KONSEP DASAR TRANSFER PRICING HUBUNGAN ISTIMEWA, THE ARM’S LENGTH PRINCIPLE, COMPARABILITY ANALYSIS, TRANSFER PRICING METHOD, AND EXTERNAL DATABASE

Referensi : Transfer Pricing : Suatu Tinjauan Akuntansi, Manajemen dan Pajak S-153/PJ.04/2010, tanggal 31 Maret 2010 Perihal : Panduan Pemeriksaan Kewajaran Transaksi Afiliasi

Transfer Pricing ? Harga yang diperhitungkan untuk keperluan pengendalian manajemen atas transfer barang dan / atau jasa atar pusat responsibilitas profit atau cost ( Tsurumi, 1984 )

What is Transfer Pricing Determining transfer pricing in the absence of market forces makes it possible for MNE to report incorrect amount of taxable income. This has led to the rise of transfer pricing regulations which prevent MNE for setting any arbitrary price between related parties.

Kapan Transfer Pricing mulai ?

HUBUNGAN ISTIMEWA Pasal 18 ayat (4) (a) UU Pajak Penghasilan Hubungan antara Wajib Pajak yang mempunyai penyertaan 25% atau lebih pada pihak yang lain, atau hubungan antara Wajib Pajak yang mempunyai penyertaan 25% atau lebih pada dua pihak atau lebih, demikian pula hubungan antara dua pihak atau lebih yang disebut terakhir. Kepemilikan atau penyertaan modal.

Pasal 18 ayat (4) (a) UU Pajak Penghasilan A Menguasai B C Menguasai A dan B C A A B B C = Wajib Pajak atau seseorang 7

HUBUNGAN ISTIMEWA Pasal 18 ayat (4) (b) UU Pajak Penghasilan Hubungan antara dua atau lebih Wajib Pajak yang berada di bawah pemilikan atau penguasaan yang sama baik langsung maupun tidak langsung. Hubungan istimewa di antara Wajib Pajak dapat juga terjadi karena penguasaan melalui manajemen atau penggunaan teknologi walaupun tidak terdapat hubungan kepemilikan. Hubungan istimewa dianggap ada apabila satu atau lebih perusahaan berada di bawah penguasaan yang sama. Demikian juga hubungan di antara beberapa perusahaan yang berada dalam penguasaan yang sama tersebut.

Pasal 18 ayat (4) (b) UU Pajak Penghasilan Contoh Hubungan Istimewa Karena Penguasaan A Mr. X/ Management A Luar Negeri 60% 20% B C Indonesia Mr. X/ Management A A, B dan C merupakan pihak-pihak yang saling mempunyai hubungan istimewa, meskipun kepemilikan saham A pada B hanya 20%. 9

Article 9 (1) Tax Treaty Paragraph 1 of Article 9 of the UN Model Tax Convention provides specific definition of related parties, that is : an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, 10

HUBUNGAN ISTIMEWA Art. 9 OECD Model mengatur hubungan istimewa dalam konteks Transfer Pricing sebagai berikut : Perusahaan A di Negara A “berpatisipasi (participate) baik secara langsung maupun tidak langsung dalam manajemen, pengendalian atau kepemilikan modal” dari perusahaan B di Negara B; Pihak yang sama (bisa berbentuk orang pribadi maupun perusahaan) ‘berpartisipasi (participate) baik secara langsung maupun tidak langsung dalam manajemen, pengendalian atau kepemilikan saham” dari perusahaan A di Negara A dan perusahaan B di Negara B.

Pengertian Pengendalian “pengendalian” manajemen baik secara langsung maupun tidak langsung, dan pengendalian atas perusahaan melalui kepemilikan saham” menurut David Grecian dalam kongres International Fiscal Assosiation menyatakan bahwa yang dimaksud dengan pengendalian antara lain adalah : Mempunyai kewenangan untuk membuat keputusan yang terkait dengan kebijakan keuangan dan operasi dari suatu perusahaan; Mempunyai pengaruh untuk menentukan besarnya harga yang ditetapkan Sedangkan yang dimaksud dengan berpartisipasi dalam suatu manajemen adalah ikut terlibat dalam pembuatan keputusan atas kegiatan operasi suatu perusahaan. Adapun yang dimaksud dengan manajemen adalah bisa level direktur maupun level manajer.

