Singapore: Comparative analysis of Indonesia's new Transfer Pricing guidelines against Singapore's Transfer Pricing guidelines

Indonesia's new transfer pricing ("TP") guidelines are enshrined in the Minister of Finance Regulation 172/2023 ("MoFR-172"), which was announced on the 29th of December 2023. MoFR-172 revokes previous MoFR guidance ( MoFR-22, MoFR-49 and MoFR-213), all of which have beem stremlined and restated in MoFR-172. There are changes to how the TP process, the Mutual Agreement Procedure ("MAP") and the Advance Pricing Arrangements ("APA") are implemented in Indonesia, with the aim of enhancing clarity and fairness in the business transaction.

This alert reviews the updated consolidated TP guidalines for Indonesia and compares the guidlines to the Sinagpore TP guidelines - with reference to the IRAS TP Guidelines (Sixth Edition). The definition of related parties, application of the arm's length principle, TP documentation requirement, compliance assessments corresponding adjustments, mutual agreement procedure ("MAPs") and Advance Pricing Agreement ("APA") in the guidelines, will be compared.

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