Revokes 213/PMK.03/2016, 49/PMK.03/2019, 22/PMK.

03/2020

Type: REGULATION (PER)

By: THE MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA

Number: 172 YEAR 2023

Date: 29 DECEMBER 2023 (JAKARTA)

Title: IMPLEMENTATION OF ARM'S LENGTH PRINCIPLE IN

TRANSACTION AFFECTED BY SPECIAL RELATIONSHIP

BY THE GRACE OF THE ALMIGHTY GOD

THE MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,

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Considering:

a. whereas to provide fairness, legal certainty, and facilitation in the right

implementation and obligation fulfillment in the field of taxation related to the
transaction affected by special relationship, it is necessary to conduct
adjustments to the regulation on the implementation of arm’s length principle in
transaction affected by special relationship;

b. whereas regulation on the type of documents and/or additional information

obligated to be kept by the taxpayer conducting transaction with the parties that
have special relationship and procedure for its management as regulated in
Regulation of the Minister of Finance Number 213/PMK.03/206 regarding The
Types Of Additional Documents And/Or Information That Must Be Maintained
By Taxpayers Conducting Transactions With Related Parties, And The
Procedures For Their Management, procedure for the implementation of mutual
agreement procedure as regulated in Regulation of The Minister of Finance
Number 49/PMK.03/2019 regarding Procedure For The Implementation Of
Mutual Agreement Procedure, and procedure for formation and implementation
of advance pricing agreement as regulated in Regulation of The Minister of
Finance Number 22/PMK.03/2020 regarding Procedure For Formation And
Implementation Of Advance Pricing Agreement have not accommodated the
needs as referred to in letter a and therefore it is necessary to be replaced;

c. Whereas based on considerations as referred to in letter a and letter b as well

as to implement Article 44E paragraph (2) letter d of Law Number 6 Year 1983
regarding General Tax Provisions And Procedures as amended several times
most recently by Law Number 7 Year 2021 regarding Harmonization Of
Taxation Regulations, the provision of Article 2 of Law Number 8 Year 1983
regarding Value Added Tax On Goods And Services And Sales Tax On Luxury
Goods as amended several times most recently by Law Number 7 Year 2021
regarding Harmonization Of Taxation Regulations, Article 11 paragraph (3) of
Government Regulation Number 50 Year 2022 regarding Procedures For
Taxation Rights Implementation And Obligations Fulfillment, and the provision of
Article 37 and Article 47 of Government Regulation Number 55 Year 2022
regarding Adjustment Of Regulation In The Field Of Income Tax, it is necessary

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 to stipulate Regulation of The Minister of Finance regarding Implementation of
Arm’s Length Principle in Transaction Affected by Special Relationship;

In view of:

1. Article 17 paragraph (3) of 1945 Constitution of the Republic of Indonesia;

2. Law Number 6 Year 1983 regarding General Tax Provisions And Procedures
(State Gazette of the Republic of Indonesia Year 1983 Number 49, Supplement
to State Gazette of the Republic of Indonesia Number 3262) as amended
several times most recently by Law Number 7 Year 2021 regarding
Harmonization Of Taxation Regulations (State Gazette of the Republic of
Indonesia Year 2021 Number 246, Supplement to State Gazette of the Republic
of Indonesia Number 6736);

3. Law Number 7 Year 1983 regarding Income Tax (State Gazette of the Republic
of Indonesia Year 1983 Number 50, Supplement to State Gazette of the
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Republic of Indonesia Number 3263) as amended several times most recently
by Law Number 7 Year 2021 regarding Harmonization Of Taxation Regulations
(State Gazette of the Republic of Indonesia Year 2021 Number 246,
Supplement to State Gazette of the Republic of Indonesia Number 6736);

4. Law Number 8 Year 1983 regarding Value Added Tax On Goods And Services
And Sales Tax On Luxury Goods (State Gazette of the Republic of Indonesia
Year 1983 Number 51, Supplement to State Gazette of the Republic of
Indonesia Number 3264) as amended several times most recently by Law
Number 7 Year 2021 regarding Harmonization Of Taxation Regulations (State
Gazette of the Republic of Indonesia Year 2021 Number 246, Supplement to
State Gazette of the Republic of Indonesia Number 6736);

5. Law Number 17 Year 2003 regarding State Finance (State Gazette of the
Republic of Indonesia Year 2003 Number 47, Supplement to State Gazette of
the Republic of Indonesia Number 4286);

6. Law Number 39 Year 2008 regarding State Ministries (State Gazette of the
Republic of Indonesia Year 2008 Number 166, Supplement to State Gazette of
the Republic of Indonesia Number 4916);

7. Government Regulation Number 50 Year 2022 regarding Procedures For

Taxation Rights Implementation And Obligations Fulfillment (State Gazette of
the Republic of Indonesia Year 2022 Number 226, Supplement to State Gazette
of the Republic of Indonesia Number 6834);

8. Government Regulation Number 55 Year 2022 regarding Adjustment Of

Regulation In The Field Of Income Tax (State Gazette of the Republic of
Indonesia Year 2022 Number 231, Supplement to State Gazette of the Republic
of Indonesia Number 6836);

9. Presidential Regulation Number 57 Year 2020 regarding Ministry Of Finance

(State Gazette of the Republic of Indonesia Year 2020 Number 98);

10. Regulation of The Minister of Finance Number 118/PMK.01/2021

regarding Organization and Work Procedure for The Ministry of Finance
(Official Gazette of The Republic of Indonesia Year 2021 Number 1031)

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 as amended several times most recently by Regulation of The Minister of
Finance Number 135 Year 2023 regarding Second Amendment to
Regulation of the Minister of Finance Number 118/PMK.01/2021
regarding Organization and Work Procedure for The Ministry of Finance
(Official Gazette of The Republic of Indonesia Year 2023 Number 977);

HAS DECIDED:

To stipulate:

REGULATION OF THE MINISTER OF FINANCE REGARDING IMPLEMENTATION

OF ARM'S LENGTH PRINCIPLE IN TRANSACTION AFFECTED BY SPECIAL
RELATIONSHIP.

CHAPTER I
GENERAL PROVISIONS

Article 1
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Referred to herein as:

1. Law regarding Income Tax shall be Law Number 7 Year 1983 regarding Income
Tax as amended several times most recently by Law Number 7 Year 2021
regarding Harmonization Of Taxation Regulations.

2. Law regarding Value Added Tax On Goods And Services And Sales Tax On
Luxury Goods shall be Law Number 8 Year 1983 regarding Value Added Tax On
Goods And Services And Sales Tax On Luxury Goods as amended several
times most recently by Law Number 7 Year 2021 regarding Harmonization Of
Taxation Regulations.

3. Law regarding General Tax Provisions And Procedures shall be Law Number 6
Year 1983 regarding General Tax Provisions And Procedures as amended
several times most recently by Law Number 7 Year 2021 regarding
Harmonization Of Taxation Regulations.

4. Transfer Price shall be the price in a transaction affected by a special

relationship.

5. Affiliation Party shall be the party having a special relationship with one another.

6. Affiliation Transaction shall be the transaction conducted by a taxpayer with an

Affiliation Party.

7. Transaction Affected by Special Relationship shall be the transaction including

Affiliation Transaction and/or transaction conducted between parties having no
special relationship, however The Affiliation Party of one or both parties
conducting the transaction shall determine the counterparty and transaction
price.

8. Independent Transaction shall be a transaction conducted between parties

having no special relationship and not affected by a special relationship.

9. Transfer Pricing hereinafter shall be referred to as Transfer Pricing shall be

pricing in the Transaction Affected by Special Relationship.

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 10. Arm's Length Principle/ALP Not Affected by Special Relationship hereinafter
shall be referred to as Arm's Length Principle shall be the principle applied in
healthy business practices which is conducted as Independent Transaction.

11. Audit shall be a series of activities to collect and process data, information,
and/or evidences conducted in objective and professional manner based on an
audit standard to test compliance of taxation obligation fulfillment and/or other
objectives in the context of implementing the provisions of laws and regulations
of taxation.

12. Transfer Pricing Documents shall be the documents organized by the taxpayer
that contains data and/or information to support that transaction conducted with
the party having special relationship has been in accordance with the Arm’s
Length Principle.

13. Taxpayer shall be an individual or entity, including taxpayer, withholders, and

tax collector having rights and obligation of taxation in accordance with the
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provisions of laws and regulations of taxation.

14. Business Group shall be a group of tax subjects conducting business activities
consisting of the parties having special relationship.

15. Double Taxation Avoidance Agreement shall be an agreement between The

Government of Indonesia and the government of a partner country or partner
jurisdiction to prevent imposition of double taxation and tax evasion.

16. Partner of Double Tax Avoidance Agreement shall be the country or jurisdiction
related to The Government of Indonesia in Double Tax Avoidance Agreement.

17. Tax Authority of Partner of Double Tax Avoidance Agreement shall be the
taxation authority in Partner of Double Tax Avoidance Agreement having
authority to implement provisions in Double Tax Avoidance Agreement.

18. Mutual Agreement Procedure/MAP hereinafter shall be referred to as Mutual

Agreement Procedure shall be an administrative procedure regulated in Double
Tax Avoidance Agreement to solve any issues arising in the implementation of
Double Tax Avoidance Agreement.

19. The Authorized Official related to the implementation of Mutual Agreement

Procedure hereinafter shall be referred to as the Authorized Official shall be
official in Indonesia or official in the Partner of Double Tax Avoidance
Agreement having authority to implement Mutual Agreement Procedure as
regulated in the Double Tax Avoidance Agreement.

20. Mutual Agreement shall be the result that has been agreed upon in the
implementation of Double Tax Avoidance Agreement by the Authorized Official
from The Government of Indonesia and Authorized Official from the government
of Partner of Double Tax Avoidance Agreement in connection with the Mutual
Agreement Procedure that has been implemented.

21. Decision Letter of Mutual Agreement shall be the decision letter issued to follow
up the agreement in Mutual Agreement.

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 22. Indonesian Citizen submitting request for the implementation of Mutual
Agreement Procedure hereinafter referred to as Indonesian Citizen shall be an
Indonesian Citizen based on the provisions of laws in the field of citizenship
becoming a domestic taxpayer of Partner of Double Tax Avoidance Agreement.

23. Applicants shall be domestic Taxpayers or Indonesian Citizens.

24. Advance Pricing Agreement/APA hereinafter referred to as Advance Pricing

Agreement shall be written agreement between Director General of Taxation
and Taxpayer or Tax Authority of Partner of Double Tax Avoidance Agreement
related to the taxpayers in their jurisdiction territory as referred to in Article 18
paragraph (3a) of Law regarding Income Tax to agree upon the criteria in
Transfer Pricing and/or determining advance fair price or fair profit.

25. Script of Advance Pricing Agreement shall be the document containing the
agreement between the Director General of Taxation and the domestic
Taxpayer concerning criteria in Transfer Pricing and advance Transfer Pricing in
accordance with Arm’s Length Principle during the period of advance pricing
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agreement as well as roll-back.

26. Unilateral Advance Pricing Agreement shall be Advance Pricing Agreement

between the Director General of Taxation and domestic Taxpayer.

27. Bilateral or Multilateral Advance Pricing Agreement shall be Advance Pricing

Agreement between the Director General of Taxation and 1 (one) or more
Authorized Officials of Partner of Double Tax Avoidance Agreement conducted
based on the request on domestic Taxpayer.

28. Period of Advance Pricing Agreement shall be the tax year included in Advance
Pricing Agreement in accordance with the request on the domestic Taxpayer or
in accordance with the Mutual Agreement at most 5 (five) tax years after the tax
year of Advance Pricing Agreement request submission.

29. Roll-back hereinafter referred to as Roll-back shall be enforcement of the

agreement results in Advance Pricing Agreement for the tax year before the
Advance Pricing Agreement Period.

30. Taxpayer Portal shall be a facility of the Taxpayer to carry out the rights and
fulfill the obligation of taxation electronically on the website of Directorate
General of Taxation.

CHAPTER II
SPECIAL RELATIONSHIP

Article 2

(1) Special relationship shall be the special relationship as regulated in:

a. Law regarding Income Tax; and

b. Law regarding Goods and Services Value Added Tax and Luxury Goods
Sales Tax.

(2) Special relationship as referred to in paragraph (1) shall be the condition of

dependence or attachment of one party with other parties as a result of:

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 a. capital ownership or participation;

b. control; or

c. family relationship by blood or consanguinity.

(3) Condition of dependence or attachment between one party and other parties as
referred to in paragraph (2) shall be a condition of one or more parties:

a. controlling other parties; or

b. not independent,

in running a business or conducting activities.

(4) Special relationship as a result of capital ownership or participation as referred

to in paragraph (2) letter a shall be deemed as existed in the event that:
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a. Taxpayer has direct or indirect capital participation at the minimum 25%
(twenty five percent) at other Taxpayers; or

b. relationship between Taxpayers with participation at the minimum of

25% (twenty five percent) at 2 (two) Taxpayers or more or relationship
between the last 2 (two) or more Taxpayers.

(5) Special relationship as a result of control as referred to in paragraph (2) letter b

shall be deemed as existed in the event that:

a. one party controlling other parties or one party is controlled by other

parties, directly and/or indirectly;

b. two parties or more are under the control of the same party directly
and/or indirectly;

c. one party controlling other parties or one party is controlled by other

parties through management or technology use;

d. there is a same person directly and/or indirectly involved or participated

in managerial or operational decision making at two parties or more;

e. the parties commercially or financially known or declared as the same

Business Group; or

f. one party declaring to have special relationship with other parties.

(6) Special relationship as a result of family relationship by blood or consanguinity

as referred to in paragraph (2) letter c shall be deemed as existed in the event
that there is a family relationship both by blood or consanguinity in a direct
and/or to the side lineage of one degree.

CHAPTER III
IMPLEMENTATION OF ARM'S LENGTH PRINCIPLE

Part One

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 Arm’s Length Principle

Article 3

(1) The Taxpayer shall be obligated to implement Arm’s Length Principle in the
rights implementation and obligation fulfillment in the field of taxation related to
the Transaction Affected by Special Relationship.

(2) The Arm’s Length Principle as referred to in paragraph (1) shall be implemented
for fair Transfer Pricing.

(3) Arm’s Length Principle as referred to in paragraph (2) shall be implemented by

comparing the condition and indicator of the price of Transaction Affected by
Special Relationship with the condition and indicator of the price of the same or
similar Independent Transaction that is equal or equivalent.

(4) Transfer Price as referred to in paragraph (2) shall meet Arm’s Length Principle
in the event that the Transfer Price indicator value is equal with Independent
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Transaction price indicator value.

(5) The price indicator as referred to in paragraph (4) may be in the form of
transaction price, gross profit, or net operation profit based on certain absolute
value or ratio value.

Part Two
Implementation of Arm’s Length Principle in
Transaction Affected by Special Relationship

Section 1
General Guideline

Article 4

(1) Implementation of Arm’s Length Principle as referred to in Article 3 paragraph

(3) shall be obligated to be conducted:

a. based on the actual condition;

b. during Transfer Pricing and/or Transaction Affected by Special

Relationship; and

c. in accordance with the staging of implementation of Arm’s Length

Principle.

(2) Implementation of Arm’s Length Principle as referred to in paragraph (1) must

be conducted separately for every type of Transaction Affected by Special
Relationship.

(3) In the event that there are two or more types of Transactions Affected by
Special Relationship interrelated and affect one another in Transfer Pricing and
therefore separate implementation of Arm’s Length Principle as referred to in
paragraph (2) cannot be conducted in reliable and accurate manner, the
implementation of Arm’s Length Principle may be conducted by combining two
or more types of Transaction Affected by such Special Relationship.

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 (4) The stage of implementation of Arm’s Length Principle as referred to in
paragraph (1) letter c shall include:

a. identifying Transaction Affected by Special Relationship and Affiliation

Parties;

b. conducting analysis of industry related to the business activities of the

Taxpayer, including to identify factors influencing business performance
in the industry;

c. identifying commercial and/or financial relationship between the

Taxpayer and Affiliation Party by conducting analysis upon transaction
condition;

d. conducting comparability analysis;

e. determining the method of Transfer Pricing; and

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f. applying the method of Transfer Pricing and determining the fair
Transfer Price.

(5) Implementation of Arm’s Length Principle for certain Transaction Affected by

Special Relationship must be conducted by preliminary stage and stages as
referred to in paragraph (4).

(6) Certain Transaction Affected by Special Relationship as referred to in paragraph

(5) shall include:

a. services transaction;

b. transaction related to the use or right to use intangible assets;

c. financial transaction related to loan;

d. other financial transactions;

e. asset transfer transaction;

f. business restructuring; and

g. agreement on cost contribution.

Section 2
Identification of Transaction Affected by
Special Relationship and Affiliation Party

Article 5

Identification of Transaction Affected by Special Relationship and Affiliation Party as

referred to in Article 4 paragraph (4) letter a shall be the activity to identify:

a. Transaction Affected by Special Relationship conducted by Taxpayer;

b. the parties involved in Transaction Affected by Special Relationship as referred

to in letter a; and

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 c. form of special relationship as referred to in Article 2 paragraph (2).
Section 3
Analysis on Industry

Article 6

(1) Analysis on the industry as referred to in Article 4 paragraph (4) letter b shall be
an analysis to identify factors in the form of:

a. type of products in the form of goods or services;

b. industry and market characteristic, including market growth, market

segmentation, market cycle, technology, market size, market prospect,
supply chain, and value chain;

c. competitor and business competition level;

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d. efficiency level and superiority of Taxpayer location;

e. economy state influencing business performance in the industry,

including inflation level, economic growth, interest rate, and exchange
rate;

f. regulation influencing and/or determining success in the industry; and

g. factors excluding the factors as referred to in letter a to letter f

influencing business performance in the industry.

(2) The result of analysis on industry as referred to in paragraph (1) shall be used
in identifying the difference between the condition of Transaction Affected by
Special Relationship tested and the condition of transaction of potential
comparators during comparability analysis as referred to in Article 4 paragraph
(4) letter d.

Section 4
Analysis on Transaction Condition

Article 7

(1) Transaction condition as referred to in Article 4 paragraph (4) letter c shall be

the relevant economic characteristic, in the form of:

a. contractual provision;

b. function conducted, asset used, and risk borne;

c. characteristics of the product being transacted;

d. state of economy; and

e. business strategy run by the transacting parties.

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 (2) Contractual provision as referred to in paragraph (1) letter a shall be the
provision implemented and/or applied for the transacting parties in accordance
with the actual condition, both written or not written.

(3) Function as referred to in paragraph (1) letter b shall be an activity and/or

responsibility of the transacting parties in running business activities.

(4) Asset as referred to in paragraph (1) letter b shall be tangible asset, intangible
asset, financial asset, and/or non-financial asset having influence on value
creation including access and level of market control in Indonesia.

(5) Risk as referred to in paragraph (1) letter b shall be an impact of uncertainty

condition in achieving business objective borne by the transacting parties.