HUBUNGAN ISTIMEWA Pasal 18 ayat (4) (c) UU Pajak Penghasilan terdapat hubungan keluarga baik sedarah maupun semenda dalam garis keturunan lurus dan/atau ke samping satu derajat. Yang dimaksud dengan "hubungan keluarga sedarah dalam garis keturunan lurus satu derajat" adalah ayah, ibu, dan anak, sedangkan "hubungan keluarga sedarah dalam garis keturunan ke samping satu derajat" adalah saudara. Yang dimaksud dengan "keluarga semenda dalam garis keturunan lurus satu derajat" adalah mertua dan anak tiri, sedangkan "hubungan keluarga semenda dalam garis keturunan ke samping satu derajat" adalah ipar.

Comparison among Indonesia & OECD Definition of Related Parties Controlled by ownership 25% or more An enterprise of a Contracting State participates directly in the management, control or capital of enterprise of the other Contracting State The same persons participate directly or indirectly in the management, control, or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State Controlled by substantial facts direct or indirect control over another taxpayer; presence of control through management or technology utilisation A family relationship either through bloodline or through marriage within one degree of direct or indirect lineage Transactions subject to the arm’s length principle (ALP) Transaction between two enterprises that are considered to be related parties Is the ALP applied for domestic transactions YES N/A

Arm’s Length Principle Pasal 18 ayat (3) UU PPh: Direktur Jenderal Pajak berwenang untuk menentukan kembali besarnya penghasilan dan pengurangan serta menentukan utang sebagai modal untuk menghitung besarnya Penghasilan Kena Pajak bagi Wajib Pajak yang mempunyai hubungan istimewa dengan Wajib Pajak lainnya sesuai dengan kewajaran dan kelaziman usaha yang tidak dipengaruhi oleh hubungan istimewa.

ARM’S LENGTH PRINCIPLE Penjelasan Pasal 18 ayat (3) UU PPh: Maksud diadakannya ketentuan ini adalah untuk mencegah terjadinya penghindaran pajak yang dapat terjadi karena adanya hubungan istimewa. Apabila terdapat hubungan istimewa, kemungkinan dapat terjadi penghasilan dilaporkan kurang dari semestinya ataupun pembebanan biaya melebihi dari yang seharusnya. Dalam hal demikian, Direktur Jenderal Pajak berwenang untuk menentukan kembali besarnya penghasilan dan/atau biaya sesuai dengan keadaan seandainya di antara para Wajib Pajak tersebut tidak terdapat hubungan istimewa. Dalam menentukan kembali jumlah penghasilan dan/atau biaya tersebut digunakan metode perbandingan harga antara pihak yang independen (comparable uncontrolled price method), metode harga penjualan kembali (resale price method), metode biaya-plus (cost-plus method), atau metode lainnya seperti metode pembagian laba (profit split method) dan metode laba bersih transaksional (transactional net margin method).

ARM’S LENGTH PRINCIPLE Penjelasan Pasal 18 ayat (3) UU PPh: Demikian pula kemungkinan terdapat penyertaan modal secara terselubung, dengan menyatakan penyertaan modal tersebut sebagai utang maka Direktur Jenderal Pajak berwenang untuk menentukan utang tersebut sebagai modal perusahaan. Penentuan tersebut dapat dilakukan, misalnya melalui indikasi mengenai perbandingan antara modal dan utang yang lazim terjadi di antara para pihak yang tidak dipengaruhi oleh hubungan istimewa atau berdasar data atau indikasi lainnya. Dengan demikian, bunga yang dibayarkan sehubungan dengan utang yang dianggap sebagai penyertaan modal itu tidak diperbolehkan untuk dikurangkan, sedangkan bagi pemegang saham yang menerima atau memperoleh bunga tersebut dianggap sebagai dividen yang dikenai pajak.

ARM’S LENGTH PRINCIPLE Pasal 2 PER-43/PJ/2010 Ayat (1) dan (2) menyatakan bahwa transaksi yang dilakukan Wajib Pajak dengan pihak-pihak yang mempunyai hubungan istimewa yang dapat mengakibatkan pelaporan jumlah penghasilan dan pengurangan untuk menghitung besarnya Penghasilan Kena Pajak bagi Wajib Pajak tidak sesuai dengan Prinsip Kewajaran dan Kelaziman Usaha (Arm’s Length Principle) meliputi antara lain : penjualan, pengalihan, pembelian atau perolehan barang berwujud maupun tidak berwujud; sewa, royalti, atau imbalan lain yang timbul akibat penyediaan atau pemanfaatan harta berwujud maupun tidak berwujud; Penghasilan atau pengeluaran sehubungan dengan penyerahan atau pemanfaatan jasa; Penyerahan atau perolehan harta dalam bentuk instrumen keuangan, dan penghasilan atau pengeluaran yang timbul akibat penyerahan atau perolehan harta dalam bentuk instrumen keuangan dimaksud.

