Evaluation of Capacity Adjustments for Transfer Pricing Disputes: A Case Study of Tax Court Decisions
- 10.2991/aebmr.k.220602.026How to use a DOI?
- transfer pricing; capacity adjustment; tax dispute
This study evaluates the implementation of capacity adjustment using the transactional net margin method (TNMM) on two appeal decisions of transfer pricing dispute based on the tax consultant’s point of view. Capacity adjustment is one of the techniques described in the OECD transfer pricing guidelines (OECD TPG) for transfer pricing analysis of companies that have not yet reached their optimal production capacity. However, in practice there are differences in interpretation between the Indonesian tax authorities and the OECD TPG. The study uses a qualitative approach which consists of document analysis of the two appeal decisions and semi-structured interviews. Based on the results of the study, the implementation of capacity adjustment requires rational commercial reasons and the basis for proper calculations.
- © 2022 The Authors. Published by Atlantis Press International B.V.
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Cite this article
TY - CONF AU - Zulhanief Matsani AU - Abdul Haris Muhammadi PY - 2022 DA - 2022/06/13 TI - Evaluation of Capacity Adjustments for Transfer Pricing Disputes: A Case Study of Tax Court Decisions BT - Proceedings of the International Conference on Economics and Business Studies (ICOEBS 2022) PB - Atlantis Press SP - 205 EP - 210 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.220602.026 DO - 10.2991/aebmr.k.220602.026 ID - Matsani2022 ER -