(6) Product characteristic as referred to in paragraph (1) letter c shall be the

specific characteristic of goods and services being transacted and significantly
influencing price determination in open market.
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(7) State of economy as referred to in paragraph (1) letter d shall be the state of
economy of:

a. the transacting parties; and

b. the market where the parties transact.

(8) Business strategy as referred to in paragraph (1) letter e shall be the strategy
implemented by the company in running business in open market.

Section 5
Comparability Analysis

Article 8

(1) Comparability analysis as referred to in Article 4 paragraph (4) letter d shall be

conducted to determine comparability between Independent Transaction and
Transaction Affected by Special Relationship upon transaction condition as
referred to in Article 7 paragraph (1).

(2) Independent Transaction shall be same or similar with Transaction Affected by

Special Relationship being tested as referred to in Article 3 paragraph (3)
insofar as:

a. condition of Independent Transaction is same or similar with the

condition of Transaction Affected by Special Relationship being tested;

b. condition of Independent Transaction is different from condition of

Transaction Affected by Special Relationship being tested, however the
condition differences does not influence the pricing; or

c. condition of Independent Transaction is different from condition of

Transaction Affected by Special Relationship being tested and the
condition differences influence pricing, however accurate adjustment
can be conducted accordingly upon the Independent Transaction to
eliminate material impact of the condition differences on the pricing.

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 (3) Comparability analysis as referred to in paragraph (1) shall be conducted
through the following stages:

a. understanding characteristic of Transaction Affected by Special

Relationship being tested based on the result of identification of
commercial and/or financial relationship between Taxpayer and
Affiliation Party as referred to in Article 4 paragraph (4) letter c and
determining business characteristic of each transacting party;

b. identifying the existence of Independent Transaction that serve as

reliable potential comparators;

c. determining the party that the price indicator of which is being tested in
the event that the Transfer Pricing method used is a profit-based
method;

d. identifying condition differences between Transaction Affected by

Special Relationship being tested and potential comparators;
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e. conducting accurate adjustment properly upon potential comparators to
eliminate material impact of condition differences as referred to in letter
d to transaction price indicator; and

f. determining Independent Transaction becoming the selected

comparators.

(4) The party that the price indicator of which is being tested as referred to in
paragraph (3) letter c shall be the party in Transaction Affected by Special
Relationship having simpler function, asset, and risk by considering:

a. implementation of Transfer Pricing method; and

b. data availability,

that are the most reliable and usable.

(5) Comparators as referred to in paragraph (3) letter f may be in the form of

internal comparators or external comparators.

(6) Internal comparator as referred to in paragraph (5) shall be the transaction

between independent parties and:

a. Taxpayers; or

b. Affiliation Parties which are the counterparties.

(7) External comparators as referred to in paragraph (5) shall be transactions

between independent parties other than internal comparators.

(8) In the event that internal comparator and external comparator with the same
comparability and reliability level are available, and therefore the internal
comparator shall be selected and used as comparator.

(9) In the event that more than one external comparators with the same
comparability and reliability level are available, the external comparator

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 originating from the same country or jurisdiction with the parties being tested
shall be selected and used as comparator.

Section 6
Method of Transfer Pricing

Article 9

(1) Method of Transfer Pricing at the stage of Arm’s Length Principle

implementation as referred to in Article 4 paragraph (4) letter e may be in the
form of:

a. method of price comparison between independent parties (comparable

uncontrolled price method);

b. resale price method;

c. cost plus method; or

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d. other methods, including:

1. profit split method;

2. transactional net margin method;

3. comparable uncontrolled transaction method;

4. method in tangible asset and intangible asset valuation; or

5. method in business valuation.

(2) Methods as referred to in paragraph (1) shall be selected based on accuracy

and reliability of the method, which is assessed from:

a. conformity of Transfer Pricing method with the characteristic of

Transaction Affected by Special Relationship being tested and the
characteristics of business of the transacting parties;

b. strengths and weaknesses of every method that may be applied;

c. availability of Independent Transaction as the reliable comparators;

d. comparability level between Transaction Affected by Special

Relationship and Independent Transaction as comparator; and

e. accuracy of the prepared adjustment in the context of any condition

differences between Transaction Affected by Special Relationship and
Independent Transaction as comparator.

(3) Comparable uncontrolled price method as referred to in paragraph (1) letter a

suitable for the characteristic of Transaction Affected by Special Relationship
shall be as follows:

a. commodity product transaction; and

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 b. goods and services transaction with the same or similar goods and
services characteristics with goods and services characteristics in
Independent Transaction under comparable conditions.

(4) Resale price method as referred to in paragraph (1) letter b suitable for
characteristics of Transaction Affected by Special Relationship and business
characteristics of the transacting parties shall be as follows:

a. Transaction Affected by Special Relationship is conducted by involving

distributor or reseller conducting resale of goods or services to the
independent parties or Affiliation Parties with the price that has fulfilled
Arm’s Length Principle; and

b. distributor or reseller as referred to in letter a does not bear significant

business risks, not have a unique and valuable contribution to
Transaction Affected by Special Relationship, or not provide significant
added value to the goods or services being transacted.
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(5) Cost plus method as referred to in paragraph (1) letter c suitable for
characteristic of Transaction Affected by Special Relationship and business
characteristics of the transacting parties shall be as follows:

a. Transaction Affected by Special Relationship is conducted by involving

manufacturer or service provider purchasing raw material and/or other
production factors from the independent parties or Affiliation Parties with
the price that has fulfilled Arm’s Length Principle; and

b. manufacturer or service provider as referred to in letter a does not bear

significant business risks, not have a unique and valuable contribution to
Transaction Affected by Special Relationship.

(6) Profit split method as referred to in paragraph (1) letter d number 1 suitable for
the characteristic of Transaction Affected by Special Relationship and business
characteristics of the transacting parties shall be as follows:

a. Transaction Affected by Special Relationship is conducted by the parties

having unique and valuable contributions to Transaction Affected by
Special Relationship;

b. business activities of the transacting parties are highly integrated

business activities and therefore contribution of each transacting party
cannot be analyzed separately; and

c. the transacting parties share the assumption of economically significant

risks or separately assume closely related risks.

(7) Transactional net margin method as referred to in paragraph (1) letter d number
2 may be selected insofar as the reliable and comparable comparators at price
and gross profit level are not available and not suitable for the characteristic of
Transaction Affected by Special Relationship and business characteristics of the
transacting parties shall be as follows:

a. Transaction Affected by Special Relationship is conducted by one of the

parties or the parties not having a unique and valuable contribution to
Transaction Affected by Special Relationship;

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 b. business activities of the transacting parties are non-highly integrated
business activities; and

c. the transacting parties are not sharing of the assumption of

economically significant risks or separately not assuming closely related
risks.

(8) Comparable uncontrolled transaction method as referred to in paragraph (1)

letter d number 3 suitable for characteristic of Transaction Affected by Special
Relationship which is commercially assessed based on certain basis, in the
form of interest rate, discount, provision, commission, and percentage of royalty
on sales or operations profit.

(9) Method in tangible asset and intangible asset valuation as referred to in

paragraph (1) letter d number 4 suitable for characteristic of Transaction
Affected by Special Relationship in the form of:
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a. tangible asset and/or intangible asset transfer transaction;

b. tangible asset lease transaction;

c. transaction related to the use or right to use intangible assets;

d. financial asset transfer transaction;

e. transaction of transfer of right related to the mining area business and/or

other similar rights; and

f. transaction of transfer of right related to the plantation, forestry

businesses, and/or other similar rights.

(10) Method in business valuation as referred to in paragraph (1) letter d number 5

suitable for characteristic of Transaction Affected by Special Relationship in the
form of:

a. transaction related to business restructuring including transfer of

function, asset, and/or risks between Affiliation Parties;

b. transaction of asset transfer other than cash to the company,

partnerships, and other entities as shares substitutes or capital
participation (inbreng); and

c. transaction of asset transfer other than cash to shareholder, associate,

or member of a company, partnership, or other entities.

(11) Unique and valuable contribution as referred to in paragraph (6) letter a shall be
the contribution which is:

a. more significant from the contribution provided by the independent party

in comparable conditions; and

b. becoming the main source of actual or potential economic benefit in

business activities.

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 (12) In the event that the method as referred to in paragraph (1) letter a or
paragraph (1) letter d number 3 and other methods may be used or have the
same reliability, and therefore the method as referred to in paragraph (1) letter a
or paragraph (1) letter d number 3 is more prioritized than the other methods.

(13) In the event that the method as referred to in paragraph (1) letter b, paragraph
(1) letter c, paragraph (1) letter d number 1, and paragraph (1) letter d number 2
may be used and have the same reliability, and therefore the method as
referred to in paragraph (1) letter b or paragraph (1) letter c is more prioritized
than the method as referred to in paragraph (1) letter d number 1 and
paragraph (1) letter d number 2.

Section 7
Implementation of Method of
Transfer Pricing and
Fair Transfer Pricing

Article 10
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(1) Comparable uncontrolled price method as referred to in Article 9 paragraph (1)
letter a shall be conducted by comparing price between Transaction Affected by
Special Relationship being tested and Independent Transaction.

(2) Resale price method as referred to in Article 9 paragraph (1) letter b shall be
conducted by deducting fair gross profit for distributor or reseller to the resale
price.

(3) Cost plus method as referred to in Article 9 paragraph (1) letter c shall be
conducted by adding a level of fair gross profit of manufacturer or service
provider to the cost of goods sold for goods and services.

(4) Profit split method as referred to in Article 9 paragraph (1) letter d number 1
shall be conducted by splitting joint profit of the relevant transaction based on
function, asset, risk, and/or contribution of the parties in Transaction Affected by
Special Relationship.

(5) Transactional net margin method as referred to in Article 9 paragraph (1) letter d
number 2 shall be conducted by comparing the level of net operating profit of
parties being tested with the level of net operation profit of the comparators.

(6) Method of comparable uncontrolled transaction as referred to in Article 9

paragraph (1) letter d number 3 shall be conducted by comparing price or profit
of transaction to certain basis between Transaction Affected by Special
Relationship and Independent Transaction.

(7) Method in tangible asset and intangible asset valuation as referred to in Article
9 paragraph (1) letter d number 4 shall be conducted in accordance with the
provisions of laws and regulations regulating procedure for valuation for the
taxation purpose.

(8) Method in business valuation as referred to in Article 9 paragraph (1) letter d

number 5 shall be conducted in accordance with the provisions of laws and
regulations regulating procedure for valuation for taxation purpose.

Article 11

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 (1) Joint profit splitting as referred to in Article 10 paragraph (4) may be conducted
in the level of gross profit or net operation profit.

(2) Joint profit level splitting as referred to in paragraph (1) shall be determined by
level of function integration, asset use, and/or significant business risk division
economically from the transacting parties in Transaction Affected by Special
Relationship.

(3) Joint profit as referred to in paragraph (1) may be divided using:

a. contribution-based approach (contribution analysis); or

b. residual profit-based approach (residual analysis).

(4) Contribution analysis as referred to in paragraph (3) letter a shall be conducted

by dividing joint profit as referred to in paragraph (2) based on the dividing
factor.
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(5) Residual analysis as referred to in paragraph (3) letter b shall be conducted by
separating joint profit as referred to in paragraph (1) to:

a. profit derived from the contribution of each transacting party that may be
obtained reliably by the comparator in the Independent Transaction; and

b. the remaining joint profit after being deducted by profit as referred to in

letter a, that may be valued as positive or negative.

(6) The remaining joint profit as referred to in paragraph (5) letter b shall be divided
based on the dividing factor.

(7) The dividing factor as referred to in paragraph (4) and paragraph (6) may be in
the form of:

a. percentage of profit division by the parties in the comparable

Independent Transaction; or

b. Relative value or contribution percentage of the transacting parties in

the Transaction Affected by Special Relationship, in the event that data
as referred to in letter a is not available.

(8) The dividing factor as referred to in paragraph (7) must fulfill the following
criteria:

a. free of Transaction Affected by Special Relationship;

b. capable to be verified; and

c. supported by comparison data or internal data of the transacting parties

and/or other relevant data.

Article 12

(1) Indicator value of Independent Transaction price as referred to in Article 3

paragraph (4) may be in the form of:

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 a. arm's length point; or

b. arm's length range.

(2) Indicator value of Independent Transaction price as referred to in paragraph (1)

shall be formed based on single year comparison data.

(3) Indicator value of Independent Transaction price as referred to in paragraph (1)

may be formed based on multiple year comparison data insofar as it may
increase comparability.

(4) Single year or multiple year comparison data as referred to in paragraph (2) and
paragraph (3) shall be available and closest data at the time of the Transfer
Pricing and/or the occurrence of the Transaction Affected by Special
Relationship.

(5) Arm’s length point as referred to in paragraph (1) letter a shall be price indicator
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point formed from one or more comparators having the same price indicator
value.

(6) Arm’s length range as referred to in paragraph (1) letter b shall be the price
indicator range formed from two or more comparators having different price
indicator value, in the form of:

a. minimum value up to maximum value (full range), in the event that it is

formed from two comparators; or

b. quartile value one to quartile value three (interquartile range), in the

event that it is formed from three or more comparators.

(7) In the event that the Transfer Price does not fulfill Arm’s Length Principle as
referred to in Article 3 paragraph (4), Transfer Pricing shall be conducted as the
pricing in Independent Transaction using:

a. Arm’s length point;

b. the most accurate point in the arm’s length range in accordance with the
comparability; or

c. median in the arm’s length range, in the event that the most accurate
point as referred to in letter b cannot be determined.

Section 8
Preliminary Stage

Article 13

(1) Preliminary stage for service transaction as referred to in Article 4 paragraph (6)
letter a shall include proof that the services:

a. have actually been provided by the service provider and received by the
service recipient;

b. are needed by the service recipient;

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 c. provide economics benefit to the service recipient;

d. are not activity for shareholders interest or other ownership type which
capital is not divided upon shares (shareholder activity);

e. are not activity providing benefit to a party solely as a result that the
party is part of the Business Group (passive association);

f. are not duplication of activities that have been self-performed by the

Taxpayer;

g. are not services providing incidental benefit; and

h. in the event that on-call services are not the services that may be
immediately received from independent party without any prior on-call
contract.
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(2) Cost related to the services transaction not fulfilling proof that the services are
not activities for the shareholders interest or other ownership type which capital
is not divided upon shares (shareholder activity) as referred to in paragraph (1)
letter d, shall be in the form of:

a. services cost related to administration of parent entity, such as cost

related to the meeting of shareholders of parent entity, service cost
related to the issuance of shares issuance of parent entity, service cost
related to the shares record of parent entity in the stock exchange, and
service cost related to the management of parent entity;

b. services cost related to obligation of parent entity reporting, including

services cost of financial report preparation, services cost of audit report
preparation, and services cost of consolidation financial report
preparation of parent entity;

c. services cost related to acquisition of funds or capital used for

ownership transfer by parent entity;

d. services cost related to the compliance of parent entity to the prevailing

laws and regulations;

e. services cost related to shares ownership protection of parent entity in

the subsidiary companies; and

f. services cost related to the overall governance of the Business Group.

(3) Preliminary stage for the transaction related to the use or right to use intangible
assets as referred to in Article 4 paragraph (6) letter b shall include proof upon:

a. existence of intangible assets;

b. type of intangible asset;

c. value of intangible asset;

d. party having intangible asset legally;

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 e. party having intangible asset economically;

f. use or right to use intangible assets;

g. parties contributing and conducting activities of development,

enhancement, maintenance, protection, and exploitation of intangible
asset; and

h. economic benefit received by the party using intangible assets.

(4) Preliminary stage for financial transaction related loan as referred to in Article 4
paragraph (6) letter c shall include proof that the loan:

a. is conformed with the substance and actual condition;

b. is needed by the borrowers;

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c. is used to earn, collect, and maintain income in accordance with the
provisions of laws and regulations in the field of income tax;

d. fulfills loan characteristic, at the minimum in the form of:

1. The creditor acknowledges the loan in economic and legal

manner;

2. loan maturity date;

3. obligation to repay the loan principal;

4. payment according to the payment schedule that has been

determined both for loan principal and its return;

5. during the reception of the loan, the Borrower shall have the
ability to:

a) receive a loan from an independent creditor; and

b) repay the loan principal and loan return as an

independent debtor;

6. based on the loan agreement made in accordance with the

prevailing laws and regulations;

7. legal consequence in the event that the borrower fails to return

the loan principal and/or return; and

8. collection rights for the lender as an independent creditor; and

e. provides economic benefits to the loan receiver.

(5) Preliminary stage for other financial transactions as referred to in Article 4

paragraph (6) letter d shall include proof upon:

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 a. conformity of other financial transactions with the actual substance and
condition;

b. type of other financial transactions;

c. acknowledgment in economic and legal manner by the parties

conducting other financial transactions;

d. motives, objectives, and economic rationale of other financial

transactions; and

e. expected benefit of other financial transactions.

(6) Preliminary stage for asset transfer transaction as referred to in Article 4

paragraph (6) letter e shall include proof upon:

a. motives, objectives, and economic rationale of asset transfer

transaction;
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b. asset transfer in accordance with the actual substance and condition;

c. expected benefit of asset transfer; and

d. the asset transfer is the best choice from other available options.

(7) Preliminary stage for business restructuring as referred to in Article 4 paragraph

(6) letter f shall include the proof upon:

a. motives, objectives, and economic rationale of business restructuring;

b. business restructuring in accordance with the actual substance and

condition;

c. expected benefit of business restructuring; and

d. the business restructuring is the best choice from other available

options.

(8) Preliminary stage for agreement on cost contribution as referred to in Article 4

paragraph (6) letter g shall include proof that the agreement on cost
contribution:

a. is prepared as an agreement between the independent parties;

b. is required by the parties conducting the agreement; and

c. provides economic benefit to the parties conducting the agreement.

(9) Preliminary stage shall include proof upon benefit as referred to in paragraph
(1) letter c, paragraph (3) letter h, paragraph (4) letter e, paragraph (5) letter e,
paragraph (6) letter c, paragraph (7) letter c, paragraph (8) letter c in the form of
sales increase, cost decrease, protection of commercial position or fulfillment of
needs for other commercial activities including activities to earn, collect, and
maintain income.

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 Article 14

In the event that the Taxpayer cannot prove certain Transaction Affected by a Special
Relationship based on the preliminary stage as referred to in Article 13, the Transaction
Affected by Special Relationship shall not fulfill Arm’s Length Principle as referred to in
Article 3 paragraph (3).
Part Three
Implementation of Arm’s Length Principle in
Transaction Affected by Special Relationship upon
Domestic Taxpayer Fulfilling Provisions
As Permanent Establishment

Article 15

(1) In the event that a domestic Taxpayer conducting Transaction Affected by

Special Relationship fulfills the provision as permanent establishment as
regulated in the provision of laws and regulations concerning the determination
of permanent establishment, the domestic Taxpayer shall also be stipulated as
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a permanent establishment.

