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15 April 2020 New Indonesian Advanced Pricing Agreement regulation On 18 March 2020, Indonesia’s Ministry of Finance (MoF) has released Regulation number 22/PMK.03/2020 (PMK-22), Guidelines for the Establishment and Implementation of Advanced Pricing Agreements, which repeals the prior regulation on advanced pricing agreements (APA). The stated intent of PMK-22 is to align Indonesia’s APA framework with the OECD/ G20 BEPS project, to provide greater legal certainty as well as to make the APA program more effective. PMK-22 provides a number of significant developments which include the following, among other things: (1) An APA can now cover five forward years as well as open historical years under a rollback, subject to certain conditions; (2) Additional criteria on a taxpayer’s eligibility for the APA program; (3) The pre-filing process burden has eased significantly for taxpayers under this new regulation; (4) Stricter timing of process; (5) The application for an APA has the ability to trigger an audit of the taxpayer where the taxpayer’s related party transactions have not been audited in the three prior years or a roll-back request is submitted; (6) Clarification that the DGT may not make a correction to the transfer pricing of a transaction covered under the APA as long as the taxpayer has implemented the APA agreement; (7) Annual compliance reports requirement; and (8) APA renewal process. Document ID: 2020-5744 |
