ANALYSIS OF TAX COURT DECISION ON TRANSFER PRICING DOCUMENTATION DISPUTE CASE #PUT108378.15/2013/PP/M. IA YEAR 2018

Abstract

The rapid growth of multinational companies is followed with the intra-group transactions of affiliated companies, so called transfer pricing. To prevent tax avoidance on affiliation transaction (transfer pricing), Directorate General of Taxation, Ministry of Finance Republic of Indonesia (DGT) obligates the taxpayer to prepare and declare the transfer pricing documentation along with company’s annual tax return. As a consequence of the self-assessment method, the Directorate General of Tax has the right to do tax audit including the audit on transfer pricing documentation. The audit of transfer pricing documentation usually will not finish at the first level of tax audit by the DGT team. It usually moves further to tax court level. Resolving the problem that would like to be discussed further by researchers to find out how to overcome this, how to solve it by the panel of judges and also make decisions in accordance with applicable regulations. This research was conducted using data collection techniques through case studies. Based on the results of the study along with literature study application, it was concluded that there was a different opinion between taxpayer and tax auditor regarding the transfer pricing documentation. The decision of the Tax Court by the panel of judges was decided after carrying out the above arguments and proof-verification in accordance with applicable regulations. This research is limited because it only discusses one decision on one transaction that occurs.