies (FOICs) shift profits out of Indonesia by examining the impact of difference in statutory corporate tax rates (STR) between Indonesia and the source country of investment on taxable income reported by FOICs in their Indonesian tax returns. The results show that the lower the parents STR, the lower is the taxable income reported by FOICS, indicating that FOICs shift profits to parents located in low tax countries.
| Original language | English |
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| Pages (from-to) | 1pp |
| Journal | Accounting and Finance Association of Australia and New Zealand |
| Publication status | Published - 2016 |
| Event | Accounting and Finance Association of Australia and New Zealand Conference (AFAANZ 2016) - Gold Coast, Queensland, Australia Duration: 1 Jan 2016 → … |