(2) Permanent establishment as referred to in paragraph (1) must submit all data
and/or information related to the transaction conducted by the Affiliation Party
overseas related to business or permanent establishment activities.

(3) Submission of all data and/or information related to transactions conducted by

Affiliation Party overseas as referred to in paragraph (2) shall be conducted in
accordance with the provisions of laws and regulations in the field of taxation.

(4) Data and/or information as referred to in paragraph (2) shall be used to

determine transaction value of permanent establishment as referred to in
paragraph (1).

(5) In the event that the permanent establishment is not fulfilling the provision as
referred to in paragraph (2), the transaction value shall be determined by
implementing Arm’s Length Principle.

(6) Taxation rights and obligations fulfillment which previously have been
implemented by domestic Taxpayer shall be calculated in the taxation rights and
obligation fulfillment of permanent establishment as referred to in paragraph (1).

(7) Taxation obligation fulfillment of permanent establishment as referred to in

paragraph (1) shall be conducted in accordance with the provision of laws and
regulations in the field of taxation.

CHAPTER IV
DOCUMENTATION OF IMPLEMENTATION OF
ARM’S LENGTH PRINCIPLE

Article 16

(1) The Taxpayer as referred to in Article 3 paragraph (1) shall be obligated to

organize and store documents containing data and/or information to support
that the transaction conducted with the party having special relationship has
complied with the Arm’s Length Principle.

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 (2) The documents containing data and/or information to support that the
transaction conducted with the party having special relationship has complied
with the Arm’s Length Principle as referred to in paragraph (1) shall be the
Document of Transfer Pricing which consist of:

a. master document;

b. local document; and

c. country-by-country report.

(3) The Taxpayer conducting Affiliation Transaction with:

a. gross turnover value of the previous tax year in one tax year is more
than Rp50,000,000,000.00 (fifty billion rupiah);

b. Affiliation Transaction value of the previous tax year in one tax year:
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1. more than Rp20,000,000,000.00 (twenty billion rupiah) for
tangible asset transaction; or

2. more than Rp5,000,000,000.00 (five billion rupiah) for each

service provision, interest payment, intangible asset utilization, or
other Affiliation Transactions; or

c. Affiliated Party located in countries or jurisdictions with income tax rates

lower than the income tax rate as referred to in provision of laws and
regulations in the field of income tax, shall be obligated to organize and
store Document of Transfer Pricing as referred to in paragraph (2) letter
a and letter b as the part of obligation to keep other documents as
referred to in provisions of laws and regulations in the field of taxation.

(4) Domestic Taxpayer which is the parent entity of a Business Group having
consolidation gross turnover at the minimum Rp 11,000,000,000,000.00 (eleven
trillion rupiah) in the tax year prior to the reported tax year shall be obligated to
organize and store Document of Transfer Pricing as referred to in paragraph (2)
letter a and letter b, and letter c as the part of obligation to store other
documents as referred to in provisions of laws and regulations in the field of
taxation.

(5) In the event that the domestic Taxpayer positioned as a constituent entity and
parent entity of a Business Group is a foreign tax subject, the Domestic
Taxpayer shall be obligated to submit a country-by-country report as referred to
in paragraph (2) letter c insofar as the country or jurisdiction of parent entity
domicile:

a. not require the submission of country-by-country reports;

b. not having an agreement with the Indonesian Government regarding

taxation information; or

c. having an agreement with the Indonesian Government regarding

taxation information exchange, however, country-by-country report
cannot be obtained by the Indonesian Government from the country or
jurisdiction.

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 (6) Limit of gross turnover value and Affiliation Transaction value as referred to in
paragraph (3) shall be calculated in an annualized manner in the event that the
tax year in which the gross turnover is obtained and/or the Affiliated Transaction
is conducted covers less than 12 (twelve) months period.

(7) In the event that the Taxpayer has Affiliation Transaction, however, it is not
obligated to organize and store Document of Transfer Pricing based on the
provision as referred to in paragraph (3), paragraph (4), or paragraph (5), the
Taxpayer remains to be obligated to fulfill provision as referred to in Article 3.

(8) In the event that the Taxpayer has obtained a permit from the Minister of
Finance to organize bookkeeping using a foreign language and other than
rupiah currency, the limit of money value in rupiah currency as referred to in
paragraph (3) and paragraph (4) shall be equivalent to the other than rupiah
currency value based on exchange rate value stipulated by the Minister of
Finance for tax calculation at the end of the tax year.
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(9) Gross turnover as referred to in paragraph (3), paragraph (4), and paragraph
(6) shall be the income received and/or obtained from business activities and
outside business activities after deducted by sales returns and deductions as
well as cash discounts, before deducted by costs of earning, collecting, and
maintaining income.

(10) Example of determination of the Taxpayer obligated to organize and store

Document of Transfer Pricing as referred to in paragraph (3), paragraph (4),
and paragraph (6) shall be set forth in Attachment letter A which constitutes an
inseparable part of this Ministerial Regulation.

Article 17

(1) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter a

and letter b, shall be obligated to be organized based on the data and
information available during the Affiliation Transaction.

(2) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter c

shall be obligated to be organized based on the data and information available
until the end of the tax year.

Article 18

(1) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter a

and letter b must be available within no later than 4 (four) months after the end
of the tax year.

(2) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter c

must be available within no later than 12 (twelve) months after the end of the
tax year.

(3) The Document of Transfer Pricing as referred to in paragraph (1) must be

attached by a statement letter concerning the available time of the Document of
Transfer Pricing signed by the parties providing the Document of Transfer
Pricing Determination.

Article 19

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 (1) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter a
and letter b shall be obligated to be summarized.

(2) Summary as referred to in paragraph (1) shall be obligated to be submitted as

an attachment of annual income tax returns for corporate for the relevant tax
year.

(3) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter c

shall be obligated to be submitted as an attachment of annual income tax
returns for corporate for the next tax year.

(4) Summary as referred to in paragraph (1) shall be prepared using the example
of format as set forth in Attachment letter B which constitutes an inseparable
part of this Ministerial Regulation.

Article 20
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(1) The domestic Taxpayer which is the parent entity as referred to in Article 16
paragraph (4) shall be the entity that:

a. not directly or indirectly having one or more other members in Business

Group;

b. having obligation to organize consolidation financial report based on the

effective financial accounting standard in Indonesia and/or based on
provision binding stock exchange issuer in Indonesia; and

c. not directly or indirectly owned by other constituent entity in Business

group or directly or indirectly owned other constituent entity, however,
the other constituent entity shall not be obligated to consolidate the
parent entity financial report.

(2) The Taxpayer as referred to in paragraph (1) is not allowed to appoint other
constituent entities for his replacement in fulfilling obligation of country-by-
country report submission, both in Indonesia or other jurisdictions.

Article 21

(1) Constituent entity as referred to in 16 paragraph (5) shall be:

a. every separate business entity that is a member of a multinational

Business Group and included in the consolidation financial report of the
parent entity for the purpose of financial report;

b. every business entity that is a member of a multinational Business

Group not included in the consolidation financial report solely due to
business size or materiality consideration; and/or

c. every permanent establishment of a business entity as referred to in

letter a or letter b insofar as the permanent establishment has separate
financial reports for the purpose of financial reporting, implementation of
provisions of laws and regulations, tax reporting, or for the purpose of
company management control.

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 (2) In the event that the parent entity of Business Group that is the foreign tax
subject has appointed another constituent entity overseas as the substitute of
the parent entity, the domestic Taxpayer as referred to in Article 16 paragraph
(5) shall not be obligated to submit country-by-country report insofar as it fulfills
the following provisions:

a. the domestic Taxpayer submits notification on other constituent entities

appointed as substitutes of the parent entity to the Director General of
Taxation; and

b. the country or jurisdiction where the other constituent entities appointed

as the substitute of the parent entity is domiciled shall:

1. requires country-by-country report submission; and

2. have a qualifying competent authority agreement as well as

country-by-country report can be obtained by the Indonesian
Government from a partner country or the partner jurisdiction.
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(3) Constituent entity appointed as substitute of the parent entity as referred to in
paragraph (2) shall be the only constituent entity appointed to substitute the
parent entity in submitting country-by-country report to the tax authority in the
country or jurisdiction of the appointed Business Group member is domiciled.

(4) In the event that there is more than one domestic Taxpayer that is the
constituent entity as referred to in Article 16 paragraph (5), the parent entity that
is the foreign tax subject may appoint one of the constituent entities that is the
domestic Taxpayer to submit country-by-country report to the Directorate
General of Taxation.

Article 22

(1) Parent entity that is the foreign tax subject as referred to in Article 16 paragraph
(5) shall be the entity that:

a. has directly or indirectly one or more other members in the Multinational

Business Group;

b. has obligation to organize consolidation financial report based on the

effective financial accounting standard or provision in the country or
jurisdiction of the parent entity is domiciled;

c. is not directly or indirectly owned by other constituent entities in the

Multinational Business group or directly or indirectly owned by other
constituent entities, however, the other constituent entity shall not be
obligated to consolidate financial report of the parent entity; and

d. has consolidation gross turnover in the tax year prior to the reported tax
year at the minimum:

1. equivalent to €750,000,000.00 (seven hundred fifty million euro)

based on the functional exchange rate of the parent entity in the
event that the country or jurisdiction where the parent entity is
domiciled does not require country-by-country report submission;
or

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 2. in the amount of consolidated gross turnover limit that becomes
the basis for determining the obligation of country-by-country
report submission as regulated in the country or jurisdiction
where the parent entity is domiciled.

(2) The country or jurisdiction where the parent entity is domiciled having no
agreement with the Indonesian Government concerning taxation information
exchange as referred to in Article 16 paragraph (5) letter b shall be the country
or jurisdiction where the parent entity is domiciled having international
agreement regulating taxation information exchange with Indonesian
Government, however, having no qualifying competent authority agreement).

(3) Condition of country-by-country report not able to be obtained as referred to in

Article 16 paragraph (5) letter c shall be caused by the inability to obtain country-
by-country report through information exchange automatically due to:

a. there is a postponement of country-by-country report exchange

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automatically caused by any matters other than the matters regulated in
qualifying competent authority agreement; or

b. there is a repetition failure to exchange country-by-country report

automatically with partner country or partner jurisdiction.

(4) In the event that there is a condition as referred to in paragraph (3), the
Taxpayer as referred to in Article 16 paragraph (5) must submit country-by-
country report within no later than 3 (three) months after the announcement of
the list of partner country or partner jurisdiction which country-by-country report
cannot be obtained.

(5) In the event that country-by-country report is not submitted within 3 (three)
months as referred to in paragraph (4), the Director General of taxation through
its authorized official in the field of information exchange shall have the
authority to demand the Taxpayer as referred to in Article 16 paragraph (5) to
submit country-by-country report.

Article 23

(1) Domestic taxpayer that is the member of Business Group or having Affiliation
Transaction included in the country-by-country report shall be obligated to
submit notification to the Directorate General of Taxation through Taxpayer
Portal.

(2) In the event that the Taxpayer as referred to in paragraph (1) has the obligation
of country-by-country report submission as referred to in Article 16 paragraph
(4) and paragraph (5), the Taxpayer shall be obligated to submit country-by-
country report at the same time with notification submission to Directorate
General of Taxation through Taxpayer Portal.

(3) Country-by-country report as referred to in paragraph (2) submitted by the

Taxpayer as referred to in Article 16 paragraph (4) shall be attached by country-
by-country report work paper.

(4) Notification as referred to in paragraph (1) and country-by-country report as

referred to in paragraph (2) shall be obligated to be submitted to the Directorate

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 General of Taxation within no later than 12 (twelve) months after the end of the
tax year.

(5) The notification submission as referred to in paragraph (1) and country-by-

country report submission as referred to in paragraph (2) shall be provided by
receipt.

(6) Receipt of country-by-country report submission as referred to in paragraph (5)

may be used as substitute of country-by-country report which must be attached
in annual income tax returns for corporate as regulated in Article 19 paragraph
(3).

(7) In the event that there is a mistake in country-by-country report submission, the
Director General of Taxation shall deliver notification to the Taxpayer concerning
the mistake in country-by-country report submission.

(8) Upon notification as referred to in paragraph (7) or upon own will, the Taxpayer
may submit revision on country-by-country report by re-submitting country-by-
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country report that has been revised.

Article 24

(1) Notification as referred to in Article 23 paragraph (1) shall contain statement on:

a. identification of domestic Taxpayer which is the parent entity;

b. identification of domestic Taxpayer which is not the parent entity; and

c. declaration on the obligation of country-by-country report submission.

(2) Notification as referred to in paragraph (1) shall be prepared in accordance with

the format example as set forth in Attachment letter C which constitutes an
inseparable part of this Ministerial Regulation.

Article 25

(1) Country-by-country report submitted by:

a. Taxpayer as referred to in Article 16 paragraph (4) shall be organized

based on data and information available until the end of the tax year of
the Taxpayer; or

b. Domestic taxpayer as referred to in Article 16 paragraph (5) shall be

organized based on data and information available until the end of the
tax year of the parent entity which is a foreign tax subject.

(2) Country-by-country report as referred to in paragraph (1) letter a must be

organized through the establishment of working papers country-by-country
report in the form of digital copies (softcopies) with the extension of the
extensible markup language (xml).

Article 26

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 (1) Director General of Taxation shall conduct country-by-country report exchange
automatically with a partner country or partner jurisdiction having qualifying
competent authority agreement).

(2) Implementation of country-by-country report exchange as referred to in

paragraph (1) shall be conducted by the authorized official in the field of
information exchange.

Article 27

In the context of the implementation of country-by-country report submission obligation

as referred to in Article 16 paragraph (5), the Director General of Taxation shall
announce the list of partner countries or partner jurisdictions having:

a. international agreement regulating taxation information exchange;

b. qualifying competent authority agreement; and

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c. qualifying competent authority agreement, however, country-by-country
report cannot be obtained as referred to in Article 22 paragraph (3),

in the website of Directorate General of Taxation at the end of the year or every
time any change occurred in the list of partner country or partner jurisdiction as
referred to in letter a, letter b, and letter c.

Article 28

Taxpayer not fulfilling obligations as referred to in Article 16, Article 17, Article 19, and
Article 23 shall be imposed by sanction in accordance with the provisions of laws and
regulations in the field of taxation.

Article 29

(1) Master document as referred to in Article 16 paragraph (2) letter a must contain
information concerning Business Group which at least as follows:

a. structure and ownership chart as well as the country or jurisdiction of

each member;

b. business activities performed;

c. intangible asset owned;

d. financial and financing activities; and

e. consolidation financial report of the parent entity and taxation

information related to Affiliation Transaction.

(2) Details and/or explanation of the information in the master document as

referred to in paragraph (1) shall at least contain information as set forth in
Attachment letter D which constitutes an inseparable part of this Ministerial
Regulation.

Article 30

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 (1) Local document as referred to in Article 16 paragraph (2) letter b must contain
information on Taxpayer which at least as follows:

a. identity and business activities performed;

b. information on Affiliation Transaction and Independent Transaction

conducted;

c. implementation of Arm’s Length Principle in accordance with the

provision as referred to in Article 4 paragraph (1);

d. financial information; and

e. non-financial events/incidents/facts influencing the forming of price or

profit rate.

(2) Details and/or explanation of information in local documents as referred to in

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paragraph (1) shall at least contain information as set forth in Attachment letter
E which constitutes an inseparable part of this Ministerial Regulation.

(3) In the event that the Taxpayer has more than one business activities with
different business characteristics, local document as referred to in paragraph
(1) must be presented in a segmented way in accordance with the business
characteristics owned.

Article 31

(1) Country-by-country report as referred to in Article 16 paragraph (2) letter c must

contain the following information:

a. allocation of income, paid taxes, and country-by-country business

activities or jurisdiction of all members of Business Group both domestic
and foreign, including name of country or jurisdiction, gross income,
profit (loss) before tax, income tax that has been deducted, collected or
self-paid, payable income tax, capital, accumulation of retained
earnings, number of permanent employees, and tangible assets other
than cash and cash equivalent; and

b. list of members of Business Group and country-by-country main

business activities or jurisdiction.

(2) Country-by-country report containing information as referred to in paragraph (1)

letter a shall be prepared using format example as set forth in Attachment letter
F which constitutes an inseparable part of this Ministerial Regulation.

(3) Country-by-country report containing the information as referred to in paragraph

(1) letter b shall be prepared using the format example as set forth in
Attachment letter G which constitutes an inseparable part of this Ministerial
Regulation.

(4) Information as referred to in paragraph (1) shall be used only in the context of
tax avoidance risk assessment.

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 (5) Prior to preparing country-by-country report as referred to in paragraph (1),
Taxpayer must prepare country-by-country report workpaper.

(6) Country-by-country report workpaper as referred to in paragraph (5) shall be

prepared using format example as set forth in Attachment letter H which
constitutes an inseparable part of this Ministerial Regulation.

Article 32

(1) Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter a

and letter b shall be obligated to be prepared by Taxpayer in Indonesian
language.

(2) Taxpayer may prepare Document of Transfer Pricing in foreign language after
obtaining permit from The Minister of Finance to organize bookkeeping in
foreign language and other than rupiah currency.

(3) In the event that the Taxpayer has obtained permit from The Minister of Finance
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as referred to in paragraph (2), Document of Transfer Pricing shall be prepared
in accordance with the foreign language mentioned in the permit of the said
bookkeeping organization and along with its translation in the Indonesian
language.

Article 33

Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter c shall be

received and managed particularly by the Director General of Taxation.

Article 34

(1) The Director General of Taxation shall have the authority to conduct request for
Document of Transfer Pricing as referred to in Article 16 paragraph (2) letter a
and letter b.

(2) Taxpayer shall be obligated to submit the Document of Transfer Pricing within
no later than 1 (one) month since the request submission as referred to in
paragraph (1) in the context of compliance supervision and Audit.

(3) Taxpayer shall submit Document of Transfer Pricing related to the request as
referred to in paragraph (1) within the period as regulated in the provisions of
laws and regulations in the field of taxation other than in the context of
compliance supervision and Audit.

Article 35

Taxpayer not fulfilling the obligation as referred to in Article 34 paragraph (2) shall be
imposed by sanction in accordance with the provisions of laws and regulations in the
field of taxation.

CHAPTER V
COMPLIANCE TESTING OF IMPLEMENTATION OF
ARM’S LENGTH PRINCIPLE

Article 36

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 (1) The Director General of Taxation shall have the authority to re-determine the
amount of income and/or deduction to calculate the amount of taxable income
through compliance testing of the implementation of Arm’s Length Principle.

(2) Compliance testing of the implementation of Arm’s Length Principle as referred

to in paragraph (1) shall include testing upon:

a. fulfillment of the provision of the organization of Document of Transfer

Pricing as referred to in Article 19, Article 29, Article 30, Article 34
paragraph (2), and Article 34 paragraph (3); and

b. implementation of Arm’s Length Principle as referred to in Article 3.

