Indonesia Transfer Pricing Documentation Requirements 2026: What Actually Has to Be in the File

A tax audit notice arrives. The DGT requests transfer pricing documentation within one month. The finance team scrambles, pulls together intercompany agreements, runs a benchmarking study from three years ago, and assembles something that looks like a Master File. It gets submitted. Weeks later, the company receives a corrective assessment anyway, not because the pricing was wrong, but because the documentation itself failed to meet the formal and material standards the regulation actually requires.

This happens more often than most finance directors expect, and it happens for a specific reason. Companies tend to treat transfer pricing documentation as a single deliverable, something to produce once a request lands. In reality, Indonesia’s framework under Minister of Finance Regulation No. 172 of 2023 (PMK-172/2023) defines a three-tiered structure, each tier with its own content requirements, its own deadline, and its own role in how the Directorate General of Taxes or DGT (Direktorat Jenderal Pajak or DJP) evaluates whether intercompany transactions reflect the arm’s length principle.

What follows is a breakdown of what each tier actually needs to contain in 2026, how the recently issued Regulation of the Director General of Taxes No. PER-11/PJ/2025 (PER-11/2025) changes the annual filing mechanism through Coretax, and which transaction categories now require a level of analysis that many companies are still not preparing for.

The Three-Tier Structure: What Goes Where

PMK-172/2023 consolidates what used to be governed under separate regulations into a single framework aligned with the OECD’s BEPS Action 13 standards. The structure itself is not new conceptually, Indonesia adopted the three-tiered approach back in 2016, but PMK-172/2023 refines the content requirements, the parent entity definitions, and the procedural mechanics around each tier.

The Master File

The Master File provides a high-level overview of the multinational group’s global business operations, its overall transfer pricing policies, and the global allocation of income and economic activity. For an Indonesian subsidiary, this document is typically prepared at the group level and localized for submission, but it cannot simply be a generic global template.

A Master File that will hold up under DGT review needs to include:

• The group’s organizational structure, including a chart showing legal ownership and geographic location of operating entities
• A general description of the group’s business, including key drivers of profit, supply chains for the group’s material products and services, and main geographic markets
• The group’s intangibles, including its overall strategy for development, ownership, and exploitation of intangible assets
• A description of the group’s intercompany financial activities, including financing arrangements with unrelated lenders
• The group’s financial and tax positions, including consolidated financial statements and a list of existing unilateral advance pricing agreements

The Local File

Where the Master File describes the group, the Local File is where the actual defense of the Indonesian entity’s specific transactions lives. This is the document that carries the most weight during an audit, because it is where the arm’s length analysis for each material intercompany transaction is documented and justified.

A compliant Local File addresses:

• A detailed description of the local entity’s management structure, organizational chart, and individuals to whom local management reports
• A description of the local entity’s business strategy, including any restructuring or intangible transfers that affected the entity in the current or prior year
• Details of each material category of related party transaction, including amounts of intercompany payments and receipts
• A comparability analysis, including the selection and application of the most appropriate transfer pricing method, and the identification of comparable companies or transactions
• Financial information, including annual financial accounts and how the financial data used in the transfer pricing analysis ties to those accounts

Country-by-Country Reporting (CbCR)

CbCR sits at a different level entirely. Rather than focusing on a single entity’s transactions, it provides the DGT with an aggregate picture of where the multinational group’s revenue, profit, tax paid, employees, and tangible assets are located across every jurisdiction in which it operates.

Under PMK-172/2023, the obligation to prepare CbCR applies to taxpayers acting as the parent entity of a business group with consolidated gross revenue of at least IDR 11 trillion (broadly equivalent to EUR 750 million) in the fiscal year preceding the reporting year. This is a meaningful shift from the prior regulation, which assessed the threshold based on the same fiscal year being reported, creating a timing mismatch that PMK-172/2023 has resolved.

