IMPLEMENTATION OF THE ARM'S LENGTH PRINCIPLE IN RELATED PARTY RELATIONSHIPS AT PT S INDONESIA

Authors

  • Rafida Nuraini Sekolah Vokasi, Universitas Sebelas Maret, Indonesia
  • Hanung Triatmoko Sekolah Vokasi, Universitas Sebelas Maret, Indonesia
  • Oscar Prasetyo Adhi Sekolah Vokasi, Universitas Sebelas Maret, Indonesia
  • Asaprima Putra Karunia Sekolah Vokasi, Universitas Sebelas Maret, Indonesia

DOI:

https://doi.org/10.29040/ijebar.v9i4.18125

Abstract

This study aims to analyze the implementation of Arm’s Length Principle by PT S Indonesia in affiliated transactions with SF Co., Ltd, a parent company from Japan. The focus of the study is to assess the suitability of determining fair prices with tax regulations in Indonesia. The research method used is descriptive qualitative through interviews with tax consultants who handle the company’s transfer pricing. The analysis is carried out based on Transfer Pricing documentation and applicable tax provisions. The results of the study indicate that the use of the Transaction Net Margin Method (TNMM) is in accordance with the business characteristics of PT S Indonesia. Testing using the Profit Level Indicator (PLI) with the Berry Ratio method shows that the company’s position is within the fair range, especially in the lower interquartile. In conclusion, PT S Indonesia has implemented tax obligations in accordance with the fairness principle without any indication of tax avoidance practices, although there are obstacles in finding comparable comparisons.

Downloads

Published

2025-12-31

How to Cite

Nuraini, R., Triatmoko, H., Adhi, O. P., & Karunia, A. P. (2025). IMPLEMENTATION OF THE ARM’S LENGTH PRINCIPLE IN RELATED PARTY RELATIONSHIPS AT PT S INDONESIA. International Journal of Economics, Business and Accounting Research (IJEBAR), 9(4). https://doi.org/10.29040/ijebar.v9i4.18125

Issue

Vol. 9 No. 4 (2025): IJEBAR, VOL. 09 ISSUE 04, DECEMBER 2025

Section

VOLUME 8 NOMOR 1 (2025)

Citation Check

License

Authors who publish with IJEBAR agree to the following terms: Authors retain copyright and grant the IJEBAR right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC BY-SA 4.0) that allows others to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material) the work for any purpose, even commercially with an acknowledgement of the work's authorship and initial publication in IJEBAR. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in IJEBAR. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).