ARM’S LENGTH PRINCIPLE Pasal 3 PER-43/PJ/2010 Ayat (1) menyatakan bahwa Wajib Pajak yang melakukan transaksi sebagaimana dimaksud dalam Pasal 2 dengan pihak-pihak yang mempunyai Hubungan Istimewa wajib menerapkan Prinsip Kewajaran dan Kelaziman Usaha (Arm’s Length Principle). Transaction within related parties based on Lamp. 3A SPT Badan : Penjualan/pembelian barang berwujud (bahan baku, barang jadi barang dagangan; Penjualan/pembelian barang modal, termasuk aktiva tetap; Penyerahan/pemanfaatan barang tidak berwujud; Peminjaman uang; Penyerahan jasa; Penyerahan/perolehan instrumen keuangan seperti saham dan obligasi Dan lain-lain

ARM’S LENGTH PRINCIPLE Pasal 1 butir 6 PER-43/PJ/2010 menjelaskan: Prinsip Kewajaran dan kelaziman Usaha (arm’s length principle/ALP) merupakan prinsip yang mengatur bahwa apabila kondisi dalam transaksi yang dilakukan antara pihak-pihak yang mempunyai Hubungan istimewa sama atau sebanding dengan kondisi dalam dalam transaksi yang dilakukan antara pihak-pihak yang tidak mempunyai Hubungan Istimewa yang menjadi pembanding, maka harga atau laba dalam transaksi yang dilakukan antara pihak-pihak yang mempunyai Hubungan Istimewa harus sama dengan atau berada dalam rentang harga atau laba dalam transaksi yang dilakukan antara pihak-pihak yang tidak mempunyai Hubungan Istimewa yang menjadi pembanding.

ARM’S LENGTH PRINCIPLE Faktor Penentu Pembanding Pertanyaan Prinsip Kewajaran Transaksi Independen Apakah transaksi independen sebanding akan dinilai dengan harga yang sama ? Kelaziman Usaha Pandangan ekonomis dari sektor usaha dimana Wajib Pajak melakukan transaksi afiliasi Apakah kondisi dan PLI transaksi afiliasi, secara ekonomis merupakan kondisi yang berlaku dan sesuai dengan PLI sektor usaha Wajib Pajak ? 21

COMPARABILITY ANALYSIS Significance of the comparability analysis and meaning of “comparable” generally based on a comparison of the conditions in a controlled transaction with the conditions in transactions between independent enterprises; in order for such comparisons to be useful, the economically relevant characteristics of the situations being compared must be sufficiently comparable; to be comparable means that none of the differences (if any) between the situations being compared could materially affect the condition being examined in the methodology (e.g. price or margin), or that reasonably accurate adjustments can be made to eliminate the effect of any such differences. in order to establish the degree of actual comparability and then make appropriate adjustments to establish arm’s length conditions (or a range thereof), it is necessary to compare attributes (five factors of comparability) of the transactions or enterprises that would affect conditions in arm’s length transactions.

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COMPARABILITY ANALYSIS Five factors determining comparability The examination of the five comparability factors is by nature two-fold, i.e. it includes an examination of the factors affecting taxpayer’s controlled transactions and an examination of the factors affecting uncontrolled transactions. Both the nature of the controlled transaction and the transfer pricing method adopted should be taken into account when evaluating the relative importance of any missing piece of information on possible comparables, which can vary on a case-by-case basis. The five factors comparability are: 1. Characteristics of property or services 2. Functional analysis 3. Contractual terms 4. Economic circumstances 5. Business strategies

COMPARABILITY ANALYSIS 1. Characteristics of property or services Transfer of tangible property; the characteristics that may be important to consider are : the physical features of the property, its quality and reliability, and the availability and volume of supply. The provision of services; the characteristics that may be important to consider are : the nature and extent of the services. Intangibles property; the characteristics that may be important to consider are : the form of transaction (e.g. licensing or sale), the type of property (e.g. patent, trademark, or know-how, the duration and degree of protection, and the anticipated benefits from the use of the property.

