Wednesday, December 16, 2009

With 58 Countries, Indonesia Counters Transfer Pricing

JAKARTA - To stop tax avoidance by transfer pricing (price manipulation), the government has established an agreement with 58 countries. This was stated by the Director of Enlightenment, Services and Public Relations of the Directorate General for Taxation Djoko Slamet Surjoputro, after opening the Seminar on Taxation, at Borobudur Hotel, Wednesday, Jakarta.

"There is an agreement to prevent tax avoidance, it includes approximately 58 countries."

According to him, Indonesia can't stand alone when it comes to the taxation of multinational companies.

"We guard our own taxation, we have to ensure that we receive our rights. If not, it's like subsidizing wealthier countries; do we want that to happen?"

He admitted that some countries have asked for bilateral meetings to discuss this issue, some countries have even promised to submit the asset data of Indonesians living in those foreign countries. He believes that this agreement will be realized soon.

"Some countries have asked for bilateral meetings, and some have even promised the directorate general for taxation the asset data of Indonesians [living in those foreign countries]. So, soon everything will flow into motion." Djoko added that his institution also welcomes the G-20 statement to purge tax haven countries.

With the agreement between 58 countries, the tax income in the future is expected to rise. The reason is because transfer pricing has the potential hurt the state finance.

"There is the potential loss for the state finance due to transfer pricing. With this agreement, tax payers are expected to mend their ways and comply to the regulation."


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