Benchmarking with local comparables
Pembanding TP harus perusahaan Indonesia?
The situation
The DJP prefers local comparables. Foreign comparables may be accepted when local data is not enough, with justification.
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
- Art 18(3), Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: The DJP may redetermine income and costs between related parties using the arm's length principle
What it means for you
Explain your search and why foreign data was used. Use data available when prices were set. Indonesia uses an ex ante approach, so data should be what was available when prices were set. Refresh searches as your file ages.
What to do
- Search local data first.
- Document the search.
- Justify any foreign data.
- Update regularly.
Unexplained foreign comparables are often rejected.
We can do this for youTransfer pricing documentation: master file, local file, summary with the annual return and CbCR: IDR 45.000.000