Page 9 - Working Paper (Multinational Firms Losses and Profit Shifting Behavior in Indonesia: Some Comments)

DDTC Working Paper 1215
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loss via profit shifting strategy. Therefore, DGT’s any case, Indonesia is should continuously monitor
auditor should have sound business understanding and ensure their involvement at the global level.
of their taxpayers. The OECD/G-20 BEPS project is likely to be the
fundamental source of design of international tax
Although that difference in tax rate among system in the future. Particularly, for transfer pricing
countries is inducing profit shifting behavior of and thin capitalization rule, the BEPS Actions are
multinational enterprise, the policy on reducing relevant to the tax situation in Indonesia.
corporate tax rate with regards to profit shifting
may not be so relevant for today’s Indonesia agenda. The last broad point I would like to make is that
In general, it would be better to align current Indonesia should improve their tax administration
anti-avoidance rules as applied in Indonesia with system. Even good anti-avoidance rule will not
the international practice. As episodes of major work if there is a lack of expertise, limited access to
international tax reforms are always driven by the database, or no willingness to understand the
multilateral organizations (particularly OECD), in business behavior.

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