The Effects of Profitability, Leverage, and Company Sizeon Tax Aggressiveness

Abstract

This study aims to analyze the effects of profitability, leverage, and firm size on tax aggressiveness among LQ45 companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2025. This study employs a quantitative method using secondary data obtained from the companies’ financial statements. The sampling technique used purposive sampling, resulting in a sample of 14 companies with a total of 84 observations. Profitability was measured using Return on Assets (ROA), leverage using the Debt-to-Assets Ratio (DAR), company size using the natural logarithm of total assets, while tax aggressiveness was proxied by the Effective Tax Rate (ETR). Data analysis was conducted using multiple linear regression. The results indicate that profitability and leverage do not have a significant effect on tax aggressiveness. Conversely, firm size has a significant effect on tax aggressiveness. Simultaneously, profitability, leverage, and firm size have a significant effect on tax aggressiveness among LQ45 companies listed on the Indonesia Stock Exchange for the period 2020–2025.