The influence of tax and tunneling incentive on transfer pricing decisions in basic industrial and chemical sector companiesand trade, service and investment sector companies listed on the Indonesian stock exchange (IDX)

Transfer pricing is the determination of prices when a company deals with affiliated companies, but transfer pricing is often misused by companies by manipulating the transfer prices as a form of tax avoidance by lowering or increasing the price of product transfers. Another practice of transfer pricing is tunneling incentive in which the companies transferthe assets and profits out of them by manipulating the prices and setting the unreasonable market prices for the personal benefit of the majority shareholders and the burden is borne by the minority shareholders. The purpose of this study was to determine whether taxation and tunneling incentive influencedthe transfer pricing decisions. The population of this research was the companies in the Basic Industrial and Chemical Sector and the Trade, Service and Investment Sector listed on the Indonesia Stock Exchange (IDX) for the period of 2015-2020 and the determination of the sample used a purposive sampling method where the sample was determined with certain criteria. The data analysis method of this research was the statistical method of multiple linear regression analysis by using the IBM Statistical Package for Social Sciences (SPSS) of 26 analysis tool program. Based on this study, there were 247 companies other than 30 companies met as the sample criteria. According to the research results, known that the tax amount had a significant value of 0.044<0.05 and the result of the t-test was 2.025>1.97346, which meant that the tax amount had a positive influence on the transfer pricing. The significant value of tunneling incentive was 0,000<0.05 and the result of the t-test was 4.217>1.97346 which meant that tunneling incentive had a positive influence on the transfer pricing. Based on the result of the F test, it was known that a significant value of 0,000<0.05 and F test value of 11,027>3.05, which meant that the tax amount and tunneling incentive simultaneously had a positive influence on the transfer pricing. And the result of the coefficient determination showed that the taxation and tunneling incentive influencedthe transfer pricing by 11.4% and the rest was influenced by other variables.