The above regulation describes the specific procedures and steps that taxpayers must follow when applying for an APP and/or MAP. More importantly, both regulations introduced a time limit within which Indonesian tax authorities must execute and complete the APA and/or MAP. A decision of the Tax Court taken during the negotiations prior to the agreement In 2010, with the introduction of DGT Regulation No. 48/PY/2010 on guidelines for the implementation of MAP on the basis of double taxation conventions and DGT Regulation No. 69/PY/2010 on APAs, the development of alternative dispute resolution models in Indonesia was initially launched. As transfer pricing (TPS) controversies become more frequent and important for multinational enterprises, the emergence of the Advance Pricing Agreement (APA) and the Mutual Agreement Procedure (MAP) in recent years, as possible dispute settlement mechanisms, is seen as a glimmer of hope for taxpayers. This article explores the regulatory context, progress, challenges and the expected future of APAs and MAPs in Indonesia. The Indonesian Ministry of Finance (MOF) has issued Regulation No. 49/PMK.03/2019 (PMK-49), which provides guidelines for the implementation of the mutual agreement procedure (MAP). PmK-49 is intended to implement in Indonesia the minimum standards contained in Action 14 of the OECD BEPS2 project. PmK-49 entered into force on 26 April 2019, providing precise procedures and timelines for the implementation of the MAP. PMK-49 also includes a procedure for a taxpayer to request the revocation of the map request.
The DGT may reject an application for revocation in certain circumstances. Although no significant progress has been made in the early years of its implementation, the submission of ABS and MAP applications has gained momentum since 2016 following the publication by the OECD/G20 of the final reports on the 15-Point Action Plan to Combat BEPS. Growth has also increased due to Indonesia`s active participation in BEPS as a member of the OECD/G20 Inclusive Framework (IF). This is in particular in line with Action 14 of the BEPS Action Plan, which reflects countries` commitment to make dispute settlement mechanisms more effective through the implementation of a minimum standard of dispute settlement (including specific measures to remove barriers) and an effective and efficient mutual understanding mechanism. The plan also provides for the establishment of a monitoring mechanism to ensure that these obligations are effectively met. The following conditions may cause disagreement in the MAP: If a MAP has been met to provide tax relief to taxpayers, it is issued in the country (by amending corporate tax returns, tax notice letters, tax notice letters, opposition decision letters, amending opposition decision letters, opposition decision letters, etc.). Although the tax refund application usually follows normal procedures, an audit process (in accordance with Regulation No. 187/PMK.03/2015 of the Ministry of Finance on guidelines for the refund of taxes that should not have been paid, or PMK-187) is carried out when the MAP is issued by an amendment to a tax assessment letter. However, such an audit process is not expected to be as comprehensive as a tax audit. The limitation period expires and negotiations do not result in a PMK-49 agreement grants DGT the right to cancel a MAP process if the information collection processes are not followed. Driven by the changing regulatory framework and DGT`s ever-increasing annual tax revenue target, multinationals regularly face TP litigation and related double taxation issues.
Agreement not concluded before the end of DGT`s 24-month trading period Felic Setiawan is Director of Transfer Pricing at GNV Consulting Services. He specialises in advising multinational enterprises on the design and implementation of their transfer pricing policies, providing documentary support and participating in transfer pricing audits and dispute settlement proceedings. Type of communication with the competent authority of the tax treaty partner Since then, the Ministry of Finance (MoF) and the DGT have issued a number of related regulations. In recent years in particular, a number of transfer pricing rules have been introduced to align national rules with the OECD/G20 BPS Action Plan. Partners, International Tax and Transaction Services — Transfer Pricing, PT Ekasurya Yasa Consult The latest publication of Presidential Decree No. 77 (2019) ratified the Multilateral Instrument (MLI) on 12 November 2019. The MI is a multilateral agreement that implements the changes agreed in the beps project. Article 17 of the MLI with respect to these adjustments has also allowed the tax authorities of partner countries to unilaterally make the corresponding transfer pricing adjustments and to ensure that partner countries grant access to a MAGP for offsetting cases, even though the relevant tax treaty does not contain Article 9, paragraph 2 of the OECD Model Convention.
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