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Friday, 09 November 2012 02:36

Inadequate of TP Doc

Inadequate of TP Doc

Based on Tax Director Circulation letter number PER-32/PJ./2011 concerning about Arm’s Length Principle the minimum analysis must be considered to be performed in preparing TP Doc are as follows:

Functional analysis (FAR) consist of:

1. Function Performed

2. Asset employee

3. Risk assumed


Economic Analysis consist of:

1. Geographic location

2. Market Size

3. Competition aspect

4. Availability of services or product replacement

5. Demand and supply

6. Customer purchasing of power

7. Government rule and policy involvement in market

8. Production cost

9. Date and time of transaction

Company must analyze all aspects comparable items as mentioned above as ruled to fulfill the minimum requirement. If one or more comparable items are not available, our professional’s judgment classified that document as inadequate TP Doc. It could create a big issue between Indonesia tax authority and tax payer.

Transfer Pricing Method

Indonesia Tax authority accepted these following methods:

  1. Comparable Uncontrolled Price / CUP (Metode perbandingan harga antara pihak yang tidak mempunyai hubungan istimewa
  2. Reseale Price Method / RPM (Metode Harga Penjualan Kembali)
  3. Cost Plus Method / CPM (Metode Biaya-Plus)
  4. Profit Split Method / PSM (Metode Pembagian Laba)
  5. Transactional Net Margin Method / TNMM (Metode Laba Bersih Transaksional)
Published in General Data
Friday, 09 November 2012 03:15

Indonesia Tax Model

Step to Prepare TP Study (Indonesia Tax Model)

Transfer Pricing Study

Transfer pricing Study is a study which can be documented considering the international transactions between the two or more Associated Enterprises. The international transactions may be happened these following:

  1. Purchase of raw-material
  2. Sale of Finished goods
  3. Manufacturing Contract
  4. Software Development Services
  5. IT Enable Services
  6. Support Services
  7. Technical Services Fees
  8. Management Fees
  9. Loan
  10. Purchase of Fixes Assets
  11. Reimbursement Expenses
  12. Sale or Purchase Machinery
  13. Patent
  14. Trade Mark
  15. Franchise, etc
Published in General Data

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