Synthesis of empirical evidence on the relationship of tax planning and thin capitalization with tax avoidance: A systematic review of companies listed on the Indonesia Stock Exchange

Abstrak

Tax avoidance remains an important issue in state revenue, and two factors frequently associated with it are tax planning and imbalanced capital structures. Empirical findings in Indonesia regarding these two factors are not uniform, creating a need for systematic evidence synthesis. This study aims to map and classify empirical findings on the effects of tax planning and thin capitalization on tax avoidance among companies listed on the Indonesia Stock Exchange and to analyze the sources of differences across studies. The study employs a systematic literature review based on the PRISMA 2020 protocol. Searches were conducted through Google Scholar and the Garuda portal for publications from 2015 to 2026, resulting in nine eligible articles with ten testing results. The findings were classified into four groups using vote counting and followed by narrative synthesis. The mapping indicates that the direction of the effect of tax planning on tax avoidance remains inconclusive because the available evidence is limited and contradictory, while findings on thin capitalization are divided, with positive and negative results occurring in balanced numbers. The main sources of inconsistency are differences in measurement proxies, sector characteristics, and observation periods that overlap with regulatory changes concerning debt-to-equity limitations. The study recommends more consistent reporting of proxy directions to improve comparability across studies.