Price setting on intra group trading by multinational
manufacturing companies, which leads to market value underpricing or
overpricing, causes transfer pricing disputes in Indonesia. This is reflected
in Indonesian tax court cases. Based on the cases, almost all products
manufactured by Indonesian contract manufacturer were sold to affiliates. This
article discusses transfer pricing cases on intra group trading by
multinational enterprises (MNEs) in Indonesia according to tax court decisions
during 2015–2019 fiscal years. The cases covered in the Tax Court
Decisions were submitted by taxpayers and include cases that were accepted and
rejected by the board of judges. Research shows that common disputes are mainly
triggered by determination of fair calculation on Cost of Goods Sold (COGS) items,
miscalculation of COGS, different comparable data used to assess the
application of the fair market price and mistake in recording
the volume of goods traded. This phenomenon requires
proper attention from the tax authority.