TRANSFER PRICING DISPUTES IN MULTINATIONAL CORPORATIONS: A LEGAL ANALYSIS OF INDONESIA’S APA AND MAP FRAMEWORK POST-BEPS
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Abstract
The intensification of cross-border economic activities among multinational corporations (MNCs) has significantly increased the complexity and frequency of transfer pricing disputes. In response, Indonesia has adopted a series of legal and administrative reforms to enhance the certainty, fairness, and transparency of its dispute-resolution mechanisms, particularly through the implementation of Advance Pricing Agreements (APAs) and the Mutual Agreement Procedure (MAP). These reforms align with the OECD Base Erosion and Profit Shifting (BEPS) Action Plan, especially Actions 8–10 on transfer pricing and Action 14 on improving dispute resolution. Despite such progress, Indonesia continues to face doctrinal ambiguities, institutional constraints, and compliance challenges that impede the effective operation of APA and MAP frameworks. This article conducts a legal analysis of Indonesia’s transfer pricing dispute-resolution regime in the post-BEPS era, evaluating its statutory design, administrative practice, and alignment with international standards. Using normative legal methodology complemented by comparative insights from OECD member jurisdictions, the study examines the substantive rules governing APAs and MAP, the procedural safeguards afforded to taxpayers, and the enforcement powers of the Directorate General of Taxes (DGT). The findings reveal structural issues, including limited taxpayer access, procedural delays, insufficient transparency, and discrepancies between domestic legal norms and treaty-based obligations. The article argues that Indonesia must strengthen legal certainty, institutional coordination, and adherence to international dispute-resolution commitments to achieve a more predictable and equitable taxation system. Building on comparative lessons, this study proposes a refined legal framework for APAs and MAP that enhances Indonesia’s compliance with global transfer pricing standards while promoting sustainable tax administration.
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