THE EFFECTS OF LEVERAGE, PROFITABILITY AND COMPANY SIZE ON TAX AGGRESSIVENESS

The goal of this study is to see how much leverage, profitability, and company size have on tax aggressiveness in food and beverage firms listed on the Indonesia Stock Exchange. For the 2016-2020 timeframe, the study sample consisted of 8 food and beverage firms listed on the Indonesia Stock Exchange. The research sample used is 8 food and beverage companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The sampling method used purposive sampling method. The data used is secondary data. The analysis used in this research is multiple linear analysis which is processed using eviews10 program. The results show that leverage and company size variables affect on tax aggrressiveness, while profitability variables have no effect on tax aggressivess. Based on the test of the coefficient of determination (R2) equal to 28,3% of the variable tax aggressiveness can be explained by the variable leverage, profitability, company size while 71,7% are influenced by others variable.


INTRODUCTION
Taxes are very important element in a country to support the growth and development of various existing aspects.As which we know the reception tax is the source income biggest for the country specifically in Indonesia and is used by the government for financing development national that is following in Pancasila number 5 which sounds "Keadilan Sosial Bagi Seluruh Rakyat Indonesia".Because that interest Country to tax very much means, without tax country will be lost source main income Country and of course just will be caused no could running wheel government with stable.In constitution Number 16 the year 2009 chapter I tax is contribution must to the country which owed by person personal or body which nature compel and used for necessity country as prosperity people.So, the government and taxpayers are required to cooperate well, the case this done for welfare whole people at each region Republic Indonesia.A Company is wrong one must tax *Corresponding author's e-mail: ellyanareza20@gmail.com http://openjournal.unpam.ac.id/index.php/EAJwhich own obligation for pay tax following with provision taxation, which is calculated from big profit clean before tax multiplied with rate tax which applies.However, existence purpose government for maximizing reception from sector tax contrary with purpose company as must tax body which wants profit by maximum.So that case this makes the company for doing strategy in avoiding tax which realized in shape planning tax or with aggressiveness tax.
Aggressiveness tax is something activity which done through planning tax which aims or minimize burden tax with smallest which character legal (validated according to law) nor illegal (violate the law) which could harmful country.Although has set in constitution taxation as well as have penalty special, However, still many companies which do violation tax.
Based on observation During 5 years (2016 to 2020) could be seen that Mark ETR from 8 sample company food and drink on BEI each company show results which ride down and fickle every year.
According to (Dyreng et al., 2010) ETR is wrong with one size aggressiveness tax.The more big Mark ETR so level aggressiveness the tax the smaller so also otherwise that the more small Mark ETR will show the more big also aggressiveness the tax (Brian & Martani, 2014).The company that owns ETR (effective tax rate) which low will try to raise ETR with lower profit because the company tends to want profit accountancy which is small to avoid the existence possibility of payment tax which tall in time which will come so that company can do policy on accrual which contained in deferred tax expense that is with making deferred tax expense Becomes smaller.
From the phenomenon case, they could prove that still a lot of companies which still try to do the aggressiveness tax for reducing the burden tax which should they pay, good with do plan the tax which belongs to by legal (tax avoidance) nor illegal (the tax evasion).Besides case the still many again case which shows aggressive tax company in Indonesia that will be a harmful reception country.
There is a factor that could influence aggressiveness tax company is leverage.Leverage is something measurement of how much big assets that owned company which financed by debt.Dependency company on loan or debt show height level leverage company, whereas a company with leverage low finance the asset with capital alone.Leverage rate could describe risk finance company.Leverage describes the proportion of total debt company to total assets owned company with the purpose for knowing decision funding which done by company the management should own decisions which appropriate in composing funding company from a source external that is debt so that no cause risk even loss consequence debt (A. Hidayat & Muliasari, 2020) Factor other which could affect aggressiveness tax is profitability.Profitability is the level of ability a company to produce profit, is wrong one factor which said could influence emergence aggressiveness tax (Prasista & Setiawan, 2016).The higher the level profitability of the company, the higher the profits can be obtained by the company.Inside other, the bigger profit which obtained company, so big tax which paid company also will the bigger.Case this could become a motivation for the company which oriented on profit for doing action tax planning for reducing big tax which paid company, so that makes the company the aggressive to tax.A study was done by (Sidik & Suhono, 2020)  Besides that, also some factors could affect aggressiveness tax that is Size Company.Size company as scale or Mark which could classify something company into the category big or small according to the various method as total assets or total assets company, Mark market share, average level sale and total sale (Cahyono et al., 2016).The bigger size or the scale company so will the easier also company gets the source funding good which characters internal nor external.Size company is a reflection total from an asset that owned something company (Rudangga & Sudiarta, 2016).According to (Allo et al., 2021)

LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
Agency Theory (Jensen & Meckling, 1976) describe a relationship that arises because of a contract between the principal and another party called the agent, where the principal delegates a job to the agent.Agency theory explains that the owner provides resources for the company, (Eksandy, 2020) Agency theory arises because of the existence of a working relationship agreement between the principal who has the authority and the agent or party who is authorized to run the company.The relationship between agency theory and tax research is that there is a conflict of interest between the principal and the agent, the principal will carry out monitoring or supervision by incurring costs for the agent so as not to evade taxes.Another relationship between agency theory and tax avoidance is the conflict that occurs in the interests of corporate profits between tax collectors (tax authorities) and taxpayers (company management) will create moral hazard, (Putri & Irawati, 2019).Tax authorities hopes that there will be as much income as possible from tax collection, while the agents view that the company must generate significant profits with a low tax burden, (Prakosa, 2014).This can be caused by the principal who mandates the agent to minimize corporate taxes so that the company pays lower taxes than it should.

Tax Aggressiveness
According to (Mustika, 2017) is an action taken by a company to reduce taxable income which is carried out through tax planning both in a legal way by doing tax avoidance or in an illegal way carried out by tax evasion by exploiting loopholes in tax regulations.Companies consider taxes as an additional cost burden that can reduce company profits.Therefore, the company is predicted to take actions that will reduce the company's tax burden (Sugiyarti & Ramadhani, 2019).Although tax measures taken do not violate existing regulations, but companies are increasingly taking steps to avoid taxation by utilizing the gaps of existing regulations, the action is *Corresponding author's e-mail: ellyanareza20@gmail.com http://openjournal.unpam.ac.id/index.php/EAJconsidered increasingly aggressive.The main objective of tax aggressiveness is to make the tax burden paid lower, because the company considers the payment of income tax as a very large additional expense or transfer of wealth from the company to the government which can reduce the company's profits, therefore the company is predicted to do actions that can reduce the company's tax burden (Fen & Riswandari, 2019).The act of tax aggressiveness is related to agency theory, because it explains the difference between the agent and the principal.Each variable tested in this study is a form of the relationship between theory and agent.Executive characteristics that describe executives who are risk takers are more daring to make decisions because they are driven by certain goals aimed at by the executive.Financial difficulties also encourage the company's decision to be more aggressive in acting.Earnings management becomes a means to take aggressive actions taxation whose purpose is to obtain benefits by taking aggressive tax actions (Septiawan et al., 2021).

Leverage
Leverage is a ratio that reflects the amount of capital from third parties used by the company to carry out its operating activities (Kasmir, 2014).Leverage indicates how much of the company's assets come from the company's borrowed capital.In addition, the leverage ratio shows the amount of debt owed by the company to pay for its operating activities, which in its use causes fixed costs for the company (Mayangsari, 2015).If the company has a high source of loan funds, the company will incur a highinterest expense.A high source of loan funds will make the interest expense borne by the company high.Interest expense will reduce the company's profit so that reducing the amount of profit will reduce the tax burden borne by the company.The agency theory explains that the higher the company's leverage, the better the transfer of wealth from creditors to company shareholders.Companies that have a larger proportion of debt in their capital structure have higher agency costs.

