Transfer Pricing Dispute Analysis of PT ABX Fiscal Year 2016

DOI

10.2991/aebmr.k.200915.027How to use a DOI?

Keywords

transfer pricing, tax dispute, comparability adjustments

Abstract

This study focuses on the transfer pricing disputes analysis of PT ABX in Fiscal Year 2016. The transfer pricing dispute of PT ABX is a dispute on adjustments made by PT ABX that is not recognized by the Tax Examiner (DGT) in terms of increasing the level of comparability with the Comparable Company in the transfer pricing analysis. This is commonly referred as Comparability Adjustments. Therefore, the purpose of this study is to find out how the analysis of comparability adjustments conducted by PT ABX, DGT’s interpretation of adjustments for comparable condition differences carried out by PT ABX and the proof of PT ABX’s Comparability Adjustments analysis and DGT interpretation. This study shows that there are 3 relevant comparability adjustments made by PT ABX which are (a) product introduction cost adjustment that proved the product life cycle theory, (b) idle capacity adjustment that proved the theories. where idle capacity will cause fixed costs per unit to rise, and (c) supplier compensation adjustment which is a one-time expense. However, there are 3 irrelevant comparability adjustments made by PT ABX because of the reliability of the adjustments and not in accordance to OECD TP Guidelines and UNTPM which are (a) inventory write-off, (b) increase of labour cost, and (c) forex impact. Also, this study proved that the TNMM’s shortcomings are there are possibility of several factors in the financial statements of the companies being tested as well as the comparable companies that affect their financial performance.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Aristian Yudhistira
AU  - Danny Septriadi
PY  - 2020
DA  - 2020/09/15
TI  - Transfer Pricing Dispute Analysis of PT ABX Fiscal Year 2016
BT  - Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)
PB  - Atlantis Press
SP  - 112
EP  - 116
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200915.027
DO  - 10.2991/aebmr.k.200915.027
ID  - Yudhistira2020
ER  -