Influences on Transfer Pricing Decisions: The Roles of Tunneling Incentives, Debt Covenants, and Bonus Mechanisms with Tax Minimization as a Moderator

Managing transfer pricing in multinational corporations has become a central issue in the scope of global tax policy. This research aims to detail the factors influencing transfer pricing decisions, focusing on the influence of tunneling incentive, debt covenant, and bonus mechanism. Tax minimization will be used as a moderating variable that enriches understanding in research on the dynamics of transfer pricing policies in multinational manufacturing companies. With a sample of 23 multinational companies listed on the IDX and 115 data from observed financial reports, it was analyzed using SPSS version 25 with multiple regression methods and interaction tests. The findings or research results indicate that tunneling incentive and debt covenant have a significant effect, but the bonus mechanism does not have a significant effect, while tax minimization only affects the relationship between debt covenant and transfer pricing.