The evolution of tax strategies in multinational companies: a historical perspective

Increasing globalization and complexity of the tax environment demands in-depth research into tax coverage, tax risks and tax avoidance in multinational companies. This research explains the complex dynamics between these variables with a focus on multinational companies listed on the Indonesia Stock Exchange during 2009–2022. A sample of 714 observations was used to explore the relationship between tax disclosure, tax risk and tax avoidance. Statistical analysis shows that tax disclosure has a negative effect on tax avoidance. This shows that the more transparent a company is in disclosing its tax information, the less the company is involved in tax avoidance. On the other hand, tax risk has a positive effect on tax avoidance, meaning that when a company faces higher tax risk, the company tends to increase its tax avoidance efforts. In particular, this study reveals that tax disclosure also plays a moderating role, weakening the positive influence of tax risk on tax avoidance. Although tax risks can encourage companies to avoid taxes, the level of tax dispersion can reduce this positive impact. The practical relevance of this research provides valuable guidance for tax practitioners, regulators and decision makers in developing more effective tax policies. The results of this research highlight the importance of transparency in reducing tax avoidance practices, while providing insight into how tax risk and tax spread can be managed more efficiently. The academic contribution of this research lies in the development of multinational company taxation literature. By providing a deeper understanding of the relationships between variables, this research provides a foundation for further research in understanding the dynamics of global taxation. In conclusion, this research not only reflects its practical urgency, but also enriches the understanding of multinational corporate taxation in a global context.