The Problem of Transfer Pricing in Indonesia Taxation System

Mokhamad Khoirul Huda, Ninis Nugraheni and Kamarudin Kamarudin
Additional contact information
Mokhamad Khoirul Huda: Faculty of Law, Hang Tuah University, Surabaya, Indonesia,
Ninis Nugraheni: Faculty of Law, Hang Tuah University, Surabaya, Indonesia,
Kamarudin Kamarudin: Faculty of Law, Hang Tuah University, Surabaya, Indonesia

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 4, 139-143

Abstract: This paper aims to analyze Indonesia taxation system in term of transfer pricing transaction held by multinational enterprises cooperating with affiliated ones overseas. As the consequence of transfer pricing, the government has a decreasing potential income from tax, since those multinational companies are more likely to shift their tax liabilities into other countries with lower tax rate. The practice of transfer pricing commonly happens as a form of minimizing tax expense by making use the loopholes of tax provision without disobeying any taxation rules (tax avoidance) and the transaction in order to minimize the payable tax liabilities by disobeying any tax provision (tax evasion). Transfer pricing is held by multinational companies in order to minimize their operating performance and optimize the tax arrangements as either as the main or important priority.

Keywords: Transfer Pricing; Multinational Enterprise; Taxation System; Indonesia (search for similar items in EconPapers)
JEL-codes: H2 L1 (search for similar items in EconPapers)
Date: 2017
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/4793/pdf (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/4793/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2017-04-19

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().