Study of Special Relationship & Transfer Pricing in Indonesia

Abstract

Transfer pricing is currently an important issue to be handled seriously by the Directorate General of Taxes in Indonesia, because the tax is the main income of the State, which is not only related to budget but also needs in the economic sector, so it needs clear rules, especially in handling multinational companies, which have special relations with domestic and foreign taxpayers as source countries. A study of the special relationship in taxation is defined as a business relationship between two or more taxpayers and ultimately results in less payable income tax than it should be. This special relationship includes business, employment, ownership or equity participation, control, either through management or the use of technology. Transfer pricing is often misused by business actors, by conducting transactions with an unreasonable value, despite all that, actually between the seller and the buyer have made a real price agreement, because the price paid by the buyer taxpayer to the seller's taxpayer does not match written. This is due to avoid paying high-income taxes. The research method is a systematic investigation to increase the amount of knowledge, it is also a systematic and organized attempt to investigate certain problems that require answers. This research is qualitative, which intends to understand the phenomena experienced by research subjects such as behavior, perception, motivation, action and others holistically, and by means of descriptions in the form of words and language, in a special natural context. and by making use of various natural methods. This type of research is normative, which is commonly referred to as doctrinal legal research or also called library research. It is called doctrinal law research because this research is only aimed at written regulations so that the research is very closely related to the library because this normative law will require secondary data in the library. Transfer prices are a systematic manipulation of prices with the aim of reducing artificial profits, making it appear as if the company is losing money, avoiding taxes or duties in a country. Therefore, it is necessary to have a transfer price agreement between the taxpayer and the Directorate General of Taxes regarding the fair selling price of the products produced to parties who have a special relationship. This is to reduce the occurrence of transfer pricing misuse by Multi-National companies. What has been agreed between the taxpayer and the Directorate General of Taxes is the selling price of the products produced (fair value) and the number of royalties and so on.