Profitability
Profitability is the company's ability to earn a profit from the capital used.The managerial performance of each company can be said to be good if the level of profitability of the company it manages is high or in other words maximum, where this profitability is generally always measured by comparing the profits earned by the company with some estimates that become a benchmark for the success of a company.With the existence of the ability to earn profits by using all the company's resources, the company's goals will be achieved.The use of all these resources will allow the company to earn high profits (Rohmansyah et al., 2021).
The results of this study are by following agency theory because when the profit earned is greater, the income tax will automatically increase by following the increase in company profits.
Company Size *Corresponding author's e-mail: ellyanareza20@gmail.com http://openjournal.unpam.ac.id/index.php/EAJAccording to (Hartono, 2009) Company size is the size of the company which can be measured from the total assets/size of the company's assets by using the calculation of the total asset log value.Therefore, the quality of financial reports must be transparent, reliable, and free from earnings management because it can obscure the available information.
Especially for information related to profit minimization to minimize taxable income so that tax payments are minimal.

Hypothesis Development Effect of Leverage on Tax Aggressiveness
Leverage is a measurement of the size of a company's assets financed by debt.Companies with high leverage reflect companies relying on external loans or debt, while low leverage reflects companies financing their assets using their capital.For Companies with high leverage, the company's level of aggressiveness will also be high.This is because loans or debts cause interest expenses which will lead to a decrease in company profits.If the company's profit decreases, the tax burden will also decrease.This theory is in line with research (A.T. Hidayat & Fitria, 2018), based on the results of the multiple regression test, the level of leverage affects tax aggressiveness.Then the formulated hypothesis is: H1: Leverage affects tax aggressiveness

Effect of Profitability on Tax Aggressiveness
Profitability is the ability of a company to generate profits from its business activities.The higher the profit, the higher the tax burden that must be paid by the company.So that a company with high profitability will have a high level of tax aggressiveness, otherwise if the company's profitability is low, the level of tax aggressiveness will be below (Prasista & Setiawan, 2016).However, if the company has no profit (loss) then the company will not pay taxes.Managers who act as agents will try to reduce corporate taxes as much as possible, so as not to reduce manager performance compensation due to the tax burden that erodes company profits.This theory is in line with research (Sidik & Suhono, 2020), based on the results of the multiple regression test, the level of profitability affects tax aggressiveness.Then the formulated hypothesis is: H2: Profitability affects tax aggressiveness

Effect of Company Size on Tax Aggressiveness
Company size can be interpreted as a scale where the size of the company can be classified in various ways, including expressed in total assets, stock mark et value, and others.The larger the size of the company, the more it will try to avoid tax aggressiveness.According to (Allo et al., 2021), large companies tend to continue to take aggressive actions in dealing with the tax burden imposed on their companies compared to smaller companies because large companies tend to gain political power advantages compared *Corresponding author's e-mail: ellyanareza20@gmail.com http://openjournal.unpam.ac.id/index.php/EAJto small companies.Then the formulated hypothesis is: H3: Firm size affects tax aggressiveness

RESEARCH METHOD Data Collection Techniques
This research was conducted on manufacturing companies listed on the Indonesia Stock Exchange.This study uses research with a quantitative research approach.This study uses secondary data secondary internal data.Secondary internal data is data obtained by researchers relating to existing company-internal data (Hermawan & Amirullah, 2016).The secondary data of this study was obtained at IDX of manufacturing companies in the food and beverage sector for the period 2016-2020.

Definitions of Variables Dependent Variable (Y)
The dependent variable is the variable that is influenced or the result of the independent variable (Sugiyono, 2008).In this study, the dependent variable is tax aggressiveness which is measured using the Effective Tax Rate (ETR) which refers to the research of (Putri & Febrianty, 2016).The formula for calculating ETR is as follows:

Independent Variables (X) Leverage
Leverage is the company's ability to meet its obligations, both short-term and long-term (Andhari & Sukartha, 2017).Leverage in this study is measured using the Debt to Total Asset Ratio (DAR) ratio, namely by comparing the company's total liabilities with the company's total assets.The greater the leverage ratio, the greater the proportion of the company's assets financed by its debts.As for the formula:

Profitability
Profitability is the ability of a company to generate profits.The higher the profit, the higher the tax burden that must be paid by the company.The profitability formula is:

Company Size
The size of the company is assessed by the size of the company based on the value of equity, sales value, and asset value in consumption industry companies listed on the BEI.Company size can be proxied by the natural log of total assets, so it can be calculated by the following formula:

Population and Sample
Sampling for this study using purposive sampling technique is a sampling technique that determines special characteristics that are by the research objectives, so that 40 food and beverage company data on the IDX are obtained from 8 sample companies for the period 2016 to 2020 with the criteria for determining the sample as follows: 1. Manufacturing companies in the food and beverage sector are listed on the IDX for the 2016-2020 period.2. Companies that consistently publish annual reports in the 2016-2020 period.3. Companies that do not experience losses during the 2016-2020 period.