(3) To the Taxpayer fulfilling provisions as referred to in paragraph (2) letter a,

testing of the implementation of Arm’s Length Principle as referred to in
paragraph (2) letter b shall be conducted by tracing the correctness of the
Document of Transfer Pricing compared to the actual condition of the Taxpayer.
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(4) To the Taxpayer not fulfilling provisions as referred to in paragraph (2) letter a,
testing of the implementation of Arm’s Length Principle as referred to in
paragraph (2) letter b shall be conducted by tracing the actual condition of the
Taxpayer.

(5) In the event that based on the testing of implementation of Arm’s Length
Principle as referred to in paragraph (1), it is known that:

a. Taxpayer does not implement Arm’s Length Principle as referred to in

Article 3 paragraph (3);

b. implementation of Arm’s Length Principle conducted by the Taxpayer

does not comply with the provisions as referred to in Article 4 paragraph
(1);

c. Taxpayer cannot prove certain Transaction Affected by Special

Relationship based on preliminary stage as referred to in Article 14; or

d. Transfer Price determined by the Taxpayer does not fulfill Arm’s Length
Principle as referred to in Article 3 paragraph (4),

The Director General of Taxation shall re-determine the amount of income

and/or deduction to calculate the amount of taxable income as referred to in
paragraph (1).

(6) Re-determination of the amount of income and/or deduction as referred to in

paragraph (5) shall be conducted by:

a. determining Transfer Price in accordance with Arm’s Length Principle as

referred to in Article 3 to calculate the amount of taxable income; and

b. considering the stage of implementation of Arm’s Length Principle

Taxpayer that has fulfilled provisions as referred to in Article 3.

Article 37

(1) In the event that during:

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 a. Director General of Taxation re-determines the amount of income and/or
deduction to calculate the amount of taxable income as referred to in
Article 36 paragraph (5); or

b. Taxpayer implements the provisions as referred to in Article 3 paragraph

(1),

it is found difference between the value of Transaction Affected by Special

Relationship that does not comply with Arm’s Length Principle and the value of
Transaction Affected by Special Relationship that complies with Arm’s Length
Principle, and therefore the difference shall be the indirect profit division to the
Affiliation Party treated as dividend.

(2) Indirect profit division to the Affiliation Party treated as dividend as referred to in
paragraph (1) shall be subjected to income tax in accordance with the
provisions of laws and regulations in the field of taxation.
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(3) Indirect profit division to the Affiliation Party treated as dividend as referred to in
paragraph (1) of income tax payable during:

a. the income payment;

b. provision of income payment; or

c. the maturity of income payment,

based on the event whichever comes first.

(4) Provision as referred to in paragraph (1) shall not be applied, in the event that:

a. there is addition and/or return of cash or cash equivalents amounting to

the difference as referred to in paragraph (1); and/or

b. Taxpayer agrees on the Transfer Pricing by Director General of Taxation

as referred to in Article 36 paragraph (6).

(5) Addition and/or return of cash or cash equivalents amounting to the difference
paragraph (4) letter a shall be conducted prior to the issuance of tax
assessment letter.

Article 38

(1) Provision as referred to in Article 37 paragraph (2) shall be applied for:

a. transaction in the form of cross-border transactions and domestic

transactions; and

b. all special relationship forms.

(2) To the income tax imposition in indirect profit division to the Affiliation Party
treated as dividend as referred to in Article 37 paragraph (2) may obtain the
benefit of Double Taxation Avoidance Agreement in accordance with the
provisions of laws and regulations regulating the implementation of Double
Taxation Avoidance Agreement.

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 Article 39

(1) The Director General of Taxation shall have the authority to conduct
adjustments to sales price or substitution affected by special relationship as the
basis to calculate the payable value-added tax.

(2) Adjustment to sales price or substitution affected by special relationship as

referred to in paragraph (1) shall be calculated based on fair market price
during delivery of the taxable goods or taxable services in the event that the
sale price or the substitution is lower than the fair market price.

(3) Adjustment to sales price or substitution affected by special relationship as

referred to in paragraph (1) may also be conducted in the event that there is a
Transfer Pricing by Director General of Taxation as referred to in Article 36
paragraph (6) that may be allocated in every transaction of taxable goods
and/or taxable services delivery.

(4) Adjustment to sales price or substitution affected by special relationship as

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referred to in paragraph (2) and paragraph (3) to the taxable entrepreneur of
seller or services provider may not cause income tax adjustment for taxable
entrepreneur of the buyer of taxable goods or the receiver of the taxable
services.

(5) Taxable entrepreneur of the buyer of taxable goods or taxable service recipients
as referred to in paragraph (4) may remain credit the value added tax listed in
the tax invoice issued by the taxable entrepreneur conducting delivery of
taxable goods and/or delivery of taxable services insofar as it fulfills the
provision of input tax credit in accordance with the provisions of laws and
regulations in the field of value added tax.

CHAPTER VI
ADJUSTMENT OF AFFILIATION

Article 40

(1) In the event that there is:

a. Transfer Pricing as referred to in Article 36 paragraph (6) by Director

General of Taxation through Audit; or

b. correction of Transfer Pricing by Tax Authority of Partner of Double

Taxation Avoidance Agreement upon foreign tax subject,

causing the occurrence of double taxation imposition, the domestic Taxpayer

that is the transaction counterparty may conduct adjustment of affiliation.

(2) Adjustment of affiliation as referred to in paragraph (1) shall be adjustment of

material of Transfer Pricing in the calculation of taxable income of domestic
Taxpayer that is the counterparty:

a. Domestic Taxpayer which Transfer Pricing is conducted by Director

General of Taxation as referred to in paragraph (1) letter a; or

b. foreign tax subject which the correction of Transfer Pricing is conducted

by Tax Authority of Partner of Double Taxation Avoidance Agreement.

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 (3) Adjustment of affiliation as referred to in paragraph (2) letter a may be
conducted in the event that domestic Taxpayer which Transfer Pricing is
conducted by Director General of Taxation as referred to in Article 36 paragraph
(6):

a. approving Transfer Pricing by the Director General of Taxation; and

b. not proposing remedy related to tax assessment letter,

upon the material of Transfer Pricing by Director General of Taxation related to

Taxpayer as referred to in paragraph (2) letter a.

(4) Adjustment of affiliation as referred to in paragraph (3) shall be conducted by:

a. correction of annual income tax returns by calculating Transfer Pricing

by Director General of Taxation insofar as Audit of the domestic
Taxpayer as referred to in paragraph (1) has not been conducted and
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the provision as referred to in paragraph (3) is fulfilled;

b. issuance of tax assessment letter by considering Transfer Pricing by

Director General of Taxation insofar Audit of domestic Taxpayer as
referred to in paragraph (1) is being conducted and provision as referred
to in paragraph (3) is fulfilled; or

c. correction of tax assessment letter by considering Transfer Pricing by

the Director General of Taxation insofar as the tax assessment letter of
domestic Taxpayer as referred to in paragraph (1) has been issued and
does not proposing remedy upon material of adjustment of affiliation as
well as provision as referred to in paragraph (3) is fulfilled.

(5) Correction of annual tax returns, issuance of tax assessment letter, and
correction of tax assessment letter as referred to in paragraph (4) shall be
conducted in accordance with the provisions of laws and regulations in the field
of general provisions and procedure for taxation.

(6) Correction of annual tax returns as referred to in paragraph (4) letter a shall be
conducted along with the written notification by Taxpayer to Director General of
Taxation through the Tax Service Office where the Taxpayer is registered
concerning the information of Transfer Pricing as referred to in paragraph (1)
letter a.

(7) Adjustment of affiliation through issuance of tax assessment letter as referred to

in paragraph (4) letter b shall be conducted in the event that:

a. Taxpayer has fulfilled provision as referred to in paragraph (6); or

b. Taxpayer as referred to in paragraph (2) letter a submits disclosure of

the untruth of filling in the notification letter in accordance with the
information of Transfer Pricing by Director General of Taxation.

(8) Adjustment of affiliation through correction of tax assessment letter as referred

to in paragraph (4) letter c shall be conducted in position by Director General of
Taxation.

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 (9) Adjustment of affiliation as referred to in paragraph (4) letter c shall be
preceded by written notification of domestic Taxpayer that is the counterparty to
Director General of Taxation through Tax Service Office where the Taxpayer is
registered concerning information of Transfer Pricing as referred to in paragraph
(1) letter a.

(10) Written notification as referred to in paragraph (6) and paragraph (9) as well as
disclosure of the untruth of filling in the notification letter as referred to in
paragraph (7) may be submitted:

a. directly;

b. by post, expedition service company, or courier service with proof of mail

delivery; or

c. electronically.

(11) Submission of written notification and disclosure of the untruth of filling in the
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notification letter electronically as referred to in paragraph (10) letter c shall be
conducted in the event that the system has been available.

(12) Procedure for submission of written notification and disclosure of the untruth of
filling in the notification letter electronically as referred to in paragraph (10) letter
c shall be conducted in accordance with Ministerial Regulation regulating
procedure for rights implementation and obligation fulfillment for taxation as well
as issuance, signing, and submission of tax decision or assessment
electronically.

(13) Adjustment of affiliation as referred to in paragraph (2) letter b shall be

conducted through Mutual Agreement Procedure.

CHAPTER VII
MUTUAL AGREEMENT PROCEDURE

Part One
Submission of Request on Implementation of
Mutual Agreement Procedure

Article 41

(1) Director General of Taxation shall have authority to implement Mutual

Agreement Procedure to prevent or solve any issues arising in the
implementation of Double Taxation Avoidance Agreement.

(2) Director General of Taxation may transfer authority as referred to in paragraph

(1) in the form of delegation to the officials in the Directorate General of
Taxation.

(3) Implementation of Mutual Agreement Procedure as referred to in paragraph (1)

may be conducted based on the request on:

a. domestic Taxpayer;

b. Indonesian Citizen;

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 c. Director General of Taxation; or

d. Tax Authority of Partner of Double Taxation Avoidance Agreement

through the Authorized Officials of Partner of Double Taxation Avoidance
Agreement in accordance with provisions in Double Taxation Avoidance
Agreement.

(4) Domestic taxpayer as referred to in paragraph (3) letter a may submit request
for implementation of Mutual Agreement Procedure to Director General of
Taxation as Indonesian Authority Officials in the context of adjustment of
affiliation as referred to in Article 40 paragraph (13).

(5) In addition to the adjustment of affiliation as referred to in paragraph (4), the

domestic Taxpayer as referred to in paragraph (3) letter a may also submit
request for implementation of Mutual Agreement Procedure to Director General
of Taxation in the event that there is taxation treatment by Tax Authority of
Partner of Double Taxation Avoidance Agreement not complied with the
provisions of Double Taxation Avoidance Agreement.
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(6) Taxation treatment by Tax Authority of Partner of Double Taxation Avoidance
Agreement not complied with the provisions of Double Taxation Avoidance
Agreement as referred to in paragraph (5) shall consist of:

a. tax imposition by Tax Authority of Partner of Double Taxation Avoidance

Agreement resulting in double tax imposition caused by:

1. correction of Transfer Pricing;

2. correction related to the permanent establishment existence

and/or profit; and/or

3. correction of other income tax objects;

b. tax imposition including income tax withholding or collection in Partner of

Double Taxation Avoidance Agreement not complied with the provisions
regulated in Double Taxation Avoidance Agreement;

c. status determination as domestic tax subject by Tax Authority of Partner

of Double Taxation Avoidance Agreement;

d. discrimination of taxation treatment in Partner of Double Taxation

Avoidance Agreement; and/or

e. interpretation of provision of Double Taxation Avoidance Agreement.

(7) Request on implementation of Mutual Agreement Procedure as referred to in

paragraph (3) letter b shall be submitted upon any forms of discriminative
treatment in Partner of Double Taxation Avoidance Agreement contradictory to
the provisions on non-discrimination as regulated in Double Taxation Avoidance
Agreement.

(8) Request on implementation of Mutual Agreement Procedure by Director

General of Taxation as referred to in paragraph (3) letter c may be submitted in
the context of:

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 a. following up proposal of request on implementation of Mutual Agreement
Procedure by domestic Taxpayer; and/or

b. following up request on Bilateral or Multilateral Advance Pricing

Agreement submitted by domestic Taxpayer in accordance with
procedure for implementation of Advance Pricing Agreement.

(9) Proposal of request for implementation of Mutual Agreement Procedure as

referred to in paragraph (8) letter a may be submitted in the event that
according to the domestic Taxpayer, there is non-conformance taxation
treatment by Director General of Taxation with the provision of Double Taxation
Avoidance Agreement.

(10) Taxation treatment by Director General of Taxation not complied with the
provisions of Double Taxation Avoidance Agreement according to the domestic
Taxpayer as referred to in paragraph (9) shall consist of:

a. double taxation imposition as a result of Transfer Pricing as referred to

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in Article 36 paragraph (6); and/or

b. interpretation difference of provisions of Double Taxation Avoidance

Agreement.

(11) Request on implementation of Mutual Agreement Procedure as referred to in

paragraph (3) letter a, letter c, and letter d may be submitted at the same time
with the request on domestic Taxpayer to propose:

a. petition for the lawsuit as regulated in Article 23 of Law regarding

General Provisions and Procedure for Taxation;

b. petition for objection as regulated in Article 25 of Law regarding General

Provisions and Procedure for Taxation;

c. petition for appeal as regulated in Article 27 of Law regarding General

Provisions and Procedure for Taxation;

d. application for reduction or cancellation of incorrect tax assessment

letter as regulated in Article 36 paragraph (1) letter b of Law regarding
General Provisions and Procedure for Taxation; or

e. petition for judicial review as regulated in Article 77 paragraph (3) of Law

regarding Tax Court.

(12) Request on implementation of Mutual Agreement Procedure as referred to in

paragraph (3) shall not postpone:

a. obligation to pay payable tax;

b. implementation of tax collection; and

c. return of tax overpayment,

in accordance with the provisions of laws and regulations in the field of taxation.

Article 42

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 (1) Request on implementation of Mutual Agreement Procedure submitted by the
Applicant must fulfill the following requirements:

a. submitted in writing in Indonesian language;

b. elaborating non-conformance of implementation of the provision of

Double Taxation Avoidance Agreement according to the Applicant;

c. submitted in the period as regulated in Double Taxation Avoidance

Agreement or no later than 3 (three) years in the event that this is not
regulated in Double Taxation Avoidance Agreement, as of:

1. date of tax assessment letter;

2. date of receipt of income tax payment, withholding, or collection;

or
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3. at the time the taxation treatment not comply with the provisions
of Double Taxation Avoidance Agreement;

d. signed by Applicant or Taxpayer representative as referred to in Article

32 paragraph (1) of Law regarding General Provisions and Procedure
for Taxation; and

e. with attachment of:

1. certificate of domicile or other documents containing identity of

domestic taxpayer of Partner of Double Taxation Avoidance
Agreement related to the request on implementation of Mutual
Agreement Procedure as referred to in Article 41 paragraph (6)
letter a and letter b;

2. list of information and/or evidence or information owned by the

Applicant showing that the taxation treatment by the Tax
Authority of Partner of Mitra Double Taxation Avoidance
Agreement or discriminative treatment in Partner of Double
Taxation Avoidance Agreement does not comply with the
provision of Double Taxation Avoidance Agreement as referred to
in Article 41 paragraph (6) and Article 41 paragraph (7); and/or

3. statement letter declaring willingness of the Applicant to submit

information and/or evidence or information as referred to in
number 2 in complete and timely manner.

(2) Proposal of request on implementation of Mutual Agreement Procedure as

referred to in Article 41 paragraph (8) letter a must fulfill the following
requirements:

a. submitted in writing in Indonesian language;

b. elaborating taxation treatment by Director General of Taxation not

complied with the provisions of Double Taxation Avoidance Agreement
according to domestic Taxpayer;

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 c. submitted within the period as regulated in Double Taxation Avoidance
Agreement or no later than 3 (three) years in the event that this is not
regulated in Double Taxation Avoidance Agreement, as of the
occurrence of taxation treatment that does not comply with the
provisions of Double Taxation Avoidance Agreement;

d. signed by domestic Taxpayer or Taxpayer representative as referred to

in Article 32 paragraph (1) of Law regarding General Provisions and
Procedure for Taxation; and

e. attached by evidence showing the occurrence of taxation treatment by

Director General of Taxation that does not comply with the provisions of
Double Taxation Avoidance Agreement.

(3) Request on implementation of Mutual Agreement Procedure as referred to in

Article 41 paragraph (3) letter d shall be submitted in the period as regulated in
Double Taxation Avoidance Agreement.
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(4) Request on implementation of Mutual Agreement Procedure as referred to in
paragraph (1), request on implementation of Mutual Agreement Procedure as
referred to in Article 41 paragraph (3) letter d, and proposal of request on
implementation of Mutual Agreement Procedure as referred to in Article 41
paragraph (8) letter a shall be submitted to Director General of Taxation
through:

a. Tax Service Office where the domestic Taxpayer is registered, in the

event that Request on implementation of Mutual Agreement Procedure
as referred to in paragraph (1) submitted by the domestic Taxpayer; or

b. Directorate of International Taxation, in the event of:

1. request on implementation of Mutual Agreement Procedure as

referred to in paragraph (1) by Indonesian Citizen;

2. request on implementation of Mutual Agreement Procedure as

referred to in Article 41 paragraph (3) letter d by the Authorized
Officials of Partner of Double Taxation Avoidance Agreement; or

3. proposal of request on implementation of Mutual Agreement

Procedure as referred to in Article 41 paragraph (8) letter a by
domestic Taxpayer.

(5) Request on implementation of Mutual Agreement Procedure as referred to in

Article 41 paragraph (3) letter a, letter b, dan letter d, as well proposal of
request on implementation of Mutual Agreement Procedure as referred to in
Article 41 paragraph (8) letter a may be submitted:

a. directly; or

b. by post, expedition service company, or courier service with proof of mail

delivery.

(6) Request on implementation of Mutual Agreement Procedure as referred to in

Article 41 paragraph (3) letter b dan letter d, as well as proposal of request on

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 implementation of Mutual Agreement Procedure as referred to in Article 41
paragraph (8) letter a may also be submitted by electronic post.

(7) Request on implementation of Mutual Agreement Procedure as referred to in

Article 41 paragraph (3) letter a may also be submitted electronically.

(8) Submission of request on implementation of Mutual Agreement Procedure

electronically as referred to in paragraph (7) shall be conducted in the event
that the system has been available.

(9) Procedure for submission of request on implementation of Mutual Agreement

Procedure as referred to in paragraph (7) shall be conducted in accordance
with the Ministerial Regulation regulating procedure for right implementation
and obligation fulfillment of taxation as well as issuance, signing, and delivery of
tax decision or assessment electronically.

(10) Request letter of implementation of Mutual Agreement Procedure as referred to

in paragraph (1) shall be prepared using format example as set forth in:
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a. Attachment letter I.1., for domestic Taxpayer Applicant; or

b. Attachment letter I.2., for Indonesian Citizen Applicant,

which constitutes an inseparable part of this Ministerial Regulation.

