Capital Intensity, Thin Capitalization, and Accounting Conservatism Effects on Tax Avoidance with Institutional Ownership as Moderator

Abstract

Concerns surrounding tax avoidance persist because the practice can erode government tax receipts and, in turn, affect the resources available for sustainable economic development. This research investigates whether capital intensity, thin capitalization, and accounting conservatism are associated with tax avoidance and whether institutional ownership changes those relationships. The analysis covers infrastructure firms listed on the Indonesia Stock Exchange for the 2020–2024 period. The study responds to mixed results in earlier research and to the limited evidence on the moderating function of institutional ownership within Indonesian infrastructure companies. A quantitative approach was applied to secondary information obtained from annual reports and financial statements. Purposive sampling produced 161 firm-year observations. The hypotheses were examined using multiple linear regression and Moderated Regression Analysis (MRA) in IBM SPSS Statistics. The findings show a negative effect of capital intensity on tax avoidance and a positive effect of thin capitalization, whereas accounting conservatism has no significant effect. Institutional ownership strengthens the effect of capital intensity, but weakens the effects of thin capitalization and accounting conservatism on tax avoidance. These results underline the relevance of institutional oversight for corporate tax governance and compliance.