Drivers of Transfer Pricing Decisions in Strategic Industries: An Empirical Analysis of the Iron and Steel Sector in Indonesia

Jennie Khoirunnisa; Mohamad Khoiru Rusydi

doi:10.55681/economina.v5i9.4339

Authors

Jennie Khoirunnisa Universitas Brawijaya, Indonesia
Mohamad Khoiru Rusydi Universitas Brawijaya, Indonesia

DOI:

https://doi.org/10.55681/economina.v5i9.4339

Keywords:

Tax burden, Exchange rate, Tunneling Incentive, Bonus Mechanism, Ransfer Pricing

Abstract

This study aims to analyze the effects of tax burden, exchange rates, tunneling incentives, and bonus mechanisms on transfer pricing decisions in manufacturing companies in the iron and steel subsector listed on the Indonesia Stock Exchange (IDX) during the 2019–2024 period. This study employs a quantitative approach using secondary data obtained from companies’ annual reports and analyzed via panel data regression. The research sample was selected using purposive sampling, yielding 30 data points from 5 companies that met the study criteria. The results indicate that the exchange rate influences transfer pricing. Transfer pricing decisions are influenced not only by internal company factors but also by external economic conditions, particularly the exchange rate. Additionally, companies tend to consider operational stability and business risk when determining transaction policies with related parties

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