Proceedings of the 3rd International Conference on Administrative Science, Policy, and Governance Studies, ICAS-PGS 2019, October 30-31, Universitas Indonesia, Depok. Indonesia

Research Article

Indonesia Debt to Equity Ratio (DER) Policy of Listed Companies on International Taxation Best Practices

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  • @INPROCEEDINGS{10.4108/eai.30-10-2019.2299415,
        author={Maria R.U.D. Tambunan and Ginda  Togatorop and Sabila  Mareli},
        title={Indonesia Debt to Equity Ratio (DER) Policy of Listed Companies on International Taxation Best Practices},
        proceedings={Proceedings of the 3rd International Conference on Administrative Science, Policy, and Governance Studies, ICAS-PGS 2019, October 30-31, Universitas Indonesia, Depok. Indonesia},
        publisher={EAI},
        proceedings_a={ICAS-PGS},
        year={2020},
        month={8},
        keywords={debt-to-equity ratio arm’s length listed companies interest expenses related party},
        doi={10.4108/eai.30-10-2019.2299415}
    }
    
  • Maria R.U.D. Tambunan
    Ginda Togatorop
    Sabila Mareli
    Year: 2020
    Indonesia Debt to Equity Ratio (DER) Policy of Listed Companies on International Taxation Best Practices
    ICAS-PGS
    EAI
    DOI: 10.4108/eai.30-10-2019.2299415
Maria R.U.D. Tambunan1,*, Ginda Togatorop1, Sabila Mareli1
  • 1: Faculty of Administrative Science Universitas Indonesia
*Contact email: maria.tambunan@ui.ac.id

Abstract

The aims of this article are to examine whether Debt-to-Equity Ratio (DER) Policy in Indonesia has been fair on international tax best practices, to assess the practices of DER for listed companies in Indonesia Stock Exchange (ISE) and to identify the types of industries need to further review of their financing schemes that potentially would risk on their completion of tax obligation. This research occupies qualitative method. The data was gathered through literature review and documentation study. The research shows that the DER of listed companies in ISE for most of sectors are still below the Indonesia DER threshold, with mining industry close to the threshold. Indonesia DER is still moderate compare to other countries which adopt the similar approach. For further study, it needs to assess the non-listed companies whether the Indonesia threshold is still appropriate