Page 2 - Working Paper (Multinational Firms Losses and Profit Shifting Behavior in Indonesia: Some Comments)
P. 2
Multinational Firms’ Losses
and Profit Shifting Behavior
in Indonesia:
Some Comments:
B. Bawono Kristiaji* 1 TABLE OF CONTENTS
Corporate income tax is one of the
major tax revenue sources in Indonesia.
Up to January 2015, more than 4000
1. Background ............. 3
multinational corporations or firms that
their shareholders or ultimate owner are
2. Financial Loss
foreign entities (Penanaman Modal Asing/
in Business
PMA), suffered lossess. This situation Framwork ................ 3
made them did not pay their income tax.
3. Financial Loss
Some say this is happened because of the as Profit Shifting
macroeconomic downturn and business
Strategy ................... 4
environment, the others murmur about
the worries of behavior of profit shifting
4. What Should We
in undertaking. In this paper, tax and non-
Do? .......................... 7
tax motives of multinational firms’ losses
will be elaborated. Financial loss become
5. Conclusion ............... 9
the issue that will be described in business
framework, also will be framed as profit
shifting strategy.
Furthermore, how Government of
Indonesia (Directorate General of Taxes/
DGT) should react on those particular
issues? Should DGT have effective anti-
avoidance rules and improve their tax
administration system? Detail rules and
administration strategy will be beyond the
scope of this paper.
*B. Bawono Kristiaji is partner in Tax Research & Training Services,
DANNY DARUSSALAM Tax Center. He received his bachelor and master
degree in economics from University of Indonesia. He obtained his MSc in
international business taxation from Tilburg University, the Netherlands.
He holds Advanced Diploma in International Taxation (ADIT) from The
Chartered Institute of Taxation (CIOT), United Kingdom.
Disclaimer:
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or
entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate
as of the date received or that it will continue to be accurate in the future. The author’s views expressed in this Working Paper do not
necessarily reflect of the views of DANNY DARUSSLAM Tax Center. Working Papers describe research in progress by the authors and are
published to elicit comments and to further debate.