Analysis of the Directorate General of Taxes' Measures to Safeguard Taxation on Cross-Border Transactions and Prevent Tax Evasion via Transfer Pricing
Keywords:
Transfer Pricing, Cross-Border, Taxes, AEOI, APA, MAP, Global Minimum Tax
Abstract
Global economic developments and the expansion of multinational enterprises have increased cross-border affiliated transactions, creating opportunities for tax avoidance through transfer pricing practices. This study analyzes the efforts of the Directorate General of Taxes (DGT) to safeguard Indonesia’s taxing rights, examines the development of transfer pricing regulations, and evaluates the effectiveness of oversight policies in addressing Base Erosion and Profit Shifting (BEPS). Using a qualitative method with a normative-juridical approach, the research draws on tax regulations, OECD documents, government publications, and relevant academic literature. The findings show that Indonesia has strengthened its transfer pricing framework through the implementation of the arm’s length principle, mandatory transfer pricing documentation (Master File, Local File, and Country-by-Country Report), the use of the Automatic Exchange of Information (AEoI), and the development of Advance Pricing Agreement (APA) and Mutual Agreement Procedure (MAP) mechanisms. Additionally, the OECD/G20 Inclusive Framework, including the Global Minimum Tax (Pillar Two), has helped reduce profit shifting to low-tax jurisdictions. Despite these measures, challenges remain, including limited comparable data, complex multinational structures, intangible assets, and the rapid growth of the digital economy. Strengthening tax administration, information technology, and international cooperation remains essential to ensuring sustainable revenue and tax equity
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Aulia, S. (2024). Comparative Studies of Tax Administration on Transfer Pricing. Journal of Governance and Administrative Reform, 5(1), 39–51. https://doi.org/10.20473/JGAR.V5I1.57398
Baker, P. L. (2014). An Analysis of Double Taxation Treaties and their Effect on Foreign Direct Investment. International Journal of the Economics of Business, 21(3), 341–377. https://doi.org/10.1080/13571516.2014.968454
Barokah, Z., & Sari, N. N. (2024). Cross-Border Related Party Sales, Tax Avoidance, and Tunneling: Regulatory Impacts on Indonesian Manufacturing Companies. The Indonesian Journal of Accounting Research, 27(2), 307–334. https://doi.org/10.33312/IJAR.801
Defi, D. (2024). International tax dispute resolution through mutual agreement procedure in Indonesia: Past, present, and future. Educoretax, 4(9), 1087–1106. https://doi.org/10.54957/EDUCORETAX.V4I9.1055
Dilaga, T. P., & Daryatno, A. B. (2025). Global Minimum Tax: Implications and Recommendations for Multinational Corporations. Journal Research of Social Science, Economics, and Management, 5(4), 3968–3980. https://doi.org/10.59141/JRSSEM.V5I4.1169
Harimurti, F. (2007). Taxation Aspects of Transfer Pricing Practices. JURNAL EKONOMI DAN KEWIRAUSAHAAN, 7(1). https://ejurnal.unisri.ac.id/index.php/Ekonomi/article/view/193
Hasan, M. I. (2002). Key Aspects of Research Methodology and Its Applications (1st ed.). Ghalia Indonesia.
Heilbron, F. E. (2026). Effectiveness Analysis Of The Mutual Agreement Procedure (MAP) As A Dispute Resolution Mechanism And The Advance Pricing Agreement (APA) As A Preventive Strategy For Transfer Pricing In Indonesia. EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi Dan Bisnis, 14(3), 3785–3794. https://doi.org/10.37676/EKOMBIS.V14I3.11645
Janeba, E., & Schjelderup, G. (2023). The Global Minimum Tax Raises More Revenues than You Think, or Much Less. www.RePEc.org
Johannesen, N. (2022). The global minimum tax. Journal of Public Economics, 212, 104709. https://doi.org/10.1016/J.JPUBECO.2022.104709
Kraus, S., Breier, M., Lim, W. M., Dabić, M., Kumar, S., Kanbach, D., Mukherjee, D., Corvello, V., Piñeiro-Chousa, J., Liguori, E., Palacios-Marqués, D., Schiavone, F., Ferraris, A., Fernandes, C., & Ferreira, J. J. (2022). Literature reviews as independent studies: guidelines for academic practice. Review of Managerial Science 2022 16:8, 16(8), 2577–2595. https://doi.org/10.1007/S11846-022-00588-8
Mulyani, H. S., Prihartini, E., & Sudirno, D. (2020). Analysis of Transfer Pricing Decisions Based on Taxes, Tunneling, and Exchange Rates. Jurnal Akuntansi Dan Pajak, 20(2), 171–181.
