Indonesia has been issued The Minister of Finance (MoF) of Republic Indonesia Regulation No. 213/PMK.03/2016 and PER No. 29/PJ/2017. The MoF issued based on BEPS (Base Erosion and Profit Shifting) Action 13 which specifically regulate about Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting (CbCR). Based in BEPS Action 13, the format of CbCR Multinational Enterprise (MNE) Groups require such as information:
- List of Member of MNE, including their principal business activities each jurisdiction (specifically refer to Appendix F of MoF No. 123)
- Allocation of Income (specifically refer to Appendix G of MoF No. 123) each jurisdiction from all member of MNE
Company in Indonesia that must be provide transfer pricing documentation are based on criteria in link here.
Transfer Pricing Documentation (TPD) consist of some overview, analysis and explanation of transfer pricing method. Here’s some point in TPD:
- Executive Summary, consist of Purpose of Report and Summary of all conclusion analysis
- Scope of Report, consist of Coverage and Limitations
- Company Overview, consist of group overview, including ownership structure, business strategy and operation, and financial performance.
- Industry overview
- Function Analysis
- Transfer Pricing Regulation in Indonesia, consist of transfer pricing method that used by the company.
- Intercompany Transaction, consist of the analysis and application of transfer pricing method in the transaction.
Overall, TPD were used for examine implementation of arm’s length principle that MNE use between related parties transaction and third parties transaction.