Indonesia Revises Transfer Pricing Regulation: Nair & Co.

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SUNNYVALE, Calif.--(BUSINESS WIRE)--

Indonesia's revised transfer pricing (TP) regulation now differentiates between transactions with foreign and domestic related parties. The revised version is applied since November 11, 2011 and replaces the previous regulation that was issued on September 6, 2010.

The new regulation can be applied to a related party transaction for domestic related parties including permanent establishments to adjust differences in tax rates on final and non-final income tax among certain business sectors, sales tax on luxury goods and transactions with oil and gas companies that have contracts for production sharing.

The transfer pricing method is now based on the most appropriate method and no longer on the hierarchy based model.

Arm's Length Principle (ALP)

The Arm's Length Principle is now being applied for a related party transaction whose value is more than IDR 10 billion.

The use of incidental internal comparables which could be used only in an incidental related party transaction is now being recognized by the Directorate General of Taxation (DGT). The new regulation also lists more comparability factors for economic circumstances.

Read more at http://www.nair-co.com/Indonesia-TransferPricingRegulation.aspx

Please call/email to learn more on how to calculate tax adjustments based on Indonesia's transfer pricing regulations.

About Nair & Co.

Nair & Co. provides you with your one touch outsourced finance, internal audit compliance, HR and legal department for your international operations. If you are expanding abroad for the first time, our turnkey solution will help you do so with minimal risk, stress and cost. We currently support more than 1000+ client operations in over 50 countries and have core offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). Learn more at www.nair-co.com.

Nair & Co.
Nandita Verma or Sigi Achappa, 408-515-9048
nandita.verma@nair-co.com
sigi.achappa@nair-co.com
or
Gutenberg Communications for Nair & Co.
Stefanie Cannon or Marilyn Gerber, 408-335-6965
nairco@gutenbergpr.com

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Posted In: Press Releases
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