Page 1 - Newsletter (Indonesia Adopts CbC Reporting and New Transfer Pricing Documentation Requirements)

DDTC Tax Newsletter 01 I Jan 2017

Indonesia Adopts

CbC Reporting and

New Transfer Pricing

Documentation Requirements

Introduction reporting and its corresponding updates to transfer

pricing documentation requirements. MoF 213/2016
Since the release of the OECD final reports on Action brings clarity to the transfer pricing documentation legal
Plan on BEPS in 2015, including Action 13 regarding framework. Previously, transfer pricing documentation
guidance on transfer pricing documentation and requirements are only regulated by way of Directorate
country-by country (“CbC”) reporting, many countries General of Tax (“DGT”) Regulations, which is not
have reacted through draft or enacted legislation. CbC mandated directly by the Law.
reporting is part of the minimum standard in the Action
Documentation Requirements and
Plan on BEPS that has been agreed to by G20/OECD
member countries for consistent implementation in each Reporting Taxpayers
country. Under the standard, a multinational enterprise
(“MNE”) group that meets a certain revenue threshold is
MoF 213/2016 distinguishes 3 types of transfer
required to file a CbC report consisting of tax jurisdiction-
pricing documentations:
wide information relating to the global allocation of
the income, the taxes paid and certain indicators of the 1. A “master file” that consist of high level information
location of economic activity among tax jurisdiction in concerning the MNE group global operations and
which the MNE group operates. transfer pricing policies;
2. A “local file” that consist of information regarding
As part of Indonesia’s commitment to the
the taxpayer specific business operations, financial
implementation of the standard, the Ministry of
information and affiliated transactions, including
Finance released on 30 December 2016, Minister of
the transfer pricing analysis of the covered affiliated
Finance Regulation No. PMK-213/PMK.03/2016 (“MoF
transactions; and
213/2016”), the much-anticipated regulations on CbC