For Indonesian subsidiaries of foreign groups that exceed this threshold, the obligation does not automatically fall on the Indonesian entity. CbCR is generally filed by the ultimate parent entity in its home jurisdiction, and shared with Indonesia through automatic exchange of information agreements. However, the Indonesian subsidiary still carries a notification obligation, informing the DGT of which entity will file the CbCR and where, within twelve months of the end of the fiscal year. If Indonesia does not have an automatic exchange arrangement with the parent’s jurisdiction, or if that jurisdiction does not require CbCR filing at all, the obligation can shift to the Indonesian entity directly.

The PER-11/2025 Change: How Filing Now Works Through Coretax

This is where 2026 compliance differs meaningfully from prior years, and where many companies that have been compliant under the old process need to adjust.

Under PER-11/PJ/2025, taxpayers are no longer required to attach the full Master File and Local File documents to the annual corporate income tax return (SPT Tahunan PPh Badan). Instead, the regulation requires submission of an Ikhtisar, a summary or overview of the Master File and Local File, through Attachment 10D (Lampiran 10D) of the annual return, filed through the Coretax system.

This is a procedural simplification on its face, but it carries a substantive implication. The Ikhtisar in Lampiran 10D is the DGT’s first window into a taxpayer’s transfer pricing position for the year. An Ikhtisar that is incomplete, inconsistent with the underlying full documentation, or that flags transaction categories without adequate explanation, can itself become the trigger for a documentation request or audit selection. Companies that treat the Lampiran 10D submission as a formality, populated quickly without reference to the underlying analysis, are effectively creating their own audit risk signal.

The full Master File and Local File documents themselves remain the taxpayer’s responsibility to prepare and retain. PMK-172/2023 maintains the same availability deadlines as the prior regulation: Master File and Local File must be available no later than four months after the end of the tax year, while CbCR-related documentation follows the twelve-month notification timeline described above.

Critically, Article 34(2) of PMK-172/2023 introduced a provision not present in the prior framework. If the DGT requests the full Transfer Pricing Documentation as part of a supervision or audit process, the taxpayer must submit it within one month of that request. There is no extension built into this timeline as a matter of course. A company that has only a partial or outdated Local File on hand when that request arrives has, in practical terms, a month to either complete a document that should already exist, or submit something incomplete and accept the consequences.

Explore Our Services Tax Compliance in Indonesia →

The Six Mandatory Preliminary Analysis Categories

One of the more consequential additions under PMK-172/2023, effective from tax year 2024 and continuing to apply through 2026, is the introduction of mandatory preliminary analysis requirements for six specific categories of related party transactions. Regardless of whether a taxpayer otherwise meets the general thresholds for full TP Doc preparation, transactions falling into these categories require documented preliminary analysis as a matter of course:

• Tangible goods transactions, including the sale and purchase of inventory, raw materials, and finished products between related parties
• Intangible asset transactions, covering royalties, licensing arrangements, and transfers of intellectual property
• Intra-group services, including management fees, technical assistance, and shared service arrangements
• Interest on loans and other financial instruments, covering intercompany financing arrangements of all forms
• Business restructuring transactions, including transfers of functions, assets, or risks between related parties
• Other transactions affected by special relationships that fall outside the preceding categories but still involve related party pricing

The practical effect of this provision is that a company cannot simply conclude it falls below the general revenue or transaction value thresholds and therefore has no transfer pricing documentation obligation at all. If any of these six categories of transaction occur with a related party, a preliminary analysis demonstrating that the pricing reflects arm’s length conditions needs to exist, even if a full Master File and Local File are not otherwise required.

For companies with even modest cross-border intercompany activity, such as a regional headquarters charging a management fee to its Indonesian subsidiary, or an Indonesian entity receiving an intercompany loan from its parent, this means the preliminary analysis obligation applies far more broadly than the headline thresholds suggest.

Language, Form, and the Burden of Proof

A detail that trips up foreign-owned companies more often than the substantive content requirements is the language and form in which documentation must be presented. Transfer pricing documentation submitted to the DGT must be prepared in Bahasa Indonesia. Where a group’s Master File or supporting analysis exists only in English, as is typical for multinational groups managing TP documentation centrally, an Indonesian summary or translation is required, and the use of a foreign language version requires separate approval.

