PT PMA Transfer Pricing: When Are Master and Local Files Required?

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Why this matters for a PT PMA

A foreign-owned Indonesian company with related-party transactions needs to distinguish its pricing responsibilities from the requirement to prepare particular documentation files. PMK 172/2023 is an existing regulation dated 29 December 2023, not a new rule introduced in October 2026.

This practical review explains the distinction. It does not announce a new transfer pricing rule or a Bali-specific audit campaign.

The distinction PT PMA owners need to make

PMK 172/2023 requires the arm's length principle for transactions influenced by a special relationship. The separate obligation to maintain master and local files depends on qualifying conditions; foreign ownership alone does not make every PT PMA subject to those files.

Article 16(3) covers taxpayers with related-party transactions where the preceding tax year's gross turnover exceeds Rp50 billion; or affiliated tangible-goods transactions exceed Rp20 billion; or each category of affiliated services, interest, intangible-property use or other affiliated transactions exceeds Rp5 billion. Transactions with an affiliate in a jurisdiction whose income-tax rate is lower than Indonesia's also trigger the requirement.

Under Article 18, required master and local files must be available no later than four months after the tax year ends. Country-by-country reporting has separate eligibility rules. Falling below master/local thresholds does not remove the arm's length obligation.

What to review in a Bali business

Start with a list of payments and receipts involving owners, parent companies and other potentially related entities. Ask your tax adviser to identify which relationships and transactions fall within the regulation.

A management fee, brand royalty or intercompany loan deserves its own evidence review. As a practical preparation step, assemble the agreement, invoices, payment trail and records explaining what was delivered and why the amount was charged. A bank transfer establishes that money moved; it does not explain the underlying service or pricing rationale.

For example, a Bali hospitality company receiving monthly support from a group office overseas can prepare a work log showing who provided the support, the outputs received and how the charge was calculated. This is an illustrative records exercise, not a conclusion that every such payment automatically requires a master file.

A practical review sequence

Map the related parties and transaction types for the relevant tax year.

Reconcile the prior-year turnover and transaction values used for the documentation assessment.

Review counterparty jurisdictions as well as financial thresholds.

Match intercompany charges to contracts and evidence of actual activity.

Record the adviser's conclusion, required files, responsible person and preparation date.

Bali Zero take

The useful question is whether the company's actual transactions and documentation match. Avoid both blanket assumptions: that all foreign-owned businesses must prepare the same package, or that a small company has no transfer pricing responsibilities.

Review the business facts before commissioning documents. Preparing the appropriate records helps establish the company's position; an audit or penalty should not be presented as inevitable.