Title: The Essence of Increasing Honesty in Describing the Principles of Fairness of Transfer Pricing
Author: Suparno
Affiliations : Masters Program in Accounting, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
This research aims to describe the reasons, process, suitability and recommendations for transfer pricing practices carried out by PT. Sura Indah Wood Industries and PT. X by applying the arm's length principles that apply in Indonesia. This research was conducted using descriptive qualitative research methods. The research approach used is a case study approach to identify transfer pricing cases carried out by PT. Sura Indah Wood Industries and PT. X. The data collection process was carried out by conducting interviews and documentation. The analysis technique used is descriptive analysis and pattern matching based on empirical events with predicted patterns. The research results revealed that the reason PT. Sura Indah Wood Industries and PT. X Performing a practice transfer pricing because of the insistence from the parent company to make efficiency and optimize the company's profits. The transfer pricing process carried out by both companies is the same, namely complying with the arm's length principles that apply in Indonesia in PMK No.213/PMK.03/2016. Suitability of transfer pricing practices carried out by PT. Sura Indah Wood Industries and PT. The 36 of 2008 Article 18 to carry out an advance pricing agreement (APA) before carrying out transfer pricing practices. Due to the lack of strict regulations regarding transfer pricing practices in Indonesia, this has an impact on the large element of subjectivity in justifying violations in transfer pricing, so it is necessary to re-evaluate the regulations regarding transfer pricing to be able to provide clarity and firmness.
Keywords: Transfer pricing, Arm's Length Principles, Honesty, and Justification
Sources: http://repository.unair.ac.id/97262/