This is not a minor administrative point. During an audit, the DGT’s evaluation of whether documentation meets the “formal and material” standard, the standard PMK-172/2023 uses to determine whether documentation can be relied upon to demonstrate that related party transactions are commercially rational and free of tax avoidance motive, includes an assessment of whether the documentation was prepared in the form and language the regulation requires, at the time the regulation requires it.

The burden of proof in Indonesian transfer pricing matters rests with the taxpayer. If documentation is found to be unavailable, incomplete, or lacking adequate supporting evidence, the DGT is entitled to recalculate taxable income based on its own assessment of arm’s length pricing. The financial consequence of that recalculation, an increase in taxable income that was not voluntarily reported, carries administrative penalties that can range from 50% to 100% of the underpaid tax, in addition to interest calculated on the outstanding amount from the original due date.

Where This Intersects With Other Compliance Obligations

Transfer pricing documentation does not exist in isolation from the rest of a foreign-owned company’s tax position, and treating it as a standalone annual exercise misses how interconnected these obligations have become.

Intercompany dividend distributions, for instance, sit at the intersection of transfer pricing and withholding tax compliance. A foreign shareholder claiming a reduced treaty rate on dividends under the framework discussed in XPND’s analysis of Indonesia’s dividend withholding tax compliance requirements may find that the DGT’s review of that claim also touches on whether the broader intercompany relationship, including any management fees, royalties, or financing arrangements with the same related party, is consistently priced and documented. Inconsistency between a company’s transfer pricing position and its withholding tax filings is one of the patterns that draws DGT attention during the Coretax-enabled cross-referencing that has become standard since 2025.

Similarly, the question of whether a foreign company has inadvertently created a Permanent Establishment in Indonesia, covered in XPND’s review of Permanent Establishment risk under PMK 112/2025, has direct transfer pricing implications. If activities conducted in Indonesia are found to constitute a PE, the profit attribution to that PE follows the same arm’s length principles, and the documentation burden that applies to a formally incorporated subsidiary extends to the PE as well.

For companies that have not yet undergone a formal review of whether their transfer pricing position would survive a DGT documentation request, this is also closely related to the broader question of audit exposure. XPND’s guide to audit requirements for foreign companies in Indonesia covers what triggers a formal audit and how the documentation reviewed during a transfer pricing inquiry fits into that broader process.

Building the Documentation Before the Request Arrives

The structural problem with transfer pricing documentation is that its cost is almost entirely backloaded if a company waits for a request to trigger preparation. A Local File built under audit pressure, with a one-month deadline and a comparability analysis assembled from whatever data happens to be available, is a fundamentally weaker document than one prepared as part of the annual compliance cycle, reviewed, and kept current as intercompany arrangements evolve.

The practical sequence that holds up best under DGT scrutiny looks like this. The Lampiran 10D Ikhtisar filed through Coretax each year should be a genuine summary of documentation that already exists in full form, not a placeholder completed ahead of documentation that gets built later. The six mandatory preliminary analysis categories should be reviewed annually regardless of whether the company crosses the general thresholds, since a single new intercompany service agreement or loan can bring a category into scope that was not relevant the previous year. And the comparability analysis underlying the Local File should be refreshed on a cycle that reflects how frequently the company’s intercompany pricing actually changes, not left static for years at a time.

XPND’s tax compliance team works with foreign-owned companies on exactly this kind of annual documentation cycle, ensuring that the Master File, Local File, and any required preliminary analyses are prepared, reviewed, and ready well before a Coretax filing deadline or a DGT request makes them urgent. For companies whose intercompany structure has grown more complex, whether through new financing arrangements, additional service agreements, or a restructuring within the group, a structured review of the current transfer pricing position is often the starting point for understanding where the documentation gaps actually are before they surface during an audit.

If your company has related party transactions crossing into Indonesia and your current transfer pricing documentation has not been reviewed against the PMK-172/2023 and PER-11/2025 requirements specifically, speak with the XPND team about where your documentation stands today. The gap between having documentation and having documentation that meets the formal and material standard the DGT applies is often smaller to close than companies expect, provided it is addressed before the one-month clock starts running.