Transfer Pricing
Transfer Pricing refers to the pricing of transactions between related parties within a corporate group that share common shareholders or controlling interests.
Transfer Pricing refers to the pricing of transactions between related parties within a corporate group that share common shareholders or controlling interests. Its purpose is to fairly allocate income and expenses in accordance with the Arm’s Length Principle (the Principle of Fairness and Business Customary Practices).
To comply with Minister of Finance Regulation No. 213/PMK.04/2016, taxpayers engaging in transactions with related parties must prepare and maintain proper documentation. This regulation mandates that taxpayers: Document and compile all required records in accordance with applicable tax laws, Apply the Arm’s Length Principle to ensure the fairness and commercial rationality of their transactions.
Our expertise ensures that your transfer pricing policies and documentation adhere to regulatory requirements while optimizing tax efficiency and minimizing audit risks.
Transfer Pricing Documentation Requirements in Indonesia:
- Master File: Provides an overview of the corporate group’s global business operations. Outlines the group’s transfer pricing policies and risk management framework.
- Local File: Detailed analysis of specific intercompany transactions, includes: Comprehensive transaction descriptions, Comparability analysis, Appropriate transfer pricing method selection, Financial data and benchmarking studies
- Country-by-Country Report (CbCR): Consolidated global revenue ≥ IDR 11 trillion (approx. EUR 700 million)
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