Indonesia – The Revamped And Compiled Transfer Pricing Regulation
The Minister of Finance (MoF) issued a new regulation concerning the implementation of the Arm’s Length Principle in Affiliated Transactions on 29 December 2023 (PMK 172). PMK 172 revokes the previous regulations concerning (i) Transfer Pricing Documents, (ii) Mutual Agreement Procedures and (iii) Advance Pricing Agreement (Revoked Regulations) and unifies the regulations that were previously regulated under such regulations into one single regulation. The purpose of this unification is to provide fairness, legal certainty and easiness to the taxpayers. PMK 172 contains 11 sections that are further elaborated into 75 articles, i.e., (i) Section 1: Article 1 – Definition, (ii) Section 2: Article 2 – Related Parties, (iii) Section 3: Articles 3-15 – Implementation of Arm’s Length Principle, (iv) Section 4: Articles 16-35 – Transfer Pricing Documents, (v) Section 5: Articles 36-39 – Compliance Testing, (vi) Section 6: Article 40 – Linkage Adjustment, (vii) Section 7: Articles 41-54 – Mutual Agreement Procedures, (viii) Section 8: Articles 55-17 – Advance Pricing Agreement, (ix) Section 9: Article 72 – Delivery of Documents and Decrees, (x) Section 10: Article 73 – Transitional Provisions, (xi) Section 11: Articles 74-75 – Closing Provisions. This publication will focus more on some differences of PMK 172 compared to the Revoked Regulations.
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