18 Apr 2017
Catenaccio ala TP Docs
For soccer mania, catenaccio is a familiar word in soccer game. Catenaccio or the chain is a tactical system in soccer with a strong emphasis on defence. In Italian, catenaccio means “door-bolt” / (‘grendel’ in bahasa) which implies a highly organized and effective backline defence focused on nullifying opponents’ attacks and preventing goal-scoring opportunities (source: https://en.m.wikipedia.org/wiki/catenaccio).
Per MOF No.213/PMK.03/2016, taxpayers that having affiliated transaction should be prepared Transfer Pricing Documentations (TP Docs). I have written the article on threshold for taxpayers who have the obligation to prepare TP Docs in my previous article (link: http://tax-legal.id/update/new-tax-regulation-on-transfer-pricing-issues/60).
Tax offices may ask the 2016 TP Docs after the period to file the Corporate Tax Return i.e. April 30, 2017. They can test and review (‘attack’) the logical reasoning and the supporting comparable data in the TP Docs.
In order to defense that affiliated transactions based on fair market independent value, the taxpayers should prepare:
The above 3 reports, Master File, Local File and CBCR is part of Catenaccio in defending the affiliated transactions, as arm’s length price. One and anothers are strongly related and as a whole defensive strategy. TP Docs is an art like strategy in soccer. Soccer composition strategy can be 4-3-3, 4-4-2, WM, total football, tiki-taka or even 1-3-5-2, where a 'goalie' become as a sweeper. There is no a fixed formula how to prepare a good TP Docs.
TP Docs is not a science but an art!!
Agung Tjahjady SH, CPA, MM, BKP
Registered Tax Consultant, Advocate
0816 825 348
BVD Oriana User