The Determinants of Transfer Pricing Intensity of Multinational Non-Financial Firms in Indonesia


  • Yulis Sarah Rizkya Universitas Airlangga. Indonesia
  • Isnalita Universitas Airlangga. Indonesia


Transfer Pricing, Tax Income, Profitability, Firm Size, Intangible Assets


This study examined the determinants of the intensity of transfer pricing practices engaged by a pool of selected firms. Data gathered from non-financial multinational enterprises (MNEs) listed on the Indonesia Stock Exchange (IDX) from 2014 to 2017, which involved 60 firm-year observations. Data analyzed using ordinary least square regression analysis via SPSS 22 software. The study outcomes revealed that income tax, profitability, and firm size were not significantly related to the intensity of transfer pricing. In contrast, intangible assets displayed a significantly positive effect on transfer pricing. This study offers several implications for the government, investors or creditors, and financial analysts that clear and straightforward policies are integral in determining the prices of intangible assets, mainly because the transfer pricing activities carried out by non-financial MNEs in Indonesia were largely based on intangible assets. Study limitations and future research endeavors end this paper.