09-11-2012

Indonesian Tax Authority Right

Indonesian Tax Authority Right

Indonesian tax authority has right to asses the tax amount must be paid by tax payer if company treat the uncontrolled transaction did not applied the fair market value as ruled by Indonesian Director Rule number: PER-32/PJ./2011 concerning about Arm’s Length Principle. This following action can be performed by Indonesian Tax Authority in regard of transfer pricing cases:

  1. Special tax audit on transfer pricing
  2. Adjustment
  3. Tax investigation

Tax Audit on Transfer Pricing

Indonesia Tax Director has released the circulation letter number SE-07/PJ/2012 about the tax audit strategic. Based on that circulation letter, one of the tax audit object is the entities with the transfer pricing exposure.


Tax Audit Scope

As stipulated on Indonesia Tax Director circulation letter number SE-85/PJ/2012 about tax audit policy the tax audit scope are as follows:

  1. The related tax and accounting period (one year period)
  2. Several periods for all taxes or part of taxes (previous year)

 

Audit Time on Transfer Pricing

Total audit time will be spent on special audit for transfer pricing up to 24 months.


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