COMPARABILITY ANALYSIS 2. Functional analysis Compensation usually will reflect the functions that each enterprise performs (taking into account assets used and risks assumed). Therefore, in determining whether controlled and uncontrolled transactions or entities are comparable, a functional analysis is necessary. Functional analysis seeks to identify and compare the economically significant activities and responsibilities undertaken, assets used and risks assumed by the parties to the transactions. Function : design, manufacturing, assembling, R & D, servicing, purchasing, distribution, marketing, advertising, transportation, financing and management. Assets used : plant and equipment, the use of valuable intangibles, financial assets, ect. the nature of the assets used, such as the age, the market value, location, property right protections available. Risks assumed : market risk, such as input cost and output price fluctuations; risks of loss associated with the investment in and use property, plant and equipment; risks of the success or failure of investment in R & D; financial risks such as those caused by currency exchange rate and interest rate variablility; credit risks.ect.

COMPARABILITY ANALYSIS 3. Contractual terms The contractual terms of a transaction generally define explicitly or implicitly how the responsibilities, risks and benefits are to be divided between the parties. An analysis of contractual terms should be a part of the functional analysis. The terms of a transaction may also be found in correspondence / communications between the parties other than a written contract. Where no written terms exist, the contractual relationships of the parties must be deduced from their conduct and the economic principles that generally govern relationships between independent enterprises.

COMPARABILITY ANALYSIS 4. Economic circumstances Arm’s length prices may vary across different markets even for transactions involving the same property or services; therefore, to achieve comparability requires that markets in which the independent and associated enterprises operate do not have differences that have material effect on price or that appropriate adjustments can be made. The factors to be considered : geographic location; the size of the markets; the extent of competition in the markets and the relative competitive positions of the buyers and sellers; the availability (risk thereof) of substitute goods and services; the levels of supply and demand in the market as a whole and in particular regions, if relevant; consumer purchasing power; the nature and extent of government regulation of the market; costs of production including the costs of land, labor, and capital; transport costs; the level of market (e.g. retail or wholesale); the date and time of transactions.

COMPARABILITY ANALYSIS 5. Business strategies Business strategies would take into account may aspects of an enterprise such as innovation and new product development, degree of diversification, risk aversion, assessment of political changes, input or existing and planned labor laws, duration of arrangement, and other factors bearing upon the daily conduct of business. Market penetration schemes : taxpayer seeking to penetrate a market or to increase its market share might temporarily charge a price for its product that is lower than the price charged for otherwise comparable products in the same market

COMPARABILITY ANALYSIS Performing a comparability analysis The comparability analysis always aims at finding the most reliable comparables; In order for process to be transparent, it is considered a good practice for a taxpayers that uses comparables to support its transfer pricing, or a tax administrations that uses comparables to support a transfer pricing adjustment; To provide appropriate supporting information for the other interested party to be able to assess the reliability of the comparables used.

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COMPARABILITY ANALYSIS Typical process of comparability analysis Step Action 1 Determination of years to be covered 2 Broad-based analysis of the taxpayer’s circumstances 3 Understanding the controlled transaction(s) under examinations based in particular on functional analysis, in order to choose the tested party, the most appropriate transfer pricing method to the circumstances of the case, the financial indicator that will be tested, and to identify the significant comparability factors that should be taken into account. 4 Review of existing internal comparables, if any 5 Determination of available sources of information on external comparables where such external comparables are needed taking into account their relative reliability 6 Selection of the most appropriate TPM and depending on the method, determination of the relevant financial indicator. 7 Identification of potential comparables 8 Determination of and making comparability adjustment where appropriate 9 Interpretation and use of data collected, determination of the arm’s length remuneration

TRANSFER PRICING METHODS (TPM) Methods of calculation of arm’s length price Traditional Methods Comparable Uncontrolled Price (CUT) method Resale Price (RP) method Cost Plus (CP) method Transactional profit Methods Profit Split (PS) methods (Contributions PS, Residual PS, Comparable PS) Transactional Net Margin methods

TRANSFER PRICING METHODS (TPM)

TRANSFER PRICING METHODS (TPM)

TRANSFER PRICING METHODS (TPM) Comparable Uncontrolled Price

TRANSFER PRICING METHODS (TPM) 1. Comparable Uncontrolled Price When using CUP, the comparable transaction and tested transaction sales/purchase of inventory assets should be the same or similar in terms of property, construction, functions ect and substantially the same in terms of conditions. Result of reviewing comparable transactions The same type of product The same market level Substantially the same in volume; the same terms of contract The same business strategies The same role and functions of P; no intangible used The same market conditions; no government regulations. Computing ALP applying CUP is appropriate In the case there is a difference between the comparable and tested transactions, and the difference is not properly adjusted for in the price, CUP should not be applied.

