Transfer Pricing & Cross-Border Advisory
Arm's-length documentation for related-party transactions, cross-border structuring, and DTAA application — including absent-treaty jurisdictions.
Direct Answer
Indonesian transfer pricing requires arm's-length documentation for related-party transactions under PMK regulations. Cross-border structuring covers intercompany loans, royalty flows, service charges, and DTAA application — including absent-DTAA jurisdictions like Brazil.
Who this is for
- PT PMAs with intercompany transactions above DJP disclosure thresholds
- Groups with intercompany loans between Indonesia and parent jurisdictions
- Companies licensing intellectual property into or out of Indonesia
- India-Indonesia groups with management fee or service charge arrangements
- Companies receiving a DJP transfer pricing enquiry or audit
- Groups preparing Country-by-Country Reports (CbCR) with Indonesian entities
Problems we solve
- —Intercompany transactions lack arm's-length documentation required under PMK
- —Intercompany loan interest rates are not benchmarked against market rates
- —Management fees and service charges to foreign related parties are not supported
- —DTAA application positions are not documented or are applied inconsistently
- —DJP has challenged a related-party transaction in an audit
- —Group TP policy does not align with Indonesian regulatory requirements
Our approach
- 1
Transaction mapping and threshold analysis
We map all related-party transactions, quantify them against DJP disclosure thresholds, and prioritize documentation needs by risk and materiality.
- 2
Functional analysis
We document functions performed, assets employed, and risks assumed (FAR analysis) for each related party to establish the correct transfer pricing method.
- 3
Comparability and benchmarking
We identify comparable transactions or companies using recognized databases (Bureau van Dijk, Bloomberg) and construct arm's-length ranges for each transaction type.
- 4
TP documentation preparation
We prepare Master File and Local File documentation in the format required by Indonesian PMK regulations and aligned with OECD BEPS Action 13 requirements.
- 5
DTAA and structuring advisory
We advise on the application of available DTAA provisions, withholding tax rates, and — for absent-treaty jurisdictions — domestic law positions and advance pricing agreement (APA) options.
Deliverables
Regulatory framework
Frequently asked questions
Related case studies
Intercompany Loan Write-Off — Indonesia-Brazil Divestment
Structured TP documentation for intercompany loan write-off on Indonesia-Brazil divestment. Supported DJP audit-ready filing.
40%
Exposure reduction
India-Indonesia Management Fee Structuring
Redesigned management fee arrangement between Indian parent and Indonesian subsidiary to satisfy DJP benefits-test requirements.
100%
Deductibility maintained
Ready to talk Indonesia compliance?
Partner-led response within one business day. NDA available on request.