Abstract:

This research aims to determine the correlation of foreign investor interest on tax avoidance. The interests of foreign investors are measured by three aspects, there are the percentage of shares ownership by foreign investors, substantial shareholdings by foreign investors, and  the percentage of foreign directors on the board of directors. The companies sampled in this study are 56 companies listed on the IDX during the period 2011 to 2015. Tax avoidance measurements use four methods: Accounting ETR, Long run cash ETR, Tax Expense to Operating Cash Flow, and Cash Tax Paid to Operating Cash Flow . Based on the results of this research, the percentage of share ownership by foreign investors, substantial shareholdings by  foreign ownership, and percentage of foreign directors on the board of directors have no significantly correlated with tax avoidance.