Introduction of transfer pricing regulations

The Director General of Taxation (DGT) has introduced transfer pricing (TP) regulations for Indonesian taxpayers, via Regulation No. PER-43/PJ/2010 which took effect on 6 September 2010. The Regulation is based significantly on the OECD's TP Guidelines, and its main contents are summarized below.

Scope

The Regulation applies to transactions between related parties which have an impact on the reporting of income or expenses for corporate tax purposes, in…