26 Mar 2018
TP Docs Series:
Even looks easy, but many clients still ask, what is the definition of Related Party?
This is my second article regarding the understanding Related Party.
Action 13 of OECD for BEPS mentioned about the company has the responsibility to provide Master File, Local File and Country by Country Report (CbCR) if any related party transactions. The above requirement is a compulsory if the company and the transactions fulfilled the threshold for criteria to prepare TP Documentations, as I mentioned in the previous article:
For some taxpayers, it will be quite difficult to consider whether they have related party between the companies or companies with individuals.
The most broadest definition about Related Party can be based on Accounting Principle (PSAK No.7 year 2015, revision).
In practice, checking at the disclosure at in the audit report is recommended to check if any related party issue.
Please do not hesitate to prepare TP Docs, if you find any information concerning the ‘Related Party issued’ in the Audit Report, unless you have a strong reason to prove you do not have any related party.
Agung Tjahjady SH, CLA, CPA, MM, BKP (Managing Partner)
Registered Tax Consultant, Advocate
+62 816 825 348
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