The use of transfer pricing documentation (TP Doc) in customs valuation has been a topic of interest and debate among multinational enterprises (MNEs) and customs authorities alike. While TP documentation and customs valuation both address intercompany transactions, they serve distinct purposes and are governed by different regulatory frameworks.

In Indonesia, TP Doc prepared for tax purposes cannot automatically be used to determine customs value. Although TP Doc provides information on transfer prices in affiliated transactions, customs authorities follow specific methods and regulations for setting customs value under the prevailing customs laws. Customs value determination is regulated by Customs Law No. 17 of 2006, specifically Article 15. This law outlines a structured hierarchy for calculating customs value, beginning with the transaction value as the primary basis. If the transaction value cannot be applied, customs authorities may use the transaction value of identical goods or, if unavailable, the transaction value of similar goods. When these methods are unsuitable, the deductive method or computed method may be used. If all other approaches are exhausted, a fallback method based on reasonable interpretation consistent with customs valuation principles may be applied, provided the data is available within the customs territory. These procedures are further detailed in Minister of Finance Regulation No. 144/PMK.04/2022.

According to the Directorate General of Customs and Excise (DGCE), values indicated in TP Doc can only serve as a reference and cannot be directly substituted for customs value. However, TP Doc can assist customs authorities in assessing the conditions of import transactions between affiliated parties. Guidelines from the World Customs Organization (WCO) support using TP Doc as an informational source to evaluate the arm’s length nature of transactions between related parties, providing customs officials with context to clarify pricing structures in such transactions.

In summary, while TP Doc can offer supplementary information, customs value determination must still adhere to the hierarchical methods and regulations mandated by customs law and its associated regulations.

Disclaimer:
This communication contains general information only. Before making any decision or taking any action that may affect your tax and finances or your business, you should consult a qualified professional adviser. GNV shall not be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication.

Author : Ahdianto