(11) Statement Letter as referred to in paragraph (1) letter e number 3 shall be

prepared using format example as set forth in Attachment letter 1.3. which
constitutes an inseparable part of this Ministerial Regulation.

Part Two
Handling of Request on Implementation of
Mutual Agreement Procedure

Article 43

(1) Director General of Taxation shall conduct research on:

a. request on implementation of Mutual Agreement Procedure as referred

to in Article 41 paragraph (3) letter a, letter b, and letter d; and

b. proposal of request on implementation of Mutual Agreement Procedure

as referred to in Article 41 paragraph (8) letter a.

(2) Research on request on implementation of Mutual Agreement Procedure as

referred to in paragraph (1) letter a shall be conducted upon:

a. completeness of requirements fulfillment of request on implementation

of Mutual Agreement Procedure based on provisions as referred to in
Article 42 paragraph (1) or paragraph (3); and

b. conformity of material submitted in the request on implementation of

Mutual Agreement Procedure with taxation treatment that may be
submitted for request on implementation of Mutual Agreement
Procedure as referred to in Article 41 paragraph (3) letter d, paragraph
(6), or paragraph (7),

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 to determine whether the request on implementation of Mutual Agreement
Procedure may or may not be followed up.

(3) Research on request on implementation of Mutual Agreement Procedure as

referred to in paragraph (1) letter b shall be conducted upon:

a. completeness of requirements fulfillment for submission of proposal of

request on implementation of Mutual Agreement Procedure as referred
to in Article 42 paragraph (2); and

b. conformity of the material submitted for the proposed request on the

implementation of the Mutual Agreement Procedure with the taxation
treatment that can be submitted for the proposed request on the
implementation of Mutual Agreement Procedure as referred to in Article
41 paragraph (9),

to determine whether the proposal may or may not be followed up as request of

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implementation of Mutual Agreement Procedure by Director General of Taxation
to the Authorized Officials of Partner of Double Taxation Avoidance Agreement.

(4) Director General of Taxation shall follow up the research result as referred to in
paragraph (1) letter a related to the request of implementation of Mutual
Agreement Procedure submitted by the Applicant by issuing:

a. written notification to the Applicant that the request of implementation of

Mutual Agreement Procedure may be followed up and request on
implementation of Mutual Agreement Procedure in writing to the
Authorized Officials of Partner of Double Taxation Avoidance Agreement,
in the event that the request of implementation of Mutual Agreement
Procedure fulfills requirements and material conformity; or

b. rejection letter of the request on the implementation of Mutual

Agreement Procedure to the Applicant including any matters that
becomes the basis of rejection, in the event that request on
implementation of Mutual Agreement Procedure does not fulfill the
requirements and/or does not fulfill material conformity,

within no later than 1 (one) month since the date of reception of request on
implementation of Mutual Agreement Procedure.

(5) Director General of Taxation shall follow up the research result as referred to in
paragraph (1) letter a related to the request on implementation of Mutual
Agreement Procedure submitted by the Authorized Officials of Partner of
Double Taxation Avoidance Agreement by issuing:

a. written notification to the Authorized Official of Partner of Double

Taxation Avoidance Agreement and domestic Taxpayer related to the
request on implementation of Mutual Agreement Procedure that the
request on implementation of Mutual Agreement Procedure may be
followed up, in the event that the request on implementation of Mutual
Agreement Procedure fulfills requirements and material conformity; or

b. rejection letter of the request on the implementation of Mutual

Agreement Procedure to the Authorized Official of Partner of Double

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 Taxation Avoidance Agreement mentioning any matters which becomes
the basis for rejection, in the event that request on implementation of
Mutual Agreement Procedure does not fulfill requirements and/or
material conformity,

within no later than 1 (one) month since the date of reception of request on
implementation of Mutual Agreement Procedure.

(6) Director General of Taxation shall follow up the research result as referred to in
paragraph (1) letter b by issuing:

a. written notification to the domestic Taxpayer that proposal of request on

implementation of Mutual Agreement Procedure may be followed up and
request on implementation of Mutual Agreement Procedure in writing to
the Authorized Official of Partner of Double Taxation Avoidance
Agreement, in the event that the proposal of request on implementation
of Mutual Agreement Procedure fulfills requirements and material
conformity; or
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b. rejection letter of the request on the implementation of Mutual
Agreement Procedure to the domestic Taxpayer that includes any
matters which becomes the basis for rejection, in the event that the
proposal of request on implementation pf Mutual Agreement Procedure
does not fulfill the requirements and/or does not fulfill material
conformity,

within no later than 1 (one) month since the reception date of proposal of
request on implementation of Mutual Agreement Procedure.

(7) In the event that the time limit as referred to in paragraph (4), paragraph (5),
and paragraph (6) has been exceeded and Director General of Taxation has not
issued written notification, request on implementation of Mutual Agreement
Procedure or proposal of request on implementation of Mutual Agreement
Procedure shall be considered can be followed up and Director General of
Taxation shall issue written notification letter within no later than 1 (one) month
after the time limit as referred to in paragraph (4), paragraph (5), and paragraph
(6) is exceeded.

(8) In the event that the request on implementation of Mutual Agreement Procedure
to the Authorized Official of Partner of Double Taxation Avoidance Agreement as
referred to in paragraph (4) letter a and paragraph (6) letter a has not received
written answer from the Authorized Official of Partner of Double Taxation
Avoidance Agreement within no later than 8 (right) months since the submission
of request on implementation of Mutual Agreement Procedure, Director General
of Taxation shall issue written notification to:

a. Applicant or domestic Taxpayer related to the request on implementation

of Mutual Agreement Procedure as referred to in Article 41 paragraph
(3) letter c and letter d that the request on implementation of Mutual
Agreement Procedure cannot be followed up; and

b. Authorized Official of Partner of Double Taxation Avoidance Agreement

that the request on implementation of Mutual Agreement Procedure is
revoked.

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 (9) Upon request on implementation of Mutual Agreement Procedure that is
rejected as referred to in paragraph (4) letter b, proposal of request on
implementation of Mutual Agreement Procedure that is rejected as referred to in
paragraph (6) letter b, and request on implementation of Mutual Agreement
Procedure that cannot be followed up as referred to in paragraph (8) letter a,
the Applicant may re-submit the proposal of request on implementation of
Mutual Agreement Procedure or domestic Taxpayer may re-submit proposal of
request on implementation of Mutual Agreement Proposal insofar the time limit
as referred to in Article 42 paragraph (1) letter c or Article 42 paragraph (2)
letter c has not been exceeded.

Article 44

(1) In the event that the request on implementation of Mutual Agreement Procedure
submitted by the Requester can be followed up as referred to in Article 43
paragraph (4) letter a, the Requester shall be obligated to submit information
and/or proofs or explanation set forth in the list of information and/or proof or
explanation owned by the Requester as referred to in Article 42 paragraph (1)
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letter e number 2 to Director General of Taxation through Directorate of
International Taxation.

(2) Submission of information and/or proof or explanation as referred to in

paragraph (1) may be in the form of hardcopy and/or softcopy.

(3) The requester shall be obligated to submit information and/or proof or

explanation as referred to in paragraph (1) within no later than 2 (two) months
after:

a. issuance date of written notification that the request on implementation

of Mutual Agreement Procedure can be followed up as referred to in
Article 43 paragraph (4) letter a; or

b. exceeding the time limit of 1 (one) month and therefore request on

implementation of Mutual Agreement Procedure submitted by the
Requester shall be considered able to be followed up as referred to in
Article 43 paragraph (7).

(4) Information and/or proof or explanation referred to in paragraph (1) may be

submitted:

a. directly;

b. by post, expedition service company, or courier service with proof of mail

delivery; or

c. electronic post.

Article 45

(1) In the context of implementation of Mutual Agreement Procedure, Director

General of Taxation shall conduct negotiation with Authorized Official of Partner
of Double Taxation Avoidance Agreement.

(2) Negotiation as referred to in paragraph (1) shall be the activities of

correspondence, material testing, and meeting of Authorized Official for the

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 purpose of solving any issues occurred in the implementation of Double
Taxation Avoidance Agreement.

(3) Negotiation as referred to in paragraph (1) shall be conducted within no later

than 24 (twenty four) months since:

a. the reception of request on implementation of Mutual Agreement

Procedure in writing from Authorized Official of Partner of Double
Taxation Avoidance Agreement as referred to in Article 41 paragraph (3)
letter d; or

b. submission of request on implementation of Mutual Agreement

Procedure in writing to the Authorized Official of Partner of Double
Taxation Avoidance Agreement as referred to in Article 43 paragraph (4)
letter a and Article 43 paragraph (6) letter a.

(4) Negotiation period as referred to in paragraph (3) may be extended 1 (one) time
within no later than 24 (twenty-four) months for each request on implementation
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of Mutual Agreement Procedure.

(5) Extension of negotiation period as referred to in paragraph (4) may be

conducted before the discussion time is ended in the event that initial
agreement has been created set forth in the minutes of meeting or other
documents concerning:

a. existence of transaction, selection of transaction analysis approach,

selection of party to test, selection of Transfer Pricing method, and
selection of price indicator upon request on implementation of Mutual
Agreement Procedure related to correction of Transfer Pricing or related
to Bilateral or Multilateral Advance Pricing Agreement; or

b. interpretation of the provisions of Double Taxation Avoidance

Agreement, upon request on implementation of Mutual Agreement
Procedure other than as referred to in letter a.

(6) Extension of negotiation period as referred to in paragraph (4) shall be set forth
in the minutes of meeting or other documents within 6 (six) months period
before the end of discussion as referred to in paragraph (3).

Article 46

(1) In the context of material testing as referred to in Article 45 paragraph (2),

Director General of Taxation shall have authority to:

a. request information and/or proof or explanation other than as referred to

in Article 42 paragraph (1) letter e number 2 or Article 42 paragraph (2)
letter e to:

1. the Requester;

2. domestic Taxpayer related to the request on implementation of

Mutual Agreement Procedure as referred to in Article 41
paragraph (3) letter c and letter d; and/or

3. other relevant parties;

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 b. conduct discussion with the Requester, domestic taxpayer related to
request on implementation of Mutual Agreement Procedure as referred
to in Article 41 paragraph (3) letter c and letter d, and/or other relevant
parties;

c. to conduct observation to the business activities location of the

Requester and/or domestic Taxpayer related to the request on
implementation of Mutual Agreement Procedure as referred to in Article
41 paragraph (3) letter c and letter d;

d. to conduct taxation information exchange in the context of Mutual

Agreement Procedure to Tax Authority of Partner of Double Taxation
Avoidance Agreement; and/or

e. to conduct Audit for other purposes and/or assessment in the context of

Mutual Agreement Procedure in order to obtain information and/or proof
or explanation required in the context of settlement of Mutual Agreement
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Procedure.

(2) The requester and domestic Taxpayer related to the request on implementation
of Mutual Agreement Procedure as referred to in Article 41 paragraph (3) letter
c and letter d shall be obligated to:

a. provide information and/or proof or explanation as referred to in

paragraph (1) letter a;

b. attend discussion as referred to in paragraph (1) letter b; and

c. provide observation opportunity to the business activities location as

referred to in paragraph (1) letter c.

(3) Authorized Official of Partner of Double Taxation Avoidance Agreement may

request information and/or proof or explanation to the parties as referred to in
paragraph (1) letter a.

(4) Request of information and/or proof or explanation of Authorized Officials of

Partner of Double Taxation Avoidance Agreement as referred to in paragraph
(3) may only be submitted through:

a. procedure for information exchange based on request to Director

General of Taxation as regulated in Double Taxation Avoidance
Agreement or international treaty regulating taxation information
exchange; and/or

b. direct request during meeting process of Authorized Officials as referred

to in Article 45 paragraph (2).

Article 47

(1) Meeting of Authorized Officials as referred to in Article 45 paragraph (2) shall be

conducted by:

a. direct meeting;

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 b. telephone line;

c. video conference; and/or

d. other line agreed by Director General of Taxation and Authorized Official

of Partner of Double Taxation Avoidance Agreement.

(2) Meeting of Authorized Officials as referred to in paragraph (1) shall be set forth
in the minutes of meeting or other equivalent documents.

Article 48

(1) In the context of negotiation as referred to in Article 45 paragraph (1), the

Director General of Taxation shall prepare a position in the negotiation.

(2) Position in negotiation as referred to in paragraph (1) shall contain a written

description of opinion of the Indonesian Authorized Officials related to the
matter submitted for its request on implementation of Mutual Agreement
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Procedure.

(3) In the event that negotiations as referred to in Article 45 paragraph (1) has not
resulted in Mutual Agreement until the appeal decision or judicial review
decision declaration, the Director General of Taxation shall:

a. continue negotiation, in the event that the dispute material resolved in

the appeal decision or judicial review decision is not the dispute material
which is submitted for its request on implementation of Mutual
Agreement Procedure;

b. use judicial review decision as position in negotiation or discontinue

negotiation in the event that:

1. appeal decision is not submitted for judicial review request; and

2. dispute material in appeal decision is the dispute material

submitted for the request on implementation of Mutual
Agreement Procedure; or

c. use judicial review decision as position in negotiation or discontinue

negotiation, in the event that the dispute material in the judicial review
decision is the dispute material submitted for the request on
implementation of Mutual Agreement Procedure.

Article 49

(1) Negotiation result as referred to in Article 45 paragraph (1) shall be set forth in
Mutual Agreement that may contain agreement of disagreement that has been
agreed on the material submitted for the implementation of Mutual Agreement
Procedure.

(2) The Director General of Taxation shall issue written notification concerning
negotiation results containing agreement as referred to in paragraph (1) to the
Requester or domestic Taxpayer related to the request on implementation of
Mutual Agreement Procedure as referred to in Article 41 paragraph (3) letter c

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 and letter d within no later than 14 (fourteen) calendar days after the date of
Mutual Agreement.

(3) Written notification as referred to in paragraph (2) may be accompanied by:

a. request to submit a statement letter of not proposing a settlement of

dispute outside Procedure for Mutual Agreement; or

b. request to submit statement letter of revocation or adjustment attached

by written approval from Tax Court or Supreme Court regarding
revocation or adjustment of dispute in the event that the dispute material
submitted in Procedure for Mutual Agreement also submitted for its
request as referred to in Article 41 paragraph (11).

(4) Statement letter of not proposing a settlement of dispute outside Mutual

Agreement Procedure as referred to in paragraph (3) letter a must be submitted
by the Requester or domestic Taxpayer related to the request on
implementation of Mutual Agreement Procedure as referred to in Article 41
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paragraph (3) letter c and letter d to Director General of Taxation within no later
than 14 (fourteen) calendar days after the written notification date as referred to
in paragraph (2).

(5) Statement letter of revocation or adjustment attached by written approval of Tax

Court or Supreme Court concerning revocation or adjustment of dispute as
referred to in paragraph (3) letter b must be submitted by the Requester or
domestic Taxpayer related to request on implementation of Mutual Agreement
Procedure as referred to in Article 41 paragraph (3) letter c and letter d to
Director General of Taxation within no later than 8 (eight) months after the date
of written notification as referred to in paragraph (2).

(6) The Director General of Taxation shall submit written notification to the
Authorized Official of Partner of Double Taxation Avoidance Agreement that
Mutual Agreement may or may not be implemented after the issuance of written
notification concerning negotiation result containing agreement as referred to in
paragraph (2).

(7) In the event that Director General of Taxation conduct request as referred to in
paragraph (3), submission of written notification to the Authorized Official of
Partner of Double Taxation Avoidance Agreement that Mutual Agreement may
be implemented as referred to in paragraph (6) shall be conducted after the
Requester or domestic Taxpayer related to the request on implementation of
Mutual Agreement Procedure as referred to in Article 41 paragraph (3) letter c
and letter d fulfills the provision as referred to in paragraph (4) or paragraph (5).

(8) In the event that the Requester or domestic Taxpayer as referred to in

paragraph (7) does not fulfill provision as referred to in paragraph (4) or
paragraph (5), Director General of Taxation shall submit written notification to
the Authorized Official of Partner of Double Taxation Avoidance Agreement that
Mutual Agreement cannot be implemented as referred to in paragraph (6).

(9) In the event that negotiation result contains disagreement as referred to in

paragraph (1), the Director General of Taxation shall issue:

a. written notification on negotiation result containing disagreement to the

Requester or domestic Taxpayer related to the request on

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 implementation of Mutual Agreement Procedure as referred to in Article
41 paragraph (3) letter c and letter d; and

b. written notification to the Authorized Official of Partner of Double

Taxation Avoidance Agreement,

within no later than 14 (fourteen) calendar days after the date of Mutual
Agreement.

(10) Statement letter of not proposing dispute settlement outside Mutual Agreement
Procedure and statement letter of revocation or adjustment as referred to in
paragraph (3) shall be prepared using format example as set forth in:

a. Attachment letter J.1., for statement letter of not proposing dispute

settlement outside Mutual Agreement Procedure; or

b. Attachment letter J.2., for statement letter of revocation or adjustment,

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which constitutes an inseparable part of this Ministerial Regulation.

Article 50

(1) Director General of Taxation shall issue Decision Letter of Mutual Agreement
within period no later than 1 (one) month since:

a. reception date of written notification of The Authorized Official of Partner

of Double Taxation Avoidance Agreement that the Mutual Agreement
can be implemented; and

b. submission date of written notification of The Authorized Official of

Partner of Double Taxation Avoidance Agreement that the Mutual
Agreement can be implemented.

(2) In the event that the negotiation result containing agreement as referred to in
Article 49 paragraph (1) related to the request on Bilateral or Multilateral
Advance Pricing Agreement, The Director General of Taxation shall follow up
Mutual Agreement by issuing decision letter of enactment of Advance Pricing
Agreement in accordance with the implementing procedure for Advance Pricing
Agreement.

(3) Decision Letter of Mutual Agreement as referred to in paragraph (1) shall be

prepared using format example as set forth in:

a. Attachment letter J.3., for Mutual Agreement related to double taxation

imposition; or

b. Attachment letter J.4., for Mutual Agreement for not related to double
taxation imposition,

which constitutes an inseparable part of this Ministerial Regulation.

(4) Decision Letter of Mutual Agreement as referred to in paragraph (1) shall be

submitted to:

a. The Requester;

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 b. Domestic Taxpayer related to request in implementation of Mutual
Agreement Procedure as referred to in Article 41 paragraph (3) letter c
and letter d; and/or

c. work unit in the Directorate General of Taxation having authority to

follow up.

