The Effect of Foreign Ownership and Managerial Ownership on Transfer Pricing with Audit Committee Moderation

Abstract

According to the OECD Mutual Agreement Procedure 2023, 2,601 global transfer pricing cases, with Indonesia facing potential tax losses of approximately IDR 44 trillion. The Ministry of Finance (2023) emphasized that these cases continue to increase. Company ownership structure, including foreign and managerial ownership, influences transfer pricing, and governance should ensure this policy complies with regulations. Audit committees are considered capable of overseeing this influence. This study aims to examine the influence of foreign and managerial ownership on transfer pricing, with the audit committee as a moderating variable. The quantitative approach uses secondary data from reports on the Indonesia Stock Exchange during 2021–2024. The sample used purposive sampling, and the analysis utilized multiple regression and moderated regression (MRA). The results indicate that foreign and managerial ownership have significant negative effect, while the audit committee strengthens the influence of managerial ownership but does not moderate the effect of foreign ownership.