Page 10 - Working Paper (Measuring BEPS and Its Countermeasures in Indonesia: A Preliminary Research Guide)
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DDTC Working Paper 1717

                              Foreign Direct Investment   FDI statistics cover all cross-border stocks and flows between enterprises
                              (FDI)                 forming part of the same group, including (i) direct investment (equity or
                                                    debt) positions; (ii) direct investment financial flows (equity, reinvestment
                                                    of earnings, debt); and (iii) direct  investment  income flows (dividends,
                                                    distributed branch profits, interest). The IMF only reports on FDI positions,
                                                    not flows, and the amount of information available from individual countries
                                                    differ. The OECD has statistics on FDI positions, income and flows, but there
                                                    are currently gaps and inconsistencies.

                              Trade data            Aggregate data on bilateral trade by product can be used to analyze profit
                        Macro Data  Corporate  income  tax  Aggregate tax revenue data is collected by Ministry of Finance, especially
                                                    shifting through mispricing.

                              (CIT) revenue
                                                    the Directorate General of  Taxes (DGT).  This  could be of  good  source in
                                                    estimating the aggregate revenue loss representing the magnitude of BEPS
                                                    activities. It is usually used to represent the tax base existed in a country or

                                                    The  main challenge of  using this data is to differentiate revenue losses
                                                    caused by BEPS from real economic and business decisions. In addition, the
                                                    lack of detail and consistency is an important issue for developing countries
                                                    and, because BEPS involves cross-border transaction  with all countries,
                                                    comparable data for both developed and developing countries, is essential.

                              Customs (trade) data  Customs data is a useful force for understanding the mispricing of traded
                                                    goods and services. This is an important component for understanding
                        Micro Data                  transfer pricing behavior by related parties. As noted in the macro-section,
                                                    the service component of trade flows (which includes royalties and other
                                                    payments for the use of IP) is likely to be underestimated due to the
                                                    underreporting and mispricing of IP.

                              Company financial     This information can be sourced from published financial statements of
                              information from public/  MNEs, open-access sources such as OpenCorporates, and commercial
                              proprietary databases  databases (e.g. Bureau Van Dijk (Bvd) ORBIS and Amadeus, S&P
                                                    Compustat Global Vantage, Bloomberg, Oriana, Osiris, OneSource,
                                                    Mergent,, SPARK,, Ruslana). Companies (at
                                                    least public companies) are typically obliged to publsh financial statements
                                                    (consolidated and/or unconsolidated).

                                                    Problem with the suitability of this data for BEPS analyses include: different
                                                    reporting requirements for accounting and tax purposes, no distinction
                                                    between related party and independent party transactions, coverage that is
                                                    far from comprehensive, and the heterogeneity of reporting across countries
                                                    and companies. Databases that consolidate companies’ balance sheet and
                                                    income account data are improving their coverage over time, but still have
                                                    weak coverage of developing countries, especially Indonesia.

                              Company financial     This information could be of insightful information to measure tax-
                              information from      motivated profit shifting, but access to such data is usually restricted in
                              government databases  certain government institution and needs long bureaucracy process to
                                                    obtain such data.
                              Tax return CIT information  A range of financial and tax information is available to tax authorities as
                                                    companies are required to file a tax return. The DGT do not report corporate
                                                    tax revenues separately for MNEs and purely domestic companies from tax
                                                    returns, and have no systematic data regarding intra-group transactions.

                                                    Full access to the detailed micro-level company tax data is generally
                                                    restricted to DGT.

                              Tax audit information  Information from audits of tax returns filings, both assessments and
                                                    settlements, has been cited as a potential source of information about
                                                    BEPS. However, they are not available for tax policy analysis, even on an
                                                    aggregated basis.
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