Environmental Uncertainty in The Effect of Transfer Pricing on Tax Avoidance

One of the tax avoidance schemes undertaken by companies, especially multinational companies, is transfer pricing. Transfer pricing decisions in tax avoidance can depend on environmental uncertainty. This research analyzes the effect of transfer pricing on tax avoidance and environmental uncertainty as moderating variables in multinational companies. Secondary data from annual reports or financial statements are used as sample data. The sample used is 195 from 39 firms that appropriate the criteria of 113 companies on the Indonesia Stock Exchange (BEI) during 2018-2022 in the non-cyclical consumer sector. The analysis of this research is a regression with a moderating variable. We argue that transfer pricing is undertaken to tax avoidance practices and the decision to avoid tax by transfer pricing is influenced by environmental uncertainty. This study's results show that transfer pricing affects tax avoidance positively. In addition, environmental uncertainty can moderate that influence. The value of transfer pricing is linearly related to the value of tax avoidance. That value is strengthened by environmental uncertainty.