OECD. (2022). Transfer pricing | OECD. https://www.oecd.org/en/topics/transfer-pricing.html
OECD. (2025). Base erosion and profit shifting (BEPS) | OECD. OECD. https://www.oecd.org/en/topics/base-erosion-and-profit-shifting-beps.html
Oktaviani, D. T., Tambunan, M. R. U. D., Oktaviani, D. T., & Tambunan, M. R. U. D. (2021). The Implementation of Advance Pricing Agreement in Indonesia Following The Adoption of Dispute Resolution Guideline. BISNIS & BIROKRASI: Jurnal Ilmu Administrasi Dan Organisasi, 27(2), 9. https://doi.org/10.20476/jbb.v27i2.11756
pajak.go.id. (2023). Country-by-Country Report | Directorate General of Taxes. Pajak.Go.Id. https://pajak.go.id/index.php/id/eoi/cbcr
Director General of Taxes Regulation Number Per-6/PJ/2026 Concerning Procedures for Exercising Rights and Fulfilling Obligations Regarding the Global Minimum Tax Based on International Agreements, Pub. L. 6 (2026).
Minister of Finance Regulation Number 22/PMK.03/2020 of 2020 Concerning Procedures for the Implementation of Advance Pricing Agreements, Pub. L. 22 (2020).
Minister of Finance Regulation Number 49/PMK.03/2019 of 2019 Concerning Procedures for Implementing Mutual Agreement Procedure, Pub. L. 49 (2019).
Minister of Finance Regulation Number 136 of 2024 Concerning the Imposition of Global Minimum Tax Based on International Agreements, Pub. L. 136 (2024).
Minister of Finance Regulation Number 172 of 2023 Concerning the Application of the Arm’s Length Principle in Transactions Affected by Special Relationships, Pub. L. 172 (2023).
Minister of Finance Regulation Number 213/PMK.03/2016 of 2016 Concerning Types of Documents and/or Additional Information Required to Be Maintained by Taxpayers Conducting Transactions with Related Parties, and Procedures for the Management Thereof, Pub. L. 213 (2013).
Government Regulation (PP) Number 20 of 2026 Concerning Amendments to Government Regulation Number 55 of 2022 Concerning the Adjustment of Regulations in the Field of Income Tax., Pub. L. 20 (2026).
Government Regulation (PP) Number 45 of 2019 Concerning Amendments to Government Regulation Number 94 of 2010 Concerning Calculation of Taxable Income and Payment of Income Tax in the Current Year, Pub. L. 45 (2019).
Saragi, D. E. H. (2024). Development of Transfer Pricing Regulations in Indonesia. Jurnal Ilmu Ekonomi Dan Pembangunan, 24(2). https://doi.org/10.20961/jiep.v24i2.90934
Serafin, M. I. O., & Tjaraka, H. (2024). Transfer Pricing Practices in Multinational Companies: A Phenomenological Approach. Jurnal Akuntansi Manado (JAIM). https://doi.org/10.53682/jaim.vi.8732
Soekanto, S., & Mamudji, S. (2001). Normative Legal Research (A Brief Overview). Rajawali Pers.
Tarigan, T. F. (2022). Advance Pricing Agreement between Multinational Companies and the Government of Indonesia in the perspective of Indonesian Tax Law. SALAM: Jurnal Sosial Dan Budaya Syar-i, 9(2), 535–548. https://doi.org/10.15408/SJSBS.V9I2.25124
Team Tax. (2024). New and Streamlined Transfer Pricing (“TP”) Rules. PWC Tax Indonesia, (4). https://www.pwc.com/id/en/taxflash/assets/english/2024/taxflash-2024-04.pdf
Law Number 6 of 1983 Concerning General Provisions and Tax Procedures (KUP), as Amended Several Times, Most Recently by Law Number 7 of 2021 Concerning the Harmonization of Tax Regulations., Pub. L. 6 (1983).
Law Number 7 of 1983 Concerning Income Tax (PPh) as Amended Several Times, Most Recently through Law Number 7 of 2021 Concerning Harmonization of Tax Regulations., Pub. L. 7 (1983).
Law Number 7 of 2021 Concerning the Harmonization of Tax Regulations (HPP Law), Pub. L. 7 (2021).
Law Number 8 of 1983 Concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, as Amended Several Times, Most Recently by Law Number 7 of 2021 Concerning the Harmonization of Tax Regulations., Pub. L. 8 (1983).
Yang, L. (2023). Country-by-country reporting and corporate tax avoidance: evidence from China. Economic Research-Ekonomska Istraživanja, 36(1), 3087–3104. https://doi.org/10.1080/1331677X.2022.2106283
Yanuar, Muh. A. (2023). Optimizing the implementation of the Automatic Exchange of Information (AEoI) to boost state revenue from income tax collections. Scientax: Jurnal Kajian Ilmiah Perpajakan Indonesia, 4(2), 219–232. https://doi.org/10.52869/ST.V4I2.320
Published
2026-10-28
How to Cite
Aji, S. B., Saputro, G. E., & Suwito, S. (2026). Analysis of the Directorate General of Taxes’ Measures to Safeguard Taxation on Cross-Border Transactions and Prevent Tax Evasion via Transfer Pricing. International Journal of Technology and Education Research, 4(04), 206-231. https://doi.org/10.63922/ijeter.v4i04.6483
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