Pricing Transfer and International Taxation

Transfer prices may be based on the cost of the difference of the increase or a price. Environmental influences over prices caused to transfer some questions about the methodology of the determination of the price. The principle or price antarperusahaan beseem transfer transactions with supposes that happen antarpihak unrelated instimewa in a competitive market.

Early concept
Complexity legal and rules specifying taxes to foreign companies and profit generated abroad in fact taken from some basic concepts. This concept includes instilah neutrality tax and equity tax. Neutrality tax means that have no influence ( neuter ) of the decision allocation of resources. In other words decision business propelled by fundamental economic seoperti level of rewards and not tax consideration. Equity tax mean wajub tax face a situation similar should pay taxes the same , but there are disapproval antarbagaimana interpret this concept. 

Transfer pricing in the practice of taxation of international

In principle practice transfer pricing ( with prices not equal to the market price ) can be driven by tax motive or instead of taxation ( non-tax motive ). Various studies beyond indonesia show it ( carson 1979 , ; vaitson ; 1974 in caves ; 1996 ). Motivation taxes on practices transfer pricing executed with wherever possible move income to a country for to the tax lowest or minimum. One form transferee income e.g. in shape payment royalty because with great scarcity of standard price ( of tariff ) market over royalty very hard for administration tax about it. Kopits ( in caves ; 1996 ) declaring that least 13 % payment royalty from state bcrkcmhang ( to the developed world ) a transformation royalty be dividends. Next , with respect to goods price ( of ) the input of production lecras ( in caves ; 1996 ) declaring that based on the study 1985 multinationals operating in. More easily level autonomy members multinationals at overseas the higher utilization strategy transfer pricing. Becomes less menentu-nya environment operation member of the company the more significant portion export sales than domestic sales and higher earnings potential then motivation taxes on transfer pricing more extensive. Transfer pricing problem is too regardless of phenomena business big companies in multi unit will expand business abroad at mengoprasikan their business in decentralization and implement concept cpst-reveneu or concept corporate profit center. Ideally , concept decentralized profit center was also device that could measuring and evaluate performance of which also one aims management and motivation management units multinationals concerned in achieving the purposes of the company. 

Purpose of transfer pricing
In general , purpose quotations transfer is to transmits data financial among departments or divisi-diisi company and as they were mutually uses goods and services each other ( henry simamora , 1999 : 273 ) besides the purpose ; transfer pricing sometimes used for evaluate division and motivate manager division division the seller and buyer toward decisions harmounious with purpose company as a whole. Transfer a pricing system should satisfy three objectives : acurate performance evaluation , goal congruence , and preservation of divisional autonomy ( joshua ronen and george mckinney , 1970 : 100-101 ). While in scope multinational corporations , transfer pricing used for , minimizing taxes and duties which they secrete world-wide transfer pricing can effect overalls corporate incame taxes. Particulary .this is true for multinational corporations ( hansen and mowen , 1996 : 496 ).

Transfer to a methodology the determination of the priceTransfer prices may be based on the cost of the difference of the increase or a price. Environmental influences over prices caused to transfer some questions about the methodology of the determination of the price. The principle or price antarperusahaan beseem transfer transactions with supposes that happen antarpihak unrelated instimewa in a competitive market .
According to the law on income tax as. guiler methods by :
1. A method of uncontrolled price equivalent
This method of transfer of price based on determined with reference to the price used in a transaction equivalent between company that independent or equivalents of the company to a third party are not related 

2 .A method of transactions uncontrolled equivalent
This method applied to transfer assets intangible. This method acknowledges royalty reference level with reference to uncontrolled transaction in which an intangible asset of the same or similar diverted. As a method of uncontrolled price equivalent , this method relies on comparative market .
3. A method of selling price back
This method of calculating transaction prices beginning with a reasonable price charged on the sale of goods meant to the purchaser who independent. Margins that is adequate to close the burden and profit nomal then subtracted from the price is to acquire the price inter-university transfer of the company.

4. A method of determining the cost plus
This method useful when goods spring so diverted antarperusahaan foreign affiliates or if an entity is wro contractors to the other companies .
5. A method of comparable profit
This method supporting a general view stating that taxpayers have a situation similar should get all similar in return for a certain period of time .
6. A method of disseverance profit
This method used in case of reference market the product or not available. This method includes the division profit produced through with the privileged related transactions between affiliated company which is based on a reasonable manner.

7. Method determination price other
This method can be used if prices produce size reasonable more accurate .