Tax Avoidance, How to Measure and Factors Affecting it

The purpose of this study is to review the theoretical foundations of tax avoidance, tax avoidance methods by companies, how to calculate, the factors and consequences of tax avoidance. Tax avoidance is a kind of legal gaps in the tax laws to reduce income taxes that can be transmitted through a region with low taxation and transfer pricing to be done. Tax avoidance can be measured through various methods such as tax effective rates and tax differences. The results of this study suggest that managers are great value for the income tax and financial strategies, ie, strategies that reduce tax expenses in the financial statements and tax strategies that reduce cash taxes, ie, a strategy that makes a difference in the payment of income tax. Therefore, most companies seek to reduce taxes and thus tax avoidance within the legal framework of the existing gaps in laws.