03 — Transfer Pricing
Assess related-party transactions, prepare documentation that reflects how your business actually operates, and understand where transfer pricing risk sits.
Client situations
Companies with related-party transactions may be required to prepare a Master File and Local File, depending on applicable thresholds.
Management fees and royalties are frequently examined for evidence of benefit and arm's length pricing.
Changes in functions, assets, or risks — such as converting a distributor or centralising procurement — affect expected profitability.
Sustained losses or low margins in an entity with related-party transactions may draw questions during audits.
Scope of assistance
Engagement process
Interview management to understand the value chain, group structure, and transactions.
Analyse functions, assets, and risks; test pricing and documentation against requirements.
Prepare documentation and explain risks, assumptions, and recommended changes.
Assist with updates, information requests, and alignment with the group's global policy.
Considerations
Indonesian transfer pricing documentation and the arm's length principle are governed by PMK-172/PMK.03/2023, which consolidated earlier rules. Thresholds and timelines should be confirmed against the regulation for each year.
Documentation must reflect actual conduct. Agreements that differ from how the business operates provide limited protection.
Local documentation should be consistent with the group's global transfer pricing policy and with information reported in other jurisdictions.
Summary for general information only. Regulations are applied to the specific facts of each engagement.
How we present exposure to management
Impact
FAQ
Not necessarily. Requirements depend on thresholds and on the nature of the transactions. We review your facts against the current regulation to confirm what applies.
Yes. We can review global documentation for consistency with Indonesian requirements and with how the local entity operates, and recommend local supplements where needed.
Please discuss APA or MAP matters with us directly. We will confirm the scope of assistance we can provide for your specific situation.
Related
Indonesian tax advisory for foreign-invested companies and cross-border transactions, including treaties and withholding tax.
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Share the context of your matter. We will propose a scope and approach for an initial discussion.
