Indonesia Weighs Adoption of Amount B for Transfer Pricing

JAKARTA, December 3, 2025 – The Indonesian government is reviewing the possible adoption of Amount B Pillar 1, a rule agreed under the Inclusive Framework. International Tax Director of the Directorate General of Taxes, Mekar Satria Utama, announced this at an International Fiscal Association (IFA) Indonesia seminar.

Amount B is a simplified and streamlined approach created by the OECD to ease the application of the arm’s‑length principle (ALP) for affiliate transactions involving marketing and distribution activities. Mekar noted that adoption could lower transfer‑pricing disputes, reduce administrative burdens for taxpayers and the tax authority, and increase investor certainty, while challenges remain in aligning the pricing matrix with domestic market conditions and ensuring staff readiness.

As a low‑ and middle‑income jurisdiction, Indonesia is eligible to simplify its transfer‑pricing rules through Amount B. The government respects jurisdictions that have already applied Amount B and aims to avoid double taxation via the mutual agreement procedure (MAP), with the final decision still under consideration.