COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Make an overview of master documents and local documents and submit them as attachments in the Annual Corporate Income Tax Return for the tax year concerned
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Meet the minimum information requirements for master documents and local documents
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If the master document is made in a foreign language, the document does not have to be accompanied by a translation in Indonesian
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master documents and local documents must be accompanied by a statement regarding the availability of the said Transfer Pricing Document signed by the party providing the Transfer Pricing Document
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Detailed explanation-1: -Documenting Transfer Pricing Transactions Taxpayers are required to keep three types of documentation: a Master File, a Local File (which must be available within four months after the end of the fiscal year), and a Country-by-Country Report (CbCR). They must all be submitted in Bahasa Indonesia.
Detailed explanation-2: -Although the master file needs to be available to local tax authorities, it does not have to be compiled by each business entity-only by the parent company. The master file represents an opportunity to explain transfer pricing policy to tax authorities.
Detailed explanation-3: -Mandatory TP documentation is required to be maintained by the Taxpayers where the aggregate value of international transactions with their Associated Entities exceeds INR 10 million (INR 200 million in case of domestic transactions).
Detailed explanation-4: -Withholding tax under Article 26 Income received by a non-Indonesian taxpayer is subject to a rate of 20% final withholding tax. Article 26 is applied on the following income: Dividends. Interest.