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Transfer Pricing Advisory in Indonesia

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Aiming at protecting their tax revenues, tax authorities across the globe are developing and implementing strict regulations. The main concern of the tax authorities is related to cross-border business transactions — whether they have been established in accordance with the worldwide-accepted arm’s length principle and if the transactions are documented according to domestic tax rules.

Overview of Transfer Pricing in Indonesia

Overview of Transfer Pricing in Indonesia

Since transfer pricing (TP) can be used to transfer assets and income between jurisdictions, all with favourable tax rates, tax authorities have now considered it a significant issue. With that being said, Indonesian tax authorities attempt to tackle the challenge by implementing detailed TP regulations and complex documentation requirements, among others.

Related parties that fail to comply with the TP regulations and cannot satisfy the Indonesian documentation requirements can suffer from severe penalties. Nevertheless, when related parties can understand that TP is a continuous process, they will eventually be able to minimise risks related to taxes in Indonesia.

Cekindo’s Transfer Pricing Advisory Services in Indonesia

Your business model is the key to determine your TP setting. Our TP advisory services are marked by the objective to support your business needs, while at the same time are designed to comply with the statutory requirements in Indonesia and international practices.

Based on our extensive experience in transfer pricing, our team can provide you with the following services:

  • Determination of arm’s length price range in respect of the proposed related party transactions such as cost plus mark-up analysis and arm’s length net margin range.
  • Review of existing value chain to identify any areas of risk and opportunities to improve existing TP policies.
  • Review of inter-company agreements to ensure that the same is compliant from TP perspective.
  • Royalty benchmarking to determine the arm’s length royalty payout for use of IP keeping in view the functional profile of the transacting entities.
  • Management cross-charge documentation, including benefit analysis and methodology for arm’s length cross-charge.

 

Nipun Arora

Nipun Arora
Director, Transfer Pricing Practice

Nipun is a Chartered Accountant from India and leads the Transfer Pricing practice at In.Corp Global Pte Ltd in Singapore. He has worked with Big Four accounting firms throughout his career and has accumulated more than 13 years of experience in Transfer Pricing (TP) providing advisory services to medium and large sized multinational corporations in the Automotive, FMCG, Retail, Telecom and Luxury goods sector. Nipun has been involved in several litigation matters involving complex TP issues and has assisted Senior Counsels in India upto the High Court stage. He has also been involved in assisting clients in preparing year end Transfer Pricing documentations ensuring that the Transfer Pricing policies are in agreement with the arm’s length principles and the BEPS Action Plans. He has also worked on several large TP Due Diligence mandates.

 

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Selected Testimonials

  • logo-PT-Asia-Victory

    Prior to choosing Cekindo as our business partner in Indonesia, we interviewed and compared several companies. Finally, we chose to cooperate with Cekindo because of its professionalism and quality. Cekindo has assisted us in many ways, from company certification application to KITAS application and financial statement compliance to the fulfillment of other tax obligations in Indonesia. We appreciate the team’s fast response and professionalism in preparing the financial statements, among others.

    Doris Chen
    PT. Asia Victory and PT. Bigger One
  • logo Toaster

    When I joined Toaster, it was already working with Cekindo. But it’s quick to see why Toaster chose Cekindo. Cekindo has been very helpful throughout. Toaster Headquarters is based in London. Indonesian tax laws are not our specialty. Cekindo’s team has helped us to understand Indonesian tax. They are very knowledgeable and dependable, and therefore a huge asset to our company.

    Tsui-Sie Wong
    Toaster
  • logo Ohmnia

    As a new business in Indonesia, we started consulting with multiple law firms but quickly narrowed down to only Cekindo. Cekindo was recommended as one of the top firms by multiple sources in the business community. The staff at Cekindo was very responsive to our needs as a new business. The team provided consultancy and assisted our startup firm with initial business setup, licenses and permits, HR/recruitment and market research. One year since our establishment, we still consider Cekindo as our partner.

    PT Ohmnia Tenaga Surya
  • Jan Pilar - Hydropol

    When we intended to enter the Indonesian market back in 2013/14, Cekindo helped us to understand the possibilites and options for business presence in Indonesia through legal advice & also advisory on how to arrange for ownership. Furthermore, Cekindo also provides us with a range of fully professional and reliable accounting & tax services for our representative office in Indonesia. In the world of digital & virtual economy like today, it is an essential prerequisite to have the most reliable business partner like Cekindo.

    Jan Pilař
    Hydropol
  • Sagar Datar - Bristlecone

    A huge gratitude to Cekindo, particularly its visa team, for handling our visa cases. During our visa applications, Cekindo was extremely helpful not only in facilitating all of our visa requirements but also in clarifying our queries/doubts. I would like to take this opportunity to acknowledge and appreciate the good work of Cekindo’s visa team.

    Sagar Datar
    Bristlecone