Data Analysis Technique
Data analysis is grouping data based on variables and types of respondents, tabulating data based on variables from all respondents, presenting data for each variable studied, performing calculations to test hypotheses that have been proposed (Sugiyono, 2017).In this research, the method used is panel data regression analysis.The panel data regression model used in this study is formulated into the following regression equation: = Company Size (Size) Meanwhile, the ROA variable has the lowest level of risk, which is 0.056536.This shows that the ROA variable during the study period underwent changes that were not too volatile.For variables, ETR and SIZE have values above 0 (zero) which means that the asymmetry of the data distribution around the mean is not normal, while the variable ROA and the LEV have values around 0 (zero) which means that the asymmetry of the data distribution around the mean is normal.The ETR variable has a kurtosis value of more than 3 which means that the height of the data distribution is not normal, while the LEV, ROA, and SIZE variables have a kurtosis value of less than 3 which means that the height of the data distribution is normal.A small probability value tends to lead to the rejection of the null hypothesis of a normal distribution.The probability value of the LEV variable is 0.266478 and the ROA is 0.232166 (greater than α=5%), we cannot reject the h0 that the data are normally distributed.It can be concluded that the Common Effect Model (CEM) is more viable to use than the Fixed Effect Model (FEM) based on the result of previous calculations, the probability values of Cross-section F and Cross-section chi-square > α (0.05).From the output above, it can be seen there is no independent variable that has a value of more than 0.8, so it can be concluded that there is no multicollinearity in the regression model.From the output above, it can be seen the value of prob F and Prob.Chi Square> 0.05, it can be concluded that the panel data regression model does not occur heteroscedasticity.The output above shows that the F-statistic value is 6.142781, while the F table with a level of = 5%, df1 (k-1) = 3 and df2 (nk) = 36, the F table value is 2.866.This F-statistics (6.142781) > F table (2.866) and the value of Prob (F-Statistics) 0.001751 < 0.05, it can be concluded that Ha is accepted, so it can be concluded that the independent variables in this study consist of ROA, LEV, and SIZE together affect ETR.The table above shows that the Adjusted R-Squared value is 0.283462, meaning that the variation of changes in the ups and downs of ETR can be explained by SIZE, ROA, and LEV of 28.3%.While the remaining 71.7% is explained by other variables not examined in this study.Fitria, 2018).The greater the company's debt, the smaller the tax burden due to the increase in the element of business costs, and the reduction is very meaningful for companies subject to high taxes.Therefore, the higher the interest rate, the greater the company's profits from using the debt.(Allo et al., 2021).Because large-scale companies will pay lower taxes than smallscale enterprises and this is because large companies have more resources that can be used for tax planning.Large companies also have large resources to make good tax planning.Companies that can make good planning can reduce the amount of tax that must be paid by the company.*Corresponding author's e-mail: ellyanareza20@gmail.com http://openjournal.unpam.ac.id/index.php/EAJ

CONCLUSION
This study aims to determine the effect of leverage, profitability, and company size on corporate tax aggressiveness with a sample of 40 of 8 manufacturing companies in the food and beverage sub-sector listed on the Indonesia Stock Exchange (IDX) in the 2016-2020 period.This study uses the Eviews11 tool to process financial statement data from 8 companies.From the results of the analysis and discussion using multiple linear regression and classical assumption tests, the following conclusions can be drawn: 1.
From the results of the study, it was found that Leverage had a negative effect on Tax Aggressiveness.

2.
From the results of the study, it was found that Profitability had no effect on Tax Aggressiveness.

3.
From the results of the study, it was found that company size had a positive effect on tax aggressiveness.

Suggestion
With the limitations of this research, the suggestions that can be given by researchers for further research are that further research is expected to use samples from other industrial sectors not only manufacturing companies so that the generalization will increase, but further research is also expected to increase the research period so that it can reflect the long-term condition of the company and future research is expected to use other independent variables.

Figure
Figure 1: Conceptual Framework