International Journal of Scientific Research and Management (IJSRM) ||Volume||10||Issue||12||Pages||EM-2022-4360-4369||2022|| Website: www.ijsrm.in ISSN (e): 2321-3418 DOI: 10.18535/ijsrm/v10i12.em011 Solihin, IJSRM Volume 10 Issue 12 December 2022 [www.ijsrm.in] EM-2022-4360 The Effect of Tax, Exchange Rate, and Leverage on Transfer Pricing Policy with Foreign Ownership as Moderating Variables Solihin solihinsuwardjo@gmail.com Wiwik Utami wiwik.utami@mercubuana.ac.id Faculty of Economics and Business, Universitas Mercu Buana Abstract; In general, multinational companies that have affiliated relationships make transfer pricing policies. There are various motivations related to the transfer pricing policy This research aims to analyze the causalcorrelation of tax, exchange rate, and leverage on transfer pricing with foreign ownership as moderator. Theresearch population is companies from manufacturing sector that listed on the IDX year 2017 until 2019.The sample of this research is 52 companies from manufacturing sector that were chosen based on purposivesampling, with the criteria of companies that have foreign ownership. The method of this research is aquantitative method, with panel data regression analysis. The results of this research are exchange rate andleverage have positive effect on transfer pricing, while tax has no effect on transfer pricing. Foreignownership as a moderator wasn’t able to moderate the effect of tax, exchange rate, and leverage on transferpricing. The implication of the research is that the dominant motives that trigger companies to do transfer pricing are exchange rates and leverage, not tax incentives. If the exchange rate increases, the company will sell to countries whose currency exchange rates strengthen so that the price of products/services will be cheaper and able to compete. Keywords: Tax, Exchange Rate, Leverage, Transfer Pricing, Foreign Ownership Introduction Today's business development has become increasingly global. Several companies in Indonesia have developed into multinational institutions that make their activities are not only in a country, but also in several countries. Multinational companies are institutions that have a parent or branch entity in more than one country. Multinational companies certainly have different legal basis in a country, including differences in tax regulations between countries, including differences in applicable tax rates. Transfer pricing is a policy that is manipulated by companies to make transfer pricing for transactions that the company does. Transfer pricing can also mean the price charged by individual business units in multi- unit companies for transactions that arise. Differences in tax regulations and rates can be used by multinational companies to minimize tax. This is done by minimizing taxes through transfer pricing transactions by reducing the company's selling price or increasing the purchase price. Suryana (2012) argue that transfer pricing is also a company's effort to increase or decrease the price of goods unreasonably. This transaction is carried out by a related party. Transfer pricing cases in 2018 rose quite rapidly compared to 2017. In a report covering 89 jurisdictions, 2018 MAP Statistics, the OECD published that the amount of transfer pricing