Page 9 - Working Paper (Multinational Firms Losses and Profit Shifting Behavior in Indonesia: Some Comments)
P. 9

DDTC Working Paper 1215

                   loss  via  profit  shifting  strategy.  Therefore,  DGT’s   any case, Indonesia is should continuously monitor
                   auditor should have sound business understanding   and ensure their  involvement at the global  level.
                   of their taxpayers.                              The  OECD/G-20  BEPS  project  is  likely  to  be  the
                                                                    fundamental source of design of international tax
                      Although that  difference in tax  rate among   system in the future. Particularly, for transfer pricing
                   countries  is  inducing  profit  shifting  behavior  of   and thin capitalization rule, the BEPS Actions are
                   multinational  enterprise,  the policy on reducing   relevant to the tax situation in Indonesia.
                   corporate  tax  rate  with  regards  to  profit  shifting
                   may not be so relevant for today’s Indonesia agenda.   The last broad point I would like to make is that
                   In  general,  it  would  be  better to align  current   Indonesia should improve their tax administration
                   anti-avoidance rules as applied in Indonesia with   system. Even good  anti-avoidance  rule will  not
                   the international  practice. As episodes  of  major   work if there is a lack of expertise, limited access to
                   international  tax  reforms are always driven by   the database, or no willingness to understand the
                   multilateral organizations (particularly OECD), in   business behavior.

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