Indonesian Transfer Pricing Regulation aligns with BEPS Action 13


Published on February 10, 2017

The Minister of Finance (MoF) has issued Transfer Pricing Documentation regulation, Minister of Finance Regulation No. 213/PMK.03/2016 ("PMK-213") on 30 December 2016. The requirements under this regulation are applicable for the tax year 2016 and onwards.

The released PMK- 213 requires the so-called three-tiered approach for transfer pricing documentation, consisting of:
  • Masterfile
  • Local file
  • Country-by-Country Reporting (CbCR)


Masterfile and Local file in Indonesia

A Masterfile and Local file are mandatory for taxpayers who have transaction with a related party which:
  • in the previous year have annual gross turnover that exceeds IDR 50 billion (if tax payer has operated for less than 12 months, the turnover should be annualised)
  • in the previous year have annual related party transactions that exceeds:
    a) IDR 20 billion for transaction involving transfer of tangible goods and/or
    b) IDR 5 billion for each transaction on service, interest payment, intangible or other transactions that are defined as high risk transaction
  • the related party is domicile in a country or jurisdiction with corporate income tax rate lower than Indonesia corporate income tax rate

The files must be prepared based on data and information that are available at the time related party transaction occured and the transfer pricing documentation must be available by the fourth month following the end of a tax year. The summary of the files shall be attached with the annual corporate income tax return.


Country-by-Country Reporting (CbCR) regulation in Indonesia

A Country-by-Country Reporting is mandatory for taxpayers who:
  • become parent company of a group
  • has current year consolidated gross turnover of a minimum of IDR 11 Trillion
  • a member of a group companies if the parent company:
    a) do not require CbCR or
    b) do not have an exchange of information agreement with Indonesia or
    c) CbCR can not be accessed by Indonesia tax authority.

CbCR must be available within 12 months after the end of a tax year and must be submitted to the DGT as a attachment to the following year's annual corporate income tax return.

In summary, the PMK-213 aligns with OECD BEPS Action 13. Appearantly, in conjuction with PMK 213, Indonesia authority signs tax co-operation agreement to enable automatic sharing of Country-by-Country information to allow tax administrations to perform a high-level transfer pricing risk assessment.



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