Indonesian Director General of Taxation releases Regulation No.69/2010 concerning Advance Pricing

Jan. 13, 2011 - PRLog -- The regulation was dated 31st December 2010 but only issued on 4th January 2011. The Regulation No.43/2010 dated 6th September 2010 confirmed the possibility for taxpayers to apply for an APA, but there were no detailed rules provided at that time regarding the APA procedures to be followed. The release of Regulation No.69/2010 is significant in that it indicates that the DGT is now serious in its encouragement for taxpayers to manage their transfer pricing risks in Indonesia through the APA mechanism.

The regulation mainly explains the various stages of the APA process:
• Pre-lodgment meeting.
• Submission of APA formal application.
• Discussion of the terms of the APA.
• Preparation of the formal APA agreement.
• Implementation and evaluation on APA.

Interestingly, Regulation No.69/2010 only provides for APAs of three years’ duration, although the terms can be rolled back to prior years as well if those prior years have not been subjected to tax audit. Furthermore, Regulation No.69/2010 provides that the information/data/records submitted to the DGT as part of the APA application process must not be disclosed by the DGT to other parties.

The regulation also provides that, if an APA cannot be finalized, the DGT should return all of the information/data/records to the taxpayer and that the DGT is prohibited from using the information/data/recordsin the future in the conduct of any tax audits or investigations of the taxpayer. The inclusion and implementation of such a confidentiality provision has been critical for the success of APA programs in many other tax jurisdictions.

Transfer Pricing Associates has recently been nominated as one of the leading transfer pricing firms in Indonesia for the 2010 year by the prestigious International Tax Review magazine.

For more details on our services in Indonesia and the rest of Asia, please refer to our website at www.tpa-global.com/press

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