Advance pricing agreement option
Bisa minta APA ke DJP supaya aman soal TP?
The situation
Yes. An advance pricing agreement can be unilateral, bilateral or multilateral and can cover up to 5 years, with rollback possible.
The law
- PMK 172/2023 on the arm's length principle: Master file and local file if prior year revenue is over IDR 50 billion, tangible related party deals over IDR 20 billion, other related party deals over IDR 5 billion, or a related party in a lower tax country
What it means for you
APAs give certainty but take time and resources. They suit large recurring transactions. Talks can take a long time, and the DJP needs full facts. Bilateral APAs also need the other country to agree.
What to do
- Assess whether the deal size justifies an APA.
- Prepare documentation.
- Apply to the DJP.
- Negotiate terms.
An APA does not remove the need for yearly documentation.
We can do this for youTransfer pricing documentation: master file, local file, summary with the annual return and CbCR: IDR 45.000.000