TY - JOUR
T1 - Minimising potential tax avoidance by strengthening tax policy on transfer pricing in Indonesia
AU - Tambunan, Maria Rud
AU - Rosdiana, Haula
AU - Irianto, Edi Slamet
N1 - Publisher Copyright:
© 2019, Australasian Tax Teachers' Association. All rights reserved.
PY - 2019/1/1
Y1 - 2019/1/1
N2 - This article examines transfer-pricing implementation and challenges in Indonesia since its first tax reforms in 1983. The OECD has been formulating guidelines, and the concept of the arm’s-length principle, since 1979, lately through the Action Plan on Base Erosion and Profit Shifting (‘BEPS’) in July 2013. The government of Indonesia put serious effort into transfer-pricing issues in the late 2000s, when it identified high numbers of potential transfer-pricing abuses. This research takes a qualitative approach — the data was collected through a literature review and interviews. It shows that the arm’s-length principle was adopted in Indonesia when tax reforms began in 1983, but its implementation didn’t start until 2008 due to a lack of expertise in transfer pricing. Since its implementation, the tax authority has faced technical challenges due to a lack of competent experts. When Indonesia declared their commitment to implement transfer-pricing rules following the OECD BEPS Action Plan 2013, the tax authority should have followed global examples of transfer-pricing policy. In Indonesia, this policy implementation is still in progress, with many improvements required.
AB - This article examines transfer-pricing implementation and challenges in Indonesia since its first tax reforms in 1983. The OECD has been formulating guidelines, and the concept of the arm’s-length principle, since 1979, lately through the Action Plan on Base Erosion and Profit Shifting (‘BEPS’) in July 2013. The government of Indonesia put serious effort into transfer-pricing issues in the late 2000s, when it identified high numbers of potential transfer-pricing abuses. This research takes a qualitative approach — the data was collected through a literature review and interviews. It shows that the arm’s-length principle was adopted in Indonesia when tax reforms began in 1983, but its implementation didn’t start until 2008 due to a lack of expertise in transfer pricing. Since its implementation, the tax authority has faced technical challenges due to a lack of competent experts. When Indonesia declared their commitment to implement transfer-pricing rules following the OECD BEPS Action Plan 2013, the tax authority should have followed global examples of transfer-pricing policy. In Indonesia, this policy implementation is still in progress, with many improvements required.
UR - http://www.scopus.com/inward/record.url?scp=85075245213&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:85075245213
SN - 1832-911X
VL - 14
JO - Journal of the Australasian Tax Teachers Association
JF - Journal of the Australasian Tax Teachers Association
IS - 1
ER -