Ministry of Finance Regulation (PMK) No. 172 of 2023
The Government has updated the Transfer Pricing regulations through Ministry of Finance Regulation (PMK) No. 172 of 2023, which became effective on 29 December 2023. Under this new regulation, the obligation to prepare, maintain, and submit Transfer Pricing Documentation for fiscal year 2024 onwards must comply with the provisions stipulated in PMK No. 172 of 2023. These updated rules are expected to promote fairness, provide legal certainty, and facilitate the implementation of tax regulations related to related-party transactions that were not fully addressed under the previous framework.
Below are the seven key changes introduced under PMK No. 172 of 2023:
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Arm’s Length Principle (ALP)
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Corresponding adjustments for domestic transfer pricing
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Secondary adjustments
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Adjustments to selling prices for Value Added Tax (VAT) purposes
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Timeframe and thresholds for the preparation of Transfer Pricing Documentation
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Mutual Agreement Procedure (MAP)
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Advance Pricing Agreement (APA)
For a more detailed explanation of the above matters, please refer to the link below