TRANSFER PRICING METHODS (TPM) Resale Price 3. Cost Plus

TRANSFER PRICING METHODS (TPM) 2. Resale Price A comparable transaction is a transaction where a third-party purchases/sells the same or similar inventory assets in terms of property, construction, functions etc, as the inventory assets traded in the tested transaction, from/to other third-parties. Result of reviewing comparable transactions Deem to have similar inventory The same market level Substantially the same in volume; the same terms of contract The same business strategies The same role and functions of P; no intangible used The same market conditions; no government regulations. Computing ALP applying RP is appropriate In the case there is a difference between the comparable and tested transactions, in terms of the functions of the seller, and the difference is not properly adjusted for in the gross margin, the RP should be applied.

TRANSFER PRICING METHODS (TPM) 3. Cost Plus A comparable transaction is a transaction where a third-party manufactures/purchases the same or similar inventory assets in terms of property, construction, functions etc, as the inventory assets traded in the tested transaction, and resells them to other third-parties. Result of reviewing comparable transactions Deem to have similar inventory The same market level Substantially the same in volume; the same terms of contract The same business strategies The same role and functions of P; no intangible used The same market conditions; no government regulations. Computing ALP applying CP is appropriate In the case there is a difference between the comparable and tested transactions, in terms of the seller’s functions, and the difference is not properly adjusted for in the mark-up, the CP should be applied.

TRANSFER PRICING METHODS (TPM) 4. PS (Contribution PS Method)

TRANSFER PRICING METHODS (TPM) 5. TNMM

TRANSFER PRICING METHODS (TPM) TNMM Result of reviewing comparable transactions (no mention on the similarity inventory) No GP data available (or the cost of sales) No comparable transactions for CUP/CP method due to original technologies. Cannot make adjustments needed for difference affecting GP, no comparable transactions for the RP method. Comparable transactions available based on the operating margin. Prices tend be affected by differences in products, margin of gross profit on sales tends to be affected by differences in accounting principle. On the other hand, the operating margin is considered to be less susceptible to the effect of such differences. Computing ALP applying TNMM is appropriate

TRANSFER PRICING METHODS (TPM) TNMM Result of reviewing comparable transactions Licenses original technologies; no comparable transactions for CUP/CP, Manufacturing and sales transactions; impossible to apply the RP Impossible to apply traditional method Comparable transactions available based on the operating margin. Prices tend be affected by differences in products, margin of gross profit on sales tends to be affected by differences in accounting principle. On the other hand, the operating margin is considered to be less susceptible to the effect of such differences. Computing ALP applying TNMM is appropriate

TRANSFER PRICING METHODS (TPM) TPM Comparison

See this picture below : A B A and B is comparable ?..............................(give your comment)

See this picture below : D C C and D is comparable ?..............................(give your comment)

See this picture below : F E and F is comparable ?..............................(give your comment)

Memotret proses bisnis wajib Pajak Characteristics FAR analysis Contractual terms Economic circumstances Business strategies Apakah “picture WP” mewakili potret bisnis wajib pajak ???

Comparable pictures Comparable picture A B C D

Identifikasi & kuantifikasi beda kondisi Picture WP comparable picture A, B, C ,D Identifikasi & kuantifikasi beda kondisi

Identifikasi & kuantifikasi beda kondisi General market conditions Competition Geographical structure High capital investment High safety standard Term od sales Interest rate AR turnover / AP turnover dll

See this picture below : J I and J are comparable but have a differences? can you make an adjustment ?

Database of Benchmark Study No Commercial Database Type of Database 1 DataIndo Intiswakarsa DIS-IBISWorld Contains information business industrial report in Indonesia 2 BVD OSIRIS Contains information on approximately 45,000 listed and 17,000 major unlisted/delisted companies around the world ORBIS Contains comprehensive information on approximately 63 million companies around the world ORIANA Contains comprehensive information on approximately 7.9 million listed and unlisted companies across the Asia-Pacific region. AMANDEUS Contains comprehensive information on approximately 14.8 million listed and unlisted companies across Europe. 3 BLOOMBERG, COMPUSTAT, LEXIS NECIS, REUTERS, BBW, ONE-SOURCE, 10Q WIZARDS, GOOGLE FINANCE, YAHOO FINANCE, BPS, BEI, ect.

EXAMPLE of a COMPARABLE SEARCH