Indonesia’s transfer pricing rules under Income Tax Law No. 7 of 2021 and PMK-172/2023 are being used to ensure multinational enterprises contribute fairly to national revenue amid a fragmented global economy that complicates supply chains and the search for reliable arm’s-length comparables.

Domestically, the country is reconciling the Tax Harmonization Law with existing procedures while preparing for the Tax Court’s full transfer to Supreme Court control in 2027, a move intended to strengthen judicial independence though it carries risks of non-specialized judges intervening in factual matters.

The reforms aim to build a more transparent and predictable tax environment that supports legitimate business while advancing national economic resilience, rather than deterring foreign investment.

In the times of a fragmented global economy, businesses worldwide face considerable challenges, particularly due to a nation-state’s changing diverse economic and legal rules that increase compliance costs, create potential sanctions risks, and affect supply chain considerations. Indonesia is no exception. Its transfer pricing industry, a vital pillar of international taxation, regulated primarily under Income Tax Law No. 7 of 2021 and Minister of Finance Regulation PMK-172/2023, sits at the intersection of two simultaneous storms: one driven by the transformation of the fractured global economy, the........

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