This study aims to analyze the correlation between the level of debt and the book tax differences on persistent earning in the Manufacturing Company listed on the Indonesian Stock Exchange in the period of 2011 to 2013. The sample used in this study is 125 manufacturing companies listed in the Indonesian Stock Exchange. Multiple regression analysis method is applied for data analysis and used to Determine the effect that Occurs between levels of debt and the book tax differences on persistent earning. The findings show that the debt level negatively and insignificantly affects persistent earning, the permanent difference positively and insignificantly affects persistent earning, the temporary difference positively and insignificantly affects persistent earning, the large positive book-tax difference positively and insignificantly affects persistent earning, the large negative book-tax difference negatively and significantly affects persistent earning, the interaction of large positive book-tax difference and PTBIt positively and insignificantly affects persistent earning, and the interaction of large negative book-tax difference and PTBIt positively and insignificantly affects persistent earning.

Keywords: Deferred Tax, Book-Tax difference, Persistent earning