Analisis Penerapan Hukum Pajak Atas Praktik Transfer Pricing dalam Transaksi Pembayaran Royalti Hak Paten oleh Perusahaan Afiliasi di Indonesia Kepada Perusahaan Multinasional di Luar Negeri

Abstract

Article 18 paragraph (3) of Law Number 36 of 2008 authorizes the Director General of Taxes to make corrections on royalty payments made by affiliated companies in Indonesia to multinational companies abroad based on the arm's length principle. But this action can result in the company being inefficient in allocating resources. Based on the description of the background, it can be formulated several main problems discussed in this study, namely; what are the factors that drive the practice of transfer pricing, how is the application of arm’s length principle in tax law and how tax law in Indonesia regulates and determines the distribution and efficiency of resource allocation in patent license transactions by multinational companies to affiliated companies in Indonesia. This research is a normative juridical research and is prescriptive. This research uses both statutory approach and case approach where several cases are studied for reference to a legal issue. Based on the results of the study, it is known that the factors that encourage transfer pricing practices in patent licenses are the factors of the country of residence, capital and know-how contracts. Regarding the application of arm’s length principle, it is known that the application of the principle has not used the most appropriate method. Tax law plays a role in avoiding double taxation and regulates and determines efficiency in terms of affiliated companies following the provisions stipulated in the Income Tax Law and its implementing rules.