Article 51

(1) Director General of Taxation may terminate the negotiation as referred to in

Article 45 paragraph (1) in the event that:

a. The requestor is not submitting information and/or proof or explanation

within the time limit as referred to in Article 44 paragraph (3);

b. Authorized Official of Partner of Double Taxation Avoidance Agreement

asking information and/or proof or explanation is not in accordance with
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the provision as referred to in Article 46 paragraph (4);

c. negotiation is not resulting agreement until the end of time limit as

referred to in Article 45 paragraph (3) or paragraph (4);

d. the expiration of the stipulation as regulated in the Law regarding

General Provisions and Procedures for Taxation for the tax year, part of
the tax year, or tax period included in the request on the implementation
of the Mutual Agreement Procedure and the negotiations have not
resulted in any agreement;

e. domestic Taxpayer shall participate in tax amnesty program as regulated

in provisions of laws and regulations in the field of taxation for the tax
year, part of the tax year, or tax period included in the request on the
implementation of Mutual Agreement Procedure;

f. appeal decision or judicial review decision has been issued, in the event
that the dispute material being decided is the material submitted for
Mutual Agreement Procedure;

g. Authorized Official of Partner of Double Taxation Avoidance Agreement

disagree on position in negotiation of Director General of Taxation as
referred to in Article 48 paragraph (3) letter b or letter c; or

h. the issuance of lawsuit decision with verdict of revoking tax assessment

related to Mutual Agreement Procedure.

(2) Director General of Taxation shall submit written notification concerning

termination of negotiation as referred to in paragraph (1) to:

a. the Requester;

b. domestic Taxpayer related to the request on implementation of Mutual

Agreement Procedure as referred to in Article 41 paragraph (3) letter c
and letter d; and/or

c. Authorized Official of Partner of Double Taxation Avoidance Agreement.

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 Part Three
Revocation of Request on Implementation of
Mutual Agreement Procedure

Article 52

(1) Upon request on implementation of Mutual Agreement Procedure as referred to

in Article 41 paragraph (3), application for revocation may be submitted by:

a. Domestic Taxpayer;

b. Indonesian Citizen;

c. Director General of Taxation; or

d. Tax Authority of Partner of Double Taxation Avoidance Agreement

through Authorized Official of Partner of Double Taxation Avoidance
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Agreement in accordance with provisions in Double Taxation Avoidance
Agreement.

(2) Director General of Taxation may revoke request on implementation of Mutual

Agreement Procedure as referred to in paragraph (1) letter c in the context of:

a. following up application for revocation of proposal of request on

implementation of Mutual Agreement Procedure by domestic Taxpayer;
and/or

b. following up revocation of application for Bilateral or Multilateral Advance

Pricing Agreement submitted by domestic Taxpayer in accordance with
procedure for implementation of Advance Pricing Agreement.

(3) Application for revocation of request on implementation of Mutual Agreement

Procedure as referred to in paragraph (1) letter a, letter b, and letter d as well
as application for revocation of request on implementation of Mutual Agreement
Procedure by domestic Taxpayer as referred to in paragraph (2) letter a shall be
submitted to the Director General of Taxation through Director of International
Taxation.

(4) Application for revocation of request on implementation of Mutual Agreement

Procedure as referred to in paragraph (1) letter a and letter b as well as
application for revocation of proposal on the request on implementation of
Mutual Agreement Procedure by domestic Taxpayer as referred to in paragraph
(2) letter a must fulfill the following requirements:

a. submitted in writing in Indonesian language;

b. submitted within no later than 6 (six) months since the commencement

of negotiation as referred to in Article 45 paragraph (3);

c. mentioning reasons of revocation; and

d. signed by the Requester, domestic Taxpayer, or Taxpayer representative

as referred to in Article 32 paragraph (1) of Law regarding General
Provision and Procedure for Taxation.

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 (5) Upon application for revocation of request on implementation of Mutual
Agreement Procedure as referred to in paragraph (1) letter a and letter b as well
as application for revocation of proposal of the request on implementation of
Mutual Agreement Procedure by domestic Taxpayer as referred to in paragraph
(2) letter a, the Director General of Taxation shall conduct research on
requirements fulfillment as referred to in paragraph (4).

(6) Based on the research upon application for revocation of request on

implementation of Mutual Agreement Procedure as referred to in paragraph (5),
the Director General of Taxation shall issue written notification to:

a. The Requester that the application for revocation is approved or not

approved; and

b. The Authorized Official of Partner of Double Taxation Avoidance

Agreement that the request on implementation of Mutual Agreement
Procedure is revoked, in the event that the application for revocation is
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approved and submitted after the negotiation commencement,

within no later than 21 (twenty one) calendar days after the date of application
for revocation is received by the Director General of Taxation.

(7) Based on research upon application for revocation of proposal of request on

implementation of Mutual Agreement Procedure by Domestic Taxpayer as
referred to in paragraph (5), the Director General of Taxation shall issue written
notification to:

a. the domestic Taxpayer that the application for revocation of proposal of

request on the implementation of Mutual Agreement Procedure is
approved or not approved; and

b. the Authorized Official of Partner of Double Taxation Avoidance

Agreement that the request on implementation of Mutual Agreement
Procedure by the Director General of Taxation is revoked, in the event
that application for revocation of proposal of request on implementation
of Mutual Agreement Procedure is approved and submitted after the
negotiation commencement,

within no later than 21 (twenty one) calendar days after the date of application
for revocation of proposal of request on implementation of Mutual Agreement
Procedure is received by the Director General of Taxation.

(8) In the event that the time limit as referred to in paragraph (6) or paragraph (7)
has been exceeded and the Director General of Taxation has not issued written
notification, application for revocation of request on implementation of Mutual
Agreement Procedure as referred to in paragraph (1) letter a and letter b as well
as application for revocation of proposal of request on implementation of Mutual
Agreement Procedure by domestic Taxpayer as referred to in paragraph (2)
letter a shall be deemed as approved and the Director General of Taxation shall
issue written notification within no later than 14 (fourteen) calendar days after
the time limit as referred to in paragraph (6) or paragraph (7) has exceeded.

(9) Application for revocation of request on implementation of Mutual Agreement

Procedure as referred to in paragraph (1) letter a and letter b as well as

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 application for revocation of proposal of request on implementation of Mutual
Agreement Procedure as referred to in paragraph (2) letter a may be submitted:

a. directly;

b. by post, expedition service company, or courier service with proof of mail

delivery; or

c. by electronic mail.

(10) Application for revocation of request on implementation of Mutual Agreement

Procedure as referred to in paragraph (1) letter a may also be submitted
electronically.

(11) Submission of application for revocation electronically as referred to in

paragraph (10) shall be conducted in the event that the system has been
available.
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(12) Procedure for submission of application for revocation as referred to in
paragraph (10) shall be conducted in accordance with the Ministerial Regulation
regulating procedure for right implementation and obligation fulfillment of
taxation as well as issuance, signing, and delivery of tax decision or
assessment electronically.

(13) Application letter for revocation of request on implementation of Mutual

Agreement Procedure as referred to in paragraph (1) letter a shall be prepared
using format example as set forth in Attachment letter K.1. which constitutes an
inseparable part of this Ministerial Regulation.

(14) Application letter for revocation of request on implementation of Mutual

Agreement Procedure as referred to in paragraph (1) letter b shall be prepared
using format example as set forth in Attachment letter K.2. which constitutes an
inseparable part of this Ministerial Regulation.

(15) Application letter for revocation of proposal of request on implementation of

Mutual Agreement Procedure by domestic Taxpayer as referred to in paragraph
(2) letter a shall be prepared using format example as set forth Attachment
letter K.3., which constitutes an inseparable part of this Ministerial Regulation.

(16) Submission of application for revocation of request on implementation of Mutual

Agreement Procedure as referred to in paragraph (1) letter d may be conducted
insofar as the application is submitted prior to the Mutual Agreement.

(17) Upon application for revocation of request on implementation of Mutual

Agreement Procedure submitted by the Authorized Official of Partner of Double
Taxation Avoidance Agreement as referred to in paragraph (1) letter d, the
Director General of Taxation shall research the provision fulfillment as referred
to in paragraph (16) and issue written notification to:

a. the Authorized Official of Partner of Double Taxation Avoidance

Agreement that application for revocation is approved or not approved;
and

b. the domestic Taxpayer related to the request on implementation of

Mutual Agreement Procedure by Authorized Official of Partner of Double

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 Taxation Avoidance Agreement that the negotiation is terminated, in the
event that the application for revocation is approved.

Part Four
Follow Up of Mutual Agreement

Article 53

(1) Decision Letter of Mutual Agreement as referred to in Article 50 paragraph (1)

shall be tax restitution basis or tax collection basis in accordance with Article
27C paragraph (6) of Law regarding General Provisions and Procedure for
Taxation.

(2) In the event that the Decision Letter of Mutual Agreement is issued prior to the
issuance of tax assessment letter, the domestic Taxpayer related to the request
on implementation of Mutual Agreement Procedure must re-calculate the
amount of payable tax based on Decision Letter of Mutual Agreement by
submitting correction of notification letter or disclosure of incorrectness of
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notification letter filling in the time limit as regulated in the provisions of laws
and regulations in the field of taxation.

(3) In the event that the domestic Taxpayer related to the implementation Mutual
Agreement Procedure does not conduct:

a. correction of notification letter; or

b. disclosure of incorrectness of notification letter filling,

within the time limit of 3 (three) months since the issuance of Decision Letter of
Mutual Agreement or by considering expiration of stipulation as regulated in
Law regarding General Provisions and Procedure for Taxation, the Director
General of Taxation shall issue tax assessment letter by considering Decision
Letter of Mutual Agreement.

(4) In the event that the Decision Letter of Mutual Agreement is issued after the tax
assessment letter is issued and upon the tax assessment letter:

a. not submitting any objection as referred to in Article 41 paragraph (11)

letter b;

b. not submitting application for reduction or cancellation of incorrect tax

assessment letter as referred to in Article 41 paragraph (11) letter d;

c. submitting objection or application for reduction or cancellation of

incorrect but not considered tax assessment letter;

d. submitting objection or application for reduction or cancellation of

incorrect but revoked tax assessment letter; or

e. submitting objection, however, being adjusted from the material agreed

in the Mutual Agreement,

The Director General of Taxation shall issue Decision Letter of Mutual

Agreement by re-calculating the amount of payable tax in tax assessment letter.

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 (5) In the event that Decision Letter of Mutual Agreement is issued after the
decision letter of tax assessment reduction or decision letter of tax assessment
cancellation is issued, the Director General of Taxation shall issue Decision
Letter of Mutual Agreement by re-calculating the amount of payable taxes in the
decision letter of tax assessment reduction or decision letter of tax assessment
cancellation.

(6) In the event that the Decision Letter of Mutual Agreement is issued after the
decision of claim with verdict annuls the issuance on:

a. decision letter of tax assessment reduction;

b. decision letter of tax assessment cancellation; or

c. decision letter of objection which issuance is not in accordance with the

procedure that has been regulated in the laws and regulations in the
field of taxation,
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Director General of Taxation shall issue Decision Letter of Mutual Agreement by
re-calculating the amount of payable tax in tax assessment letter.

(7) In the event that Decision Letter of Mutual Agreement is issued after decision
letter of objection is issued and upon the decision letter of objection:

a. not submitting an appeal;

b. submitting an appeal, however, revoked and Tax Court has provided

written approval on the revocation;

c. submitting an appeal, however, adjusted from the material agreed in

Mutual Agreement and Tax Court has provided written approval on the
adjustment; or

d. submitting an appeal, however, the Tax Court issued a decision with the
ruling of inadmissibility,

The Director General of Taxation shall issue Decision Letter of Mutual

Agreement by re-calculating the amount of payable tax in the decision letter of
objection.

(8) In the event that there is any other dispute material not included in Decision
Letter of Mutual Agreement, however, it is related to dispute material included in
Decision Letter of Mutual Agreement, the Director General of Taxation shall
issue decision letter of objection or decision letter of reduction or cancellation
on incorrect tax assessment letter by considering Decision Letter of Mutual
Agreement.

(9) In the event that Decision Letter of Mutual Agreement is issued during the
Taxpayer submitting appeal request on the dispute material that is not included
in Decision Letter of Mutual Agreement, the Director General of Taxation shall
issue Decision Letter of Mutual Agreement by re-calculating the amount of
payable tax in the decision letter of objection.

(10) In the event that Decision Letter of Mutual Agreement is issued after appeal
decision or judicial review that include dispute material other than the material

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 included in Decision Letter of Mutual Agreement is issued, the Director General
of Taxation shall issue Decision Letter of Mutual Agreement by re-calculating
the amount of payable tax in the letter of implementation of appeal decision or
letter of implementation of judicial review decision.

(11) In the event that the Decision Letter of Mutual Agreement:

a. is issued prior to the tax assessment letter; and

b. causes excess upon deduction and/or collection of payable income tax,

the domestic Taxpayer of Partner of Double Taxation Avoidance Agreement may

submit application for return of overpayment taxes that should not be payable in
accordance with the provisions of laws and regulations in the field of taxation.

Article 54

In the event that to the Taxpayer, Decision Letter of Mutual Agreement is issued as
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referred to in Article 50 paragraph (1) after the issuance of objection decision, appeal
decision, and/or judicial review decision, basis of administrative sanction imposition in
tax statement as referred to in laws and regulations regulating procedure for issuance
of tax assessment and tax statement shall also calculate the amount of tax in Decision
Letter of Mutual Agreement.

CHAPTER VIII
ADVANCE PRICING AGREEMENT

Part One
Procedure for Submission of Application for
Advance Pricing Agreement

Article 55

(1) The Director General of Taxation shall have authority to prepare Advance
Pricing Agreement with Taxpayer or Authorized Official of Partner of Double
Taxation Avoidance Agreement for fair Transfer Pricing in accordance with
Arm’s Length Principle as referred to in Article 3 paragraph (2), which is
effective for certain period based on application for Advance Pricing Agreement
submitted by domestic Taxpayer.

(2) The Director General of Taxation may transfer the authority as referred to in
paragraph (1) in the form of delegation to the officials in the Directorate General
of Taxation.

(3) The domestic Taxpayer as referred to in paragraph (1) may submit application
for Advance Pricing Agreement upon Affiliation Transaction based on:

a. Taxpayer initiative, in the form of application for Unilateral Advance

Pricing Agreement or Bilateral or Multilateral Advance Pricing
Agreement; or

b. written notification from the Director General of Taxation in connection

with application for Bilateral or Multilateral Advance Pricing Agreement
submitted by foreign tax subject to Authorized Official of Partner of
Double Taxation Avoidance Agreement.

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 (4) Advance Pricing Agreement as referred to in paragraph (1) may include the
entire or part of Affiliation Transaction during Advance Pricing Agreement Period
and Rollback in the event that the Taxpayer asks for Rollback in application for
Advance Pricing Agreement.

(5) Affiliation Transaction as referred to in paragraph (3) may be in the form of

Affiliation Transaction between Taxpayer and other Domestic Taxpayer and/or
foreign tax subject.

(6) The rollback as referred to in paragraph (4) shall be effective insofar during the
tax year:

a. fact and condition of Affiliation Transaction is not different materially with

the fact and condition of Affiliation Transaction that has been agreed in
Advance Pricing Agreement;

b. stipulation is not expired yet;

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c. corporate income tax assessment letter has not been issued; and

d. not in the process of preliminary audit proof initial audit proof, criminal
act investigation in the field of taxation, criminal act prosecution in the
field of taxation, criminal act trials in the field of taxation, or serving
criminal sentence in the field of taxation.

(7) Advance Pricing Agreement as referred to in paragraph (1) shall be in the form
of agreement on:

a. criteria in Transfer Pricing; and

b. Transfer Pricing in advance, for Period of Advance Pricing Agreement

and Rollback in the event that the Taxpayer ask for Rollback in the
application for Advance Pricing Agreement.

(8) The criteria as referred to in paragraph (7) letter a shall at least contain:

a. identity of Affiliation Party included in Advance Pricing Agreement;

b. Affiliation Transaction included in Advance Pricing Agreement;

c. method of Transfer Pricing used;

d. method of implementation of Transfer Pricing that has been agreed; and

e. critical assumption influencing Transfer Pricing.

(9) Critical assumption as referred to in paragraph (8) letter e shall at least contain:

a. written and unwritten contractual provision related to Affiliation

Transaction;

b. function conducted by each transacting party, assets used, and risk

assumed occurred and borne by the parties;

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 c. characteristic of transaction and characteristic of the parties conducting
Affiliation Transaction; and

d. economical condition influencing Transfer Pricing.

(10) Transfer Pricing in advance as referred to in paragraph (7) letter b shall be

conducted by implementing Arm’s Length Principle in accordance with the
condition that has been occurred and predicted to occur during period of
Advance Pricing Agreement.

Article 56

(1) Domestic Taxpayer as referred to in Article 55 paragraph (3) may submit

application for Advance Pricing Agreement insofar as:

a. have fulfilled obligation to submit annual income tax return for corporate
based on provisions of laws and regulations in the field of taxation for 3
(three) tax years consecutively before the tax year when the application
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for Advance Pricing Agreement is submitted;

b. has been obligated and fulfilled obligation to organize and keep

Document of Transfer Pricing in the form of master document and local
document as referred to in Article 16 paragraph (2) letter a and letter b
for 3 (three) tax years consecutively before the tax year when the
application for Advance Pricing Agreement is submitted;

c. not in the process of preliminary audit proof, criminal acts investigation

in the field of taxation, criminal acts prosecution in the field of taxation,
criminal act trials in the field of taxation, or serving criminal sentence in
the field of taxation;

d. Affiliation Transaction proposed to be included in the application for

Advance Pricing Agreement as referred to in Article 55 paragraph (3)
shall be the Affiliation Transaction that has been reported by Taxpayer in
annual income tax return for corporate as referred to in letter a; and

e. proposal of Transfer Pricing in application for Advance Pricing

Agreement shall be prepared based on Arm’s Length Principle and does
not result in the Taxpayer's operating profit is less than the operating
profit reported in the annual income tax return for corporate as referred
to in letter a.

(2) The Domestic Taxpayer submitting application for Advance Pricing Agreement
as referred to in paragraph (1) must submit the application to the Director
General of Taxation through Tax Service Office where the Taxpayer is
registered.

(3) Submission of application for Advance Pricing Agreement as referred to in

paragraph (1) must fulfill the following requirements:

a. submitted in writing in Indonesian language by filling in application form

for Advance Pricing Agreement using the format example as set forth in
Attachment letter L which constitutes an inseparable part of this
Ministerial Regulation;

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 b. signed by the management whose name is listed in:

1. deed of establishment; or

2. deed of amendment, in the event that the management is

changed;

c. submitted:

1. in the period of 12 (twelve) months to 6 (six) months before

period of Advance Pricing Agreement is started, in the context of
application as referred to in Article 55 paragraph (3) letter a; or

2. before Period of Advance Pricing Agreement is started, in the

context of application as referred to in Article 55 paragraph (3)
letter b; and

d. attached by:
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1. statement letter that the Taxpayer is willing to complete all
required documents in the process of Advance Pricing
Agreement; and

2. statement letter that the Taxpayer is willing to implement the

agreement set forth in Advance Pricing Agreement.

