ANALYSIS OF TRANSFER PRICING AS A TAX AVOIDANCE AND PROPOSED SUGGESTION TO PREVENT ITS DISADVANTAGES
Abstract: It is very obvious
that businesses upholding the main economic principal “obtai ning maximum profit
by minimum capital/investment”. In this paper’s context, the words
“capital/investment”in that principal not only defined as a “pre company’s
wealth contribution” but also any company’s wealth which required for running
the businesses. Therefore, it is not impossible that undertakings always
developing in their own ways to increase their profit by avoiding taxes. Eventhough
the tax avoiding is not illegal, in some circumstances it disrupts the
goverment’s revenue. Using statutory and case approaches, this paper firstly
trying to determine the transfer pricing concept in regards to positive and
negative connotations. Secondly, the examination of transfer pricing
implementation by undertakings. Then lastly, this paper provides some proposals
to prevent the disadvantages of transfer pricing.
Author: Kukuh Leksono S.
Aditya
Journal Code: jphukumgg150045
