Transfer pricing is the number one tax topic globally and Indonesia is no different. Since formal introduction of implementing regulations in 2009, the Indonesian tax authorities have placed great emphasis on a rapid and comprehensive introduction of documentation requirements, which are being rigorously implemented. Many assessments have been raised and many cases appealed in Tax Court with little in the way of satisfactory conclusions. The key is to ensure that clear, comprehensive and consistent documentation and supporting evidence is available to justify transaction structures and pricing. This documentation must be up to date and robust enough to withstand scrutiny. Experience has shown that following these basic rules can assist in avoiding any adjustment being made at tax audit or verification stage, thus ensuring that taxpayers do not need to follow the lengthy, expensive and ultimately inconclusive litigation route.
Our people have been involved in over 100 Indonesian transfer pricing documentation engagements and have assisted taxpayers successfully withstand challenges to arrangements on purchases, sales, intra group service provision and royalties. In addition, we have assisted in the preparation of documentation defending financing arrangements. Our partner, Graham Garven, was formerly in charge of the transfer-pricing group at KPMG in Indonesia, where he led the team to country awards in 2010 and 2012. We can assist clients with:
We have access to the most appropriate databases and ensure that selection criteria and comparability analysis are consistent with the fact patterns under review. At all times, we combine our knowledge and experience in transfer pricing matters, with our general tax, customs and regulatory expertise, ensuring that advice and documentation incorporate all aspects and avoiding conflicts and inefficiencies.