(4) Provision concerning proposal of Transfer Pricing in application for Advance

Pricing Agreement does not result in the Taxpayer’s operating profit being less
as referred to in paragraph (1) letter e fulfilled insofar as the lowest profit level in
financial report projection during period of Advance Pricing Agreement is bigger
or same as the lowest profit level in annual income tax return for corporate in 3
(three) tax years before the tax year of application for Advance Pricing
Agreement is submitted.

(5) Profit level as referred to in paragraph (4) shall be the ratio between profit
before tax or commercial net income and business circulation or ratio between
profit before tax or commercial net income with total cost.

(6) In the event that application for Advance Pricing Agreement is submitted by
Taxpayer whose businesses are negatively affected by national disasters
stipulated by the Central Government, profit level in financial report projection
as referred to in paragraph (4) shall be the profit level of adjustment result in
normal condition.

(7) Financial report projection as referred to in paragraph (6) shall be prepared

using format example as set forth in Attachment letter M which constitutes an
inseparable part of this Ministerial Regulation.

(8) Submission of application for Advance Pricing Agreement as referred to in

paragraph (3) may be conducted:

a. directly; or

b. electronically.

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 (9) Submission of application for Advance Pricing Agreement electronically as
referred to in paragraph (8) letter b shall be conducted in the event that the
system has been available.

(10) Procedure for submission of application for Advance Pricing Agreement

electronically as referred to in paragraph (8) letter b shall be conducted in
accordance with the Ministerial Regulation regulating procedure for right
implementation and obligation fulfillment of taxation as well as issuance,
signing, and submission of tax decision or assessment electronically.

(11) The Director General of Taxation shall issue reception proof for the submission
of application for Advance Pricing Agreement as referred to in paragraph (2).

(12) The date included in the reception proof as referred to in paragraph (11) shall
be the reception date of application for Advance Pricing Agreement.

Article 57
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(1) Upon the application for Advance Pricing Agreement as referred to in Article 56
paragraph (2), the Director General of Taxation shall conduct research on:

a. requirements fulfillment completeness for submission of application for

Advance Pricing Agreement based on provisions as referred to in Article
56 paragraph (3); and

b. fulfillment of provision on Taxpayer that may submit application for

Advance Pricing Agreement as referred to in Article 56 paragraph (1).

(2) The Director General of Taxation shall follow up research result as referred to in
paragraph (1) by issuing written notification whether application for Advance
Pricing Agreement may be followed up or not to:

a. Taxpayer; and/or

b. Authorized Official of Partner of Double Taxation Avoidance Agreement,

in the context of application for Bilateral or Multilateral Advance Pricing
Agreement,

within no later than 1 (one) month after the reception date as referred to in
Article 56 paragraph (12).

(3) In the event that the period as referred to in paragraph (2) has been exceeded
and the Director General of Taxation has not issued written notification, the
application for Advance Pricing Agreement submitted by Taxpayer shall be
deemed as capable to be followed up and the Director General of Taxation shall
issue written notification within no later than 1 (one) month after the time limit as
referred to in paragraph (2) is exceeded.

(4) In the event that the notification of application for Bilateral or Multilateral
Advance Pricing Agreement to the Authorized Official of Partner of Double
Taxation Avoidance Agreement is not receiving written response within 8 (eight)
months period since the date of written notification as referred to in paragraph
(2), the Director General of Taxation shall issue written notification on the
termination of Advance Pricing Agreement process to:

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 a. the Taxpayer submitting application for Advance Pricing Agreement; and

b. the Authorized Official of Partner of Double Taxation Avoidance

Agreement.

(5) In the event that the process of application for Advance Pricing Agreement
cannot be followed up as referred to in paragraph (2) and application process of
Advance Pricing Agreement is discontinued as referred to in paragraph (4), the
Taxpayer may re-submit application for Advance Pricing Agreement insofar as it
fulfills the provisions as referred to in Article 56 paragraph (1) and paragraph
(3).

Article 58

(1) Upon the application for Advance Pricing Agreement that may be followed up as
referred to in Article 57 paragraph (2) or considered able to be followed up as
referred to in Article 57 paragraph (3), the Taxpayer must submit completion of
application for Advance Pricing Agreement directly to the Director General of
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Taxation through Director of International Taxation in the form of hardcopy
and/or softcopy.

(2) Completion of application for Advance Pricing Agreement as referred to in

paragraph (1) shall be submitted within no later than 2 (two) months after the
date of notification that the application for Advance Pricing Agreement may be
followed up as referred to in Article 57 paragraph (2) or paragraph (3).

(3) Completion of application for Advance Pricing Agreement as referred to in

paragraph (1) shall at least in the form of:

a. financial report that has been audited by public accountant for the last 3
(three) tax years before the tax year when application of Advance
Pricing Agreement is submitted;

b. Document of Transfer Pricing for the last 3 (three) tax years before the
tax year when application of Advance Pricing Agreement is submitted;
and

c. document containing detail explanation on the implementation of Arm’s

Length Principle for every Affiliation Transaction proposed to be included
in the Advance Pricing Agreement in Indonesian Language.

(4) The detail explanation as referred to in paragraph (3) letter c shall at least
contain information as set forth in Attachment letter N which constitutes an
inseparable part of this Ministerial Regulation.

(5) The Director General of Taxation shall issue reception proof upon the
submission of completion of application for Advance Pricing Agreement directly
as referred to in paragraph (1).

(6) The date as set forth in the reception proof of completion of application for
Advance Pricing Agreement as referred to in paragraph (5) shall be the date of
reception of completion of application for Advance Pricing Agreement.

(7) In the event that the completion of application for Advance Pricing Agreement
as referred to in paragraph (3) is not submitted by Taxpayer in the period as

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 referred to in paragraph (2), the Director General of Taxation shall issue written
notification on termination of Advance Pricing Agreement process to:

a. Taxpayer; and

b. Authorized Official of Partner of Double Taxation Avoidance Agreement,

in the event of application for Bilateral or Multilateral Advance Pricing
Agreement.

(8) In the event that the process of application for Advance Pricing Agreement is
terminated as referred to in paragraph (7), the Taxpayer may re-submit the
application for Advance Pricing Agreement insofar as fulfilling the provision as
referred to in Article 56 paragraph (1) and paragraph (3).

Part Two
Procedure for Settlement of Application for
Advance Pricing Agreement
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Section 1
Material Testing of Settlement of Application for
Advance Pricing Agreement

Article 59

(1) Upon the application for Advance Pricing Agreement that has fulfilled the
completeness as referred to in Article 58 paragraph (3), the Director General of
Taxation shall conduct material testing.

(2) In material testing as referred to in paragraph (1), the Director General of

Taxation shall have authority to:

a. conduct discussion with the Taxpayer related to the application for

Advance Pricing Agreement of Taxpayer;

b. conduct review to the business activities location of Taxpayer and/or

Affiliation Party;

c. interview the management and/or employees of Taxpayer;

d. ask for additional data and/or information in the form of proof, both in the
form of document or information, from the Taxpayer;

e. ask for data and/or information in the form of proof, both in the form of
document or information, from the Affiliation Party or other relevant
parties;

f. ask for taxation exchange of information;

g. ask for information and/or proof or explanation from Financial Service

Institution, other Financial Service Institutions, and/or other entities;
and/or

h. ask for assessment activities.

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 (3) In the event that it is required for material testing as referred to in paragraph (1),
the Director General of Taxation may conduct Audit for other purposes in
accordance with provisions of laws and regulations in the field of taxation.

(4) Audit for other purposes as referred to in paragraph (3) may be conducted in
the event that the Taxpayer:

a. has never been Audited related to Transfer Pricing upon Affiliation

Transaction proposed to be included in Advance Pricing Agreement as
referred to in Article 55 paragraph (3) to 3 (three) tax years before the
tax year when the application for Advance Pricing Agreement is
submitted; and/or

b. submits request on Rollback in the application for Advance Pricing

Agreement.

(5) Material testing as referred to in paragraph (1) shall be conducted by

implementing Arm’s Length Principle.
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(6) In material testing as referred to in paragraph (1), the domestic Taxpayer as
referred to in Article 55 paragraph (3) shall be obligated to:

a. attend discussion as referred to in paragraph (2) letter a;

b. provide observation opportunity to the business activity location as

referred to in paragraph (2) letter b;

c. provide opportunity to the Director General of Taxation to interview

management and/or employees of Taxpayer as referred to in paragraph
(2) letter c; and

d. provide data and/or information addition in the form of proof, both

document or explanation as referred to in paragraph (2) letter d.

(7) Document of Taxpayer used during material testing process as referred to in

paragraph (1) cannot be used by the Director General of Taxation as the basis
to conduct Audit, audit of preliminary proof, or criminal act investigation in the
field of taxation.

Section 2
Negotiation of Advance Pricing Agreement

Article 60

(1) The Director General of Taxation shall conduct negotiation of Advance Pricing
Agreement with:

a. Taxpayer, in the event of Unilateral Advance Pricing Agreement; or

b. Authorized Official of Partner of Double Taxation Avoidance Agreement,

in the event of Bilateral or Multilateral Advance Pricing Agreement.

(2) Negotiation of Unilateral Advance Pricing Agreement as referred to in paragraph

(1) letter a must:

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 a. be started within no later than 6 (six) months since the Taxpayer submits
completion of application for Advance Pricing Agreement in the period
as referred to in Article 58 paragraph (2); and

b. be settled within 12 (twelve) months since the negotiation of Advance

Pricing Agreement started as referred to in letter a.

(3) Negotiation of Bilateral or Multilateral Advance Pricing Agreement as referred to

in paragraph (1) letter b shall be settled in the period in accordance with
provisions on Mutual Agreement Procedure as referred to in Article 45
paragraph (3) and paragraph (4).

(4) In the event that during the negotiation of Advance Pricing Agreement as
referred to in paragraph (1), it is known that the Taxpayer is under the process
of preliminary proof audit , criminal act investigation in the field of taxation,
criminal act prosecution in the field of taxation, criminal act trials in the field of
taxation, or serving criminal sentence in the field of taxation, the Director
General of Taxation shall terminate process of Advance Pricing Agreement and
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issue written notification on the termination of process of Advance Pricing
Agreement to:

a. the Taxpayer; and

b. Authorized Official of Partner of Double Taxation Avoidance Agreement,

in the event of application for Bilateral or Multilateral Advance Pricing
Agreement.

Article 61

(1) The results of negotiation of Advance Pricing Agreement as referred to in Article

60 paragraph (1) may consist of agreement or disagreement on criteria in
Transfer Pricing and Transfer Pricing in advance as referred to in Article 55
paragraph (7).

(2) In negotiation of Advance Pricing Agreement as referred to in Article 60

paragraph (1), the Director General of Taxation may disagree Advance Pricing
Agreement in the event that:

a. Affiliation Transaction is not based on economic motives;

b. economic substance of Affiliation Transaction is different with the formal

form;

c. Affiliation Transaction shall be conducted with one of the objectives to

minimize tax charge;

d. information and/or proof or explanation submitted by the Taxpayer is

incorrect or not conformed with the actual condition;

e. information and/or proof or explanation related to the implementation of

authority as referred to in Article 59 paragraph (2) letter d may not be
obtained by Director General of Taxation within 21 (twenty one) calendar
days after the date of written request; and/or

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 f. corporate income tax assessment letter has been issued in tax year in
the Periods of Advance Pricing Agreement or Roll Back.

(3) The results of negotiation of Advance Pricing Agreement shall be considered

containing disagreement as referred to in paragraph (1) in the event that:

a. negotiation of Advance Pricing Agreement does not result in agreement

until the end of period of Advance Pricing Agreement negotiation as
referred to in Article 60 paragraph (2) or paragraph (3); or

b. Director General of Taxation shall receive written notification from

Authorized Official of Partner of Double Taxation Avoidance Agreement
that negotiation of Advance Pricing Agreement cannot be conducted.

(4) In the event that negotiation of Advance Pricing Agreement resulting in the
disagreement as referred to in paragraph (1), the Director General of Taxation
shall terminate process of Advance Pricing Agreement and issue written
notification to the Taxpayer.
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(5) The result of Advance Pricing Agreement negotiation containing agreement as
referred to in paragraph (1) shall be entered into:

a. Advance Pricing Agreement Document, in the event of Unilateral

Advance Pricing Agreement; or

b. Mutual Agreement in accordance with Mutual Agreement Procedure, in

the event of Bilateral or Multilateral Advance Pricing Agreement.

(6) Advance Pricing Agreement Script as referred to in paragraph (5) letter a shall
be prepared using format example as set forth in the Attachment letter O which
constitutes an inseparable part of this Ministerial Regulation.

(7) Based on Advance Pricing Agreement Script as referred to in paragraph (5)

letter a, the Director General of Taxation shall issue decision letter of
enforcement of Advance Pricing Agreement within no later than 1 (one) month
since the Advance Pricing Agreement Script is signed.

(8) Based on Mutual Agreement as referred to in paragraph (5) letter b, Director

General of Taxation shall issue decision letter of enforcement of Advance
Pricing Agreement within no later than 1 (one) month since:

a. reception date of written notification from the Authorized Official of

Partner of Double Taxation Avoidance Agreement that Mutual
Agreement may be conducted; and

b. submission date of written notification to the Authorized Official of

Partner of Double Taxation Avoidance Agreement that the Mutual
Agreement may be conducted.

(9) Decision Letter of enforcement of Advance Pricing Agreement as referred to in

paragraph (7) and paragraph (8) shall be prepared using format example as set
forth in Attachment letter P and Q which constitutes an inseparable part of this
Ministerial Regulation.

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 (10) Decision Letter of enforcement of Advance Pricing Agreement as referred to in
paragraph (7) and paragraph (8) shall be submitted to:

a. Taxpayer submitting application for Advance Pricing Agreement; and

b. work unit in the Directorate General of Taxation having authority to

follow up.

Article 62

(1) In the event that:

a. negotiation of Bilateral or Multilateral Advance Pricing Agreement

resulting in disagreement as referred to in Article 61 paragraph (1); or

b. process of Bilateral or Multilateral Advance Pricing Agreement is

terminated as a result that Authorized Official of Partner of Double
Taxation Avoidance Agreement does not submit written response as
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referred to in Article 57 paragraph (4),

Taxpayer may submit application for Unilateral Advance Pricing Agreement by

considering provisions as referred to in article 56 paragraph (3) letter a dan
letter b, to the Director General of Taxation through Tax Service Office where
Taxpayer is registered within no later than 14 (fourteen) calendar days after the
written notification date as referred to in Article 61 paragraph (4) or Article 57
paragraph (4).

(2) Upon application for Unilateral Advance Pricing Agreement submitted as

referred to in paragraph (1), the Director General of Taxation shall conduct
negotiation with the Taxpayer within the period at the longest:

a. 6 (six) months since the reception of application, in the event that the
application is submitted as Bilateral or Multilateral Advance Pricing
Agreement resulting in disagreement as referred to in paragraph (1)
letter a; or

b. 12 (twelve) months since the reception of application, in the event that

that the application is submitted as a result that process of Bilateral or
Multilateral Advance Pricing Agreement is terminated as referred to in
paragraph (1) letter b.

(3) In the event that until the time limit as referred to in paragraph (2), agreement
has not been achieved, the results of negotiation of Unilateral Advance Pricing
Agreement shall be deemed as disagreement as referred to in Article 61
paragraph (1).

Part Three
Procedure for Revocation of Application for
Advance Pricing Agreement

Article 63

(1) Application for Advance Pricing Agreement as referred to in Article 55

paragraph (3) may be submitted for revocation on application for Advance
Pricing Agreement by Taxpayer.

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 (2) Revocation on application for Advance Pricing Agreement as referred to in
paragraph (1) must fulfill the following requirements:

a. it must be submitted in writing in Indonesian language by mentioning

reasons of revocation;

b. it must be submitted before agreement is reached; and

c. it must be signed by the management whose names are listed in deed

of establishment or deed of amendment, in the event that the
management is changed.

(3) Revocation on application for Advance Pricing Agreement as referred to in

paragraph (1) shall be submitted by the Taxpayer to the Director General of
Taxation through Director of International Taxation.

(4) Revocation on application for Advance Pricing Agreement as referred to in

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paragraph (3) shall be prepared using format example as set forth in
Attachment letter R which constitutes an inseparable part of this Ministerial
Regulation.

(5) Application for revocation submitted by the Requester as referred to in

paragraph (1) may be submitted:

a. directly; or

b. electronically.

(6) Submission on application for revocation electronically as referred to in

paragraph (5) letter b shall be conducted in the event that the system has been
available.

(7) Procedure for submission of application for revocation as referred to in

paragraph (5) letter b shall be conducted in accordance with the Ministerial
Regulation regulating procedure for right implementation and obligation
fulfillment of taxation as well as issuance, signing, and submission of tax
decision or assessment electronically.

(8) Director General of Taxation shall issue reception proof upon the submission of
revocation on application for Advance Pricing Agreement as referred to in
paragraph (3).

Article 64

(1) Upon revocation of application for Advance Pricing Agreement submitted as

referred to in Article 63 paragraph (1), the Director General of Taxation shall
conduct research on the fulfillment of requirements of revocation on the
application for Advance Pricing Agreement as referred to in Article 63 paragraph
(2).

(2) The Director General of Taxation shall follow up research result as referred to in
paragraph (1) by issuing written notification approval or disapproval of the
revocation of the Advance Pricing Agreement application to:

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 a. Taxpayer; and

b. The Authorized Official of Partner of Double Taxation Avoidance

Agreement, in the event of Bilateral or Multilateral Advance Pricing
Agreement,

within no later than 14 (fourteen) calendar days after the reception date of
revocation on application for Advance Pricing Agreement as referred to in Article
63 paragraph (8).

(3) In the event that the period as referred to in paragraph (2) has been exceeded
and the Director General of Taxation has not issued written notification,
revocation on application for Advance Pricing Agreement shall be deemed as
approved and the Director General of Taxation shall issue written notification
within no later than 14 (fourteen) calendar days after the time limit as referred to
in paragraph (2) is exceeded.

(4) In the event that based on research of requirements fulfillment as referred to in

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paragraph (1), revocation on application for Advance Pricing Agreement is not
fulfilling the requirements, revocation on application for Advance Pricing
Agreement shall not be approved and application for Advance Pricing
Agreement remains to be continued.

(5) In the event that revocation on application for Advance Pricing Agreement as
referred to in Article 63 paragraph (1) is submitted after negotiation of Advance
Pricing Agreement is started, the Taxpayer cannot re-submit application for
Advance Pricing Agreement for the tax year included in application for Advance
Pricing Agreement that is revoked.

Article 65

(1) In the event that:

a. revocation as referred to in Article 64 paragraph (5) is conducted upon

application for Bilateral or Multilateral Advance Pricing Agreement; and

b. revocation as referred to in letter a fulfills the criteria as referred to in

Article 63 paragraph (2),

Taxpayer may submit application for Unilateral Advance Pricing Agreement by

considering provisions as referred to in article 56 paragraph (3) letter a and
letter b to the Director General of Taxation through Tax Services Office where
the Taxpayer is registered no later than 14 (fourteen) calendar days after the
date of written notification as referred to in Article 64 paragraph (2) or paragraph
(3).

