COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Master documents and local documents must be organized based on the data and information available at the time the transaction is made
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Master documents and local documents must be prepared using the Indonesian language
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master documents and local documents must be available no later than 4 months after the end of the Tax Year
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master documents and local documents must be held no later than 4 months after the end of the Tax Year
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Detailed explanation-1: -The transfer pricing documentation should address such allocations of risk, how the risk allocations compare to the comparable companies used, and why the resulting pricing is consistent with the agreement.
Detailed explanation-2: -Transfer pricing local files are prepared at company or country level, whereas the master file is prepared at group level. The local file supports the master file and usually relates to a specific entity in a specific country.
Detailed explanation-3: -Rule 10D prescribes the information and documents required to be kept and maintained under section 92D i.e., Local File. Further Rule 10DA prescribes information and document to be kept and maintained under proviso to sub-section (1) of section 92D i.e., Master File.
Detailed explanation-4: -Section 92: Income to be computed with respect to arm’s-length price. Section 92(1) provides that any income arising from an international transaction shall be computed having regard to the arm’s-length price. Section 92(2) covers cost contribution arrangements.