Digital development plays a crucial role in enhancing business processes and operations for companies in the modern era. This study investigates the relationship between corporate digital transformation and tax avoidance. By analyzing 270 companies indexed in LQ45 on the Indonesia Stock Exchange from the 2018-2023 period, we found that digital transformation significantly increases tax avoidance. Companies tend to exploit loopholes in the digital taxation system to reduce their tax obligations. This highlights the need for improvements and stricter supervision of the digital taxation system to prevent state revenue loss. This research focuses on large, liquid companies, potentially limiting its relevance to smaller firms. We also used data from 2018, when not all companies were implementing the digital systems. Additionally, limited published tax data makes measuring tax avoidance challenging, relying solely on comparing taxes paid to taxable income.