(2) Upon application for Unilateral Advance Pricing Agreement as referred to in

paragraph (1), the Director General of Taxation shall implement negotiation of
Advance Pricing Agreement with Taxpayer within the period of:

a. 6 (six) months, in the event that negotiation of Bilateral or Multilateral

Advance Pricing Agreement has been conducted; or

b. 12 (twelve) months, in the event that negotiation of Bilateral or

Multilateral Advance Pricing Agreement has not been conducted,

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 since the reception date of application for Unilateral Advance Pricing Agreement
as referred to in paragraph (1).

(3) Application for Unilateral Advance Pricing Agreement as referred to in

paragraph (1) shall be prepared using format example of proposal of application
for Advance Pricing Agreement as referred to in Article 56 paragraph (3).

(4) In the event that until the period as referred to in paragraph (2) there is no
agreement reached, the results of negotiation of Unilateral Advance Pricing
Agreement shall be deemed as disagreement as referred to in Article 61
paragraph (1).

(5) Written notification submitted by the Authorized Official of Partner of Double

Taxation Avoidance Agreement concerning revocation on application for
Bilateral or Multilateral Advance Pricing Agreement shall be deemed as written
notification from the Authorized Official of Partner of Double Taxation Avoidance
Agreement that the negotiation of Advance Pricing Agreement may not be
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conducted as referred to in Article 61 paragraph (3) letter b.

Part Four
Procedure for Implementation of
Advance Pricing Agreement

Article 66

(1) ++Taxpayer shall be obligated to implement Advance Pricing Agreement

contained in decision letter of enforcement of Advance Pricing Agreement as
referred to in Article 61 paragraph (7) or paragraph (8) in accordance with the
provisions of laws and regulations in the field of taxation.

(2) Agreement in Advance Pricing Agreement as referred to in paragraph (1) must

be implemented in the policy of Taxpayer Transfer Pricing and its
implementation must be entered into Document of Transfer Pricing for the
Period of Advance Pricing Agreement.

(3) In the event that Period of Advance Pricing Agreement and/or Rollback:

a. annual income tax return for corporate has been submitted;

b. the Director General of Taxation has not conducted Audit action; and

c. there is underpayment of payable tax income calculated based on

agreement in Advance Pricing Agreement,

Taxpayer must conduct correction of annual income tax return for corporate in
accordance with Advance Pricing Agreement contained in decision letter of
enforcement of Advance Pricing Agreement within no later than 1 (one) month
after the issuance of decision of enforcement of Advance Pricing Agreement.

(4) In the event that upon the Period of Advance Pricing Agreement and/or
Rollback, annual income tax returns for corporate as referred to in paragraph
(3) letter a is under Audit process, the Director General of Taxation shall issue
tax assessment letter by considering Advance Pricing Agreement contained in
the decision letter of enforcement of Advance Pricing Agreement.

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 (5) In the event that upon tax year in Period of Advance Pricing Agreement, tax
assessment letter has been issued, the Director General of Taxation shall
conduct correction on tax assessment letter by position in accordance with
provision as referred to in Law regarding General Provisions and Procedure for
Taxation by considering Advance Pricing Agreement contained in decision letter
of enforcement of Advance Pricing Agreement.

(6) In the event that there is an administrative sanction occurred as a result of:

a. correction on annual income tax returns for corporate as referred to in

paragraph (3);

b. issuance of tax assessment letter as referred to in paragraph (4); or

c. correction on tax assessment letter as referred to in paragraph (5),

Director General of Taxation shall eliminate administrative sanction in

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accordance with provisions as referred to in Law regarding General Provisions
and Procedure for Taxation.

Article 67

(1) Agreement in Advance Pricing Agreement as referred to in Article 66 paragraph

(2) shall not obstruct the Director General of Taxation to conduct Audit action,
preliminary proof audit, or criminal act investigation in the field of taxation in
accordance with the provisions of laws and regulations in the field of taxation.

(2) In the event that Taxpayer conduct agreement in Advance Pricing Agreement
and it is under Audit action, preliminary proof audit, or criminal act investigation
in the field of taxation as referred to in paragraph (1), the Director General of
Taxation may not conduct correction on Transfer Pricing of the transaction
included in Advance Pricing Agreement.

(3) Provisions as referred to in paragraph (2) shall not be effective in the event that
the Taxpayer:

a. submits annual income tax returns for corporate that its Transfer Pricing
is not in accordance with the agreement in Advance Pricing Agreement;

b. does not submit correction of annual income tax returns for corporate
until the time limit as referred to in Article 66 paragraph (3);

c. submits correction of annual income tax returns for corporate that its
Transfer Pricing is not in accordance with the agreement in Advance
Pricing Agreement; or

d. does not submit annual income tax returns for corporate for tax year in
the Period of Advance Pricing Agreement.

Part Five
Procedure for Evaluation of Advance Pricing Agreement

Section 1
Authority of Director General of Taxation To Conduct Evaluation

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 of Advance Pricing Agreement

Article 68

(1) The Director General of Taxation shall have authority to conduct supervision on
the implementation of Advance Pricing Agreement by Taxpayer.

(2) Supervision on implementation of Advance Pricing Agreement as referred to in

paragraph (1) shall be conducted through evaluation upon:

a. compliance of implementation of agreement in Advance Pricing

Agreement; and

b. conformity of criteria in Transfer Pricing on agreement in Advance

Pricing Agreement.

(3) In the context of evaluation as referred to in paragraph (2), The Director

General of Taxation shall have authority to:
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a. conduct discussion with Taxpayer related to the implementation of
agreement in Advance Pricing Agreement;

b. ask Taxpayer to provide the required information and/or proof or

explanation;

c. conduct review to the business location of Taxpayer and/or Taxpayer

Affiliation Party;

d. interview management and/or employees of Taxpayer; and/or

e. ask information and/or proof or explanation from Affiliation Party or other

relevant parties.

(4) In evaluation as referred to in paragraph (2), the Taxpayer shall be obligated to:

a. attend discussion as referred to in paragraph (3) letter a;

b. provide information and/or proof or explanation as referred to in

paragraph (3) letter b;

c. provide observation opportunity to the business location as referred to in

paragraph (3) letter c; and/or

d. provide opportunity to the Director General of Taxation to interview

management and/or employees of Taxpayer as referred to in paragraph
(3) letter d.

(5) In the event that based on evaluation result upon compliance on

implementation of agreement in Advance Pricing Agreement as referred to in
paragraph (2) letter a, it is found out that the Taxpayer does not implement
Advance Pricing Agreement contained in the decision letter of enforcement of
Advance Pricing Agreement, the Director General of Taxation shall follow up in
accordance with the prevailing provisions of laws and regulations of taxation.

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 (6) Follow up of the Director General of Taxation as referred to in paragraph (5)
shall be conducted by implementing Advance Pricing Agreement contained in
the decision letter of enforcement of Advance Pricing Agreement.

(7) Based on evaluation result as referred to in paragraph (2) letter b, the Director
General of Taxation shall have authority to conduct:

a. review Advance Pricing Agreement, insofar as there is a material

change upon fact and condition of Affiliation Transaction included in
Advance Pricing Agreement with critical assumption agreed in Advance
Pricing Agreement; or

b. cancellation of Advance Pricing Agreement contained in the decision

letter of enforcement of Advance Pricing Agreement,

before the Period of Advance Pricing Agreement is ended.

Section 2
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Review of Advance Pricing Agreement

Article 69

(1) Review of Advance Pricing Agreement shall be conducted based on:

a. evaluation result on agreement in Advance Pricing Agreement as

referred to in Article 68 paragraph (7); or

b. application for review of Advance Pricing Agreement submitted by

Taxpayer.

(2) Based on evaluation result on agreement in Advance Pricing Agreement as

referred to in paragraph (1) letter a, the Director General of Taxation shall issue
written notification to Taxpayer.

(3) Written notification to the Taxpayer as referred to in paragraph (2) shall contain:

a. change of material upon fact and condition of Affiliation Transaction

included in Advance Pricing Agreement with critical assumption agreed
in Advance Pricing Agreement; and

b. implementation of negotiation of Advance Pricing Agreement in the

context of review of Advance Pricing Agreement.

(4) Written notification as referred to in paragraph (2) shall be submitted before the
tax year when Advance Pricing Agreement review is ended.

(5) Application for review of Advance Pricing Agreement as referred to in paragraph

(1) letter b must be submitted to the Director General of Taxation through
Director of International Taxation by filling in application form for review of
Advance Pricing Agreement.

(6) Application form for review of Advance Pricing Agreement as referred to in

paragraph (5) shall be prepared using format example as set forth in
Attachment letter S which constitutes an inseparable part of this Ministerial
Regulation.

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 (7) Submission of application for review of Advance Pricing Agreement as referred
to in paragraph (5) may be conducted:

a. directly; or

b. electronically.

(8) Submission of application for review of Advance Pricing Agreement

electronically as referred to in paragraph (7) letter b shall be conducted in the
event that the system has been available.

(9) Procedure for submission of application for review of Advance Pricing

Agreement as referred to in paragraph (7) letter b shall be conducted in
accordance with the Ministerial Regulation regulating procedure for right
implementation and obligation fulfillment of taxation as well as issuance,
signing, and submission of tax decision or assessment electronically.
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(10) Director General of Taxation shall issue reception proof on submission of
application for review of Advance Pricing Agreement as referred to in paragraph
(7).

(11) The date written in the reception proof as referred to in paragraph (10) shall be
the reception date of application for review of Advance Pricing Agreement.

(12) Provision on research, submission of application completion, material testing,

and negotiation of application for Advance Pricing Agreement as referred to in
Article 57 to Article 60 shall be applied mutatis mutandis on application for
review of Advance Pricing Agreement as referred to in paragraph (5).

(13) Negotiation result of review of Advance Pricing Agreement shall be entered into
the revision on Script of Advance Pricing Agreement or Mutual Agreement.

(14) Upon the revision in Script of Advance Pricing Agreement or revision on Mutual
Agreement as referred to in paragraph (13), the Director General of Taxation
shall issue decision on the revision of Advance Pricing Agreement by
mentioning the tax year when Period of Advance Pricing Agreement is
reviewed.

(15) Decision concerning revision on Advance Pricing Agreement as referred to in

paragraph (14) shall be prepared using format example as set forth in
Attachment letter T and U which constitutes an inseparable part of this
Ministerial Regulation.

Section 3
Cancellation of Advance Pricing Agreement

Article 70

(1) Based on evaluation result as referred to in Article 68 paragraph (7), there is an

indication that the Taxpayer:

a. submits information and/or proof or explanation that is incorrect or not

conformed to the actual condition; and/or

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 b. does not submit information and/or proof or explanation that is:

1. known and worth to be known by the Taxpayer; and

2. may influence the agreement result in Advance Pricing

Agreement,

Director General of Taxation shall submit written notification to the

Taxpayer to conduct clarification upon non-conformance of information
and/or proof or explanation submitted during process of Advance Pricing
Agreement.

(2) The Taxpayer must submit written response to the Director General of Taxation
through the Director of International Taxation upon written notification as
referred to in paragraph (1) within 21 (twenty-one) calendar days after the
written notification.

(3) Director General of Taxation shall conduct research on written response of

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Taxpayer yang submitted within the period as referred to in paragraph (2).

(4) Director General of Taxation shall cancel Advance Pricing Agreement contained
in decision letter of enforcement of Advance Pricing Agreement as referred to in
Article 61 paragraph (7) or paragraph (8) in the event that the Taxpayer:

a. is proven to fulfill provisions as referred to in paragraph (1), based on

research as referred to in paragraph (3); or

b. is not submitting written response or submitting written response,

however, exceeding the period as referred to in paragraph (2).

(5) In the context of cancellation of Advance Pricing Agreement as referred to in

paragraph (4), the Director General of Taxation shall issue:

a. decision letter of cancellation of Advance Pricing Agreement to the

Taxpayer prepared using format example as set forth in Attachment
letter V which constitutes an inseparable part of this Ministerial
Regulation; and

b. notification on cancellation of Advance Pricing Agreement to the

Authorized Official of Partner of Double Taxation Avoidance Agreement,
in the event of Bilateral or Multilateral Advance Pricing Agreement.

(6) The Director General of Taxation shall issue decision letter of cancellation of
Advance Pricing Agreement as referred to in paragraph (5) letter a to the
Taxpayer within 21 (twenty-one) calendar days after:

a. Taxpayer’s written response is received, in the event that the

cancellation of agreement in Advance Pricing Agreement is based on
research result as referred to in paragraph (3); or

b. the period is exceeding as referred to in paragraph (2).

(7) In the event that the Director General of Taxation cancels Advance Pricing
Agreement as referred to in paragraph (4):

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 a. The Taxpayer shall not re-submit application for Advance Pricing
Agreement for the Period of Advance Pricing Agreement and/or Rollback
included in the cancelled Advance Pricing Agreement; and

b. Director General of Taxation may conduct Audit action, preliminary proof

audit, and/or criminal act investigation in accordance with the provisions
of laws and regulations in the field of taxation.

Part Six
Procedure for Renewal of Advance Pricing Agreement

Article 71

(1) Taxpayer may submit application for renewal of Advance Pricing Agreement to
the Director General of Taxation through Tax Service Office where the Taxpayer
is registered.

(2) Application for renewal of Advance Pricing Agreement as referred to in

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paragraph (1) must be submitted within the period of 12 (twelve) months to 6
(six) months before the Period of Advance Pricing Agreement submitted for
renewal is started.

(3) Application form for renewal of Advance Pricing Agreement as referred to in

paragraph (1) shall be prepared using format example as set forth in
Attachment letter W which constitutes an inseparable part of this Ministerial
Regulation.

(4) Submission of application for renewal of Advance Pricing Agreement as referred

to in paragraph (1) may be conducted:

a. directly; or

b. electronically.

(5) Submission of application for renewal of Advance Pricing Agreement

electronically as referred to in paragraph (4) letter b shall be conducted in the
event that the system has been available.

(6) Procedure for submission of application for renewal of Advance Pricing

Agreement as referred to in paragraph (4) letter b may be conducted in
accordance with the Ministerial Regulation regulating procedure for right
implementation and obligation fulfillment of taxation as well as issuance,
signing, and submission of tax decision or assessment electronically.

(7) The Director General of Taxation shall issue reception proof upon submission of
application for renewal of Advance Pricing Agreement as referred to in
paragraph (1).

(8) The date written in the reception proof as referred to in paragraph (7) shall be
the reception date of application for renewal of Advance Pricing Agreement.

(9) Upon application for renewal of Advance Pricing Agreement as referred to in

paragraph (1), the Taxpayer must submit completion as referred to in Article 58
paragraph (1) and paragraph (2).

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 (10) Provision concerning submission of completion of application, material testing,
and negotiation on application for Advance Pricing Agreement as referred to in
Article 58 to Article 60 shall be applied mutatis mutandis on application for
renewal of Advance Pricing Agreement as referred to in paragraph (1).

(11) Renewal of Advance Pricing Agreement as referred to in paragraph (1) may

only able to be provided 1 (one) time for 1 (one) Period of Advance Pricing
Agreement.

CHAPTER IX
SUBMISSION OF DOCUMENT AND DECISION LETTER

Article 72

(1) Submission of document and decision letter in the context of settlement of

Mutual Agreement Procedure and Advance Pricing Agreement may be
conducted:
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a. directly;

b. by post, expedition service company, or courier service with proof of mail

delivery; or

c. electronically.

(2) Submission of document and decision letter as referred to in paragraph (1)

letter c shall be conducted in the event that the system has been available.

(3) Procedure for submission of document and decision letter as referred to in

paragraph (1) letter c shall be in accordance with the Ministerial Regulation
regulating procedure for right implementation and obligation fulfillment of
taxation as well as issuance, signing, and submission of tax decision or
assessment electronically.

CHAPTER X
TRANSITIONAL PROVISION

Article 73

At the time this Ministerial Regulation comes into effect:

1. to the request on implementation of Mutual Agreement Procedure conducted

based on Regulation of The Minister of Finance Number 49/PMK.03/2019
regarding Procedure For The Implementation Of Mutual Agreement Procedure
(Official Gazette of the Republic of Indonesia Year 2019 Number 468) and
Decision Letter of Mutual Agreement has not been issued yet, shall be followed
up based on this Ministerial Agreement;

2. to the application for Advance Pricing Agreement implemented based on

Regulation of Minister of Finance Number 22/PMK.03/2020 regarding
Procedure For The Implementation Of Transfer Pricing Agreement (Advance
Pricing Agreement) (Official Gazette of The Republic of Indonesia Year 2020
Number 262) and decision letter of enactment of Advance Pricing Agreement
has not been issued yet, decision letter on change of Advance Pricing

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 Agreement, or decision letter of cancellation of agreement in Advance Pricing
Agreement, shall be followed up based on this Ministerial Regulation; and

3. to the obligation to organize, keep, and submit Document of Transfer Pricing for
tax year 2024 and so on shall be implemented based on this Ministerial
Regulation.

CHAPTER XI
CLOSING PROVISION

Article 74

At the time this Ministerial Regulation comes into effect, provisions in:

1. Regulation of Minister of Finance Number 213/PMK.03/2016 regarding The

Types Of Additional Documents And/Or Information That Must Be Maintained
By Taxpayers Conducting Transactions With Related Parties, And The
Procedures For Their Management (Official Gazette of The Republic of
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Indonesia Year 2016 Number 2120);

2. Regulation of Minister of Finance Number 49/PMK.03/2019 regarding

Procedure For The Implementation Of Mutual Agreement Procedure (Official
Gazette of the Republic of Indonesia Year 2019 Number 468); and

3. Regulation of Minister of Finance Number 22/PMK.03/2020 regarding

Procedure For The Implementation Of Transfer Pricing Agreement (Advance
Pricing Agreement) (Official Gazette of The Republic of Indonesia Year 2020
Number 262),

shall be revoked and declared as null and void.

Article 75

This Ministerial Regulation shall come into effect on the date of its promulgation.

For public cognizance, it is hereby ordered that this Ministerial Regulation be

promulgated in the Official Gazette of the Republic of Indonesia.

Stipulated in Jakarta
on 29 December 2023

MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,

signed

SRI MULYANI INDRAWATI

Promulgated in Jakarta
on 29 December 2023

DIRECTOR GENERAL
LAWS AND REGULATIONS
THE MINISTRY OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

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 signed

ASEP N. MULYANA

OFFICIAL GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2023 NUMBER 1116

Issued as a true copy,

Head of General Affairs Bureau
p.p.
Acting for Head of Administration of the Ministry

Electronically signed

DEWI SURIANI HASLAM

----------------------

NOTE
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Please reffer to the official version to see attachment.

Source: LOOSE LEAF OF REGULATION OF THE MINISTER OF FINANCE

YEAR 2023

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