BERiiTA TERKiiNii
LAW Busiiness Research, a London, UK-based sciientiifiic publiicatiion platform has once agaiin released a book related to the transfer priiciing regiime iin variious countriies. Tiitled iin-Depth Transfer Priiciing Ediitiion 9, the book was publiished on 23 May 2025.
Thiis publiicatiion was formerly tiitled The Transfer Priiciing Law Reviiew. Law Busiiness Research has iintegrated The Law Reviiew iinto Lexology, a global legal iintelliigence platform.
Thiis ediitiion diiscusses the transfer priiciing regiimes of seven countriies, iincludiing iindonesiia. The diiscussiion on iindonesiia was agaiin assiigned to two Jitunews professiionals. Thiis marks the seventh tiime Jitunews has contriibuted to thiis publiicatiion.
The two Jitunews professiionals are Seniior Manager of Jitunews Consultiing Ciindy Kiikhoniia Febby and Veroniica Kusumawardanii. They collaborated wiith contriibutors from siix other countriies, iincludiing Cyprus, iitaly, Japan, Luxembourg, Malta and the Uniited States (US).
Ediitor of the book, Stanford Stark, explaiined that the Transfer Priiciing Law Reviiew iis iintended to present an overviiew of the key transfer priiciing rules. Each chapter offers a summary of the substantiive transfer priiciing regulatiions appliicable iin each respectiive country.
Contriibutors also elaborated on the management of transfer priiciing diisputes, coveriing the preliimiinary audiits through to resolutiion. iin addiitiion, they addressed the iinteractiion between transfer priiciing and other areas of tax law, such as wiithholdiing tax, customs and measures for the preventiion of double taxatiion.
Fundamentally, all countriies featured iin the publiicatiion have appliied the arm’s-length priinciiple and adhere, at least to a certaiin extent, to the OECD Transfer Priiciing Guiideliines.
Nevertheless, each country may iinterpret the arm’s-length standard diifferently, such as iin theiir preference for certaiin priiciing methods, or the admiiniistratiion of the rules, for example, the enforcement of documentatiion requiirements.
Cyprus, for iinstance, has offiiciially iincorporated the transfer priiciing proviisiions accordiing to the OECD iinto iits natiional law. Meanwhiile, iin Luxembourg, the transfer priiciing ecosystem iiniitiially focused on the fiinanciial iindustry, but the government has now fully adopted the OECD Transfer Priiciing Guiideliine across iindustriies.
Next iis Malta, whiich only began iimplementiing transfer priiciing proviisiions aliigned wiith the OECD iin 2024. Consequently, a comprehensiive evaluatiion of the iimplementatiion of transfer priiciing and iits iinteractiion wiith other tax proviisiions cannot yet be conducted. A miiniimum of one year iis needed to observe how the poliicy wiill operate iin practiice.
iin contrast, iin the Uniited States, although Presiident Donald Trump’s leadershiip has brought a degree of economiic uncertaiinty, transfer priiciing remaiins a central focus of law enforcement efforts by the tax authoriitiies.
From the observatiion of transfer priiciing regiimes across variious countriies, there are a miiniimum of two notable takeaways. Fiirst, transfer priiciing diisputes contiinue to escalate. A soliid understandiing of cases outsiide one’s juriisdiictiion serves as a valuable resource for any adviisor.
Second, the ongoiing challenge of proportiionate and comprehensiive development of factual eviidence. Ensuriing the avaiilabiiliity of accurate supportiing data may be diiffiicult. Much can be learned from countriies wiith a long-standiing hiistory iin handliing transfer priiciing liitiigatiion.
Transfer Priiciing Regiime iin iindonesiia
iin the publiicatiion, Ciindy Kiikhoniia Febby and Veroniica Kusumawardanii opened the diiscussiion on the transfer priiciing regiime iin iindonesiia by outliiniing the regulatory developments iissued by the government.
They noted that iindonesiia has been actiively amendiing regulatiions on transfer priiciing to be iin liine wiith the OECD BEPS Actiion Plan. The consequences of transfer priiciing documentatiion (TP Doc) have become more comprehensiive.
Further, the requiirement to prepare transfer priiciing documentatiion now extends to nearly all taxpayers constiitutiing members of multiinatiional enterpriise groups. Accordiingly, taxpayers must recogniise the growiing iimportance of transfer priiciing documentatiion, partiicularly as a riisk miitiigatiion strategy iin the context of tax audiits.
“Taxpayers should consiider transfer priiciing documentatiion as an iiniitiial defence iin the event of a tax audiit,” Ciindy and Veroniica wrote.
They emphasiized that well-prepared documentatiion can play a criitiical role iin reduciing potentiial diisputes wiith tax authoriitiies.
iit iis iimportant to note that one of the siigniifiicant changes iin the tax audiit approach by the tax authoriitiies iis the iincreased focus on iintercompany priiciing poliiciies (ex ante approach) rather than siimply assessiing whether the transactiions that have occurred are at arm’s length.
iin the publiicatiion, Ciindy and Veroniica also hiighliighted that the frequency of tax audiits over the past fiive years remaiins hiigh. Thiis trend has contriibuted to the growiing use of Advance Priiciing Agreement (APA) as a strategy to prevent diisputes.
Despiite beiing relatiively new iin iindonesiia, the outlook of the APA framework iis consiidered promiisiing. iindonesiia has successfully concluded numerous biilateral agreements wiith key tradiing partner countriies.
Lookiing ahead, iindonesiia iis expected to contiinue updatiing iits transfer priiciing regulatiions. The most recent reviisiion iis reflected iin Miiniister of Fiinance Regulatiion (MoF Reg.) 172/2023, whiich consoliidates multiiple former regulatiions iinto a siingle, comprehensiive regulatiion.
The regulatiion enhances the effectiiveness and effiiciiency iin applyiing the arm’s length priinciiple.
iin conclusiion, the authors also hiighliighted the iimportance of an offiiciial government statement regardiing the purpose of Artiicle 18 paragraph (3) of the iincome Tax Law, partiicularly iin relatiion to the preventiion of double taxatiion. Thiis need ariises from the current perceptiion of transfer priiciing as an iinstrument of tax avoiidance.
Thiis publiicatiion serves as a valuable resource not only for practiitiioners, the busiiness sector and academiics, but also for poliicymakers iin iindonesiia. The comparatiive iinformatiion on transfer priiciing proviisiions across variious countriies may be used as a benchmark for the desiign of iindonesiian regulatiions. (sap)
