Corporate Sustainable Performance on Tax Aggressiveness: Independent Commissioners and Thin Capitalization as an Antecedents

Abstract

The research objective is to build a model of tax aggressiveness as a form of corporate sustainable performance: independent commissioners and thin capitalization as antecedents. The study conducted empirical testing of corporate sustainable performance can increase tax aggressiveness. In addition, the study conducted empirical testing of the effect of independent commissioners and thin capitalization on tax aggressiveness and corporate sustainable performance. Data uses secondary data from the annual reports of manufacturing companies listed on the Indonesia Stock Exchange from 2022 to 2024. The sample selection used is based on research criteria. The test used is path analysis. The results provide empirical evidence that corporate sustainable performance increases tax aggressiveness. Businesses that continue to perform sustainably typically engage in tax aggressiveness. Independent commissioners have no effect on tax aggressiveness and corporate sustainable performance. Meanwhile, thin capitalization mitigates tax aggressiveness and corporate sustainable performance. In addition, research provides empirical evidence that thin capitalization directly or indirectly through corporate sustainable performance can mitigate tax aggressiveness. Thin capitalization as a form of supervision from creditors can pressure management not to carry out tax aggressiveness. With debt greater than equity, creditors ensure that management can pay interest expense and pay off debt. The corporation will receive tax benefits as a result of interest expense, which will reduce opportunistic tax aggressiveness.