Indonesia: Top Six Tax Haven Countries as the Strategy to Tax Avoidance

^abFinanace Program, Accounting Department, Faculty of Economics & Communication,

Bina Nusantara University, Jakarta, Indonesia 11480

^cUniversity Of Indonesia

 Singapore, Netherlands, Virgin Island, Mauritius, Caymand Island and Hongkong are the highest countries that became the location of companies affiliated with the company listed in Indonesia Stock Exchange. Based on the data that has been obtained from the financial statements of listed company the 469 companies listed on the stock exchange there are 128 companies (27.29%) with overseas entities of the 128 companies, listed total overseas affiliated companies amounted to 417 firms in 2012 and 415 companies in 2011. The most of the branches or the parent company are located in Singapore, Netherlands, Virgin Island, Hongkong, Mauritius and Caymand Island. Judging from the existing tax provisions in these countries have all 6 corporate tax rates that is lower than Indonesia. They use tax evoidance to tax haven countries can be made by using some strategies. They are transfer pricing, shopping treaty, thin capitalization and the controlled Foreign company. Singapore, Netherlands, Virgin Island, Mauritius, Hongkong and Caymand Island are tax haven countries which become a tax heaven for Indonesian tax payer. It can be concluded that tax havens are a serious problem for Indonesia and the need for a more assertive policy establishment and more detail about tax havens.