UGM Transfer Pticing

7/30/2019 UGM Transfer Pticing

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Company PROGRAM PENDIDIKAN

LOGO PROFESI AKUNTANSI

INTERNATIONALNTERNATIONALTRANSFER PRICINGRANSFER PRICING

MUHAMAD MUFTI ARKAN


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AKUNTANSI MANAJEMEN


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InternationalInternationalssues nssues n


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PT ADARO ENERGY

1 MNCNC2 EXPORT-IMPORXPORT-IMPOR3 FREE TRADE ZONEREE TRADE ZONE

4 FOREIGN CURRENCYOREIGN CURRENCY5 TRANSFER PRICINGRANSFER PRICING


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Business looks to themana ement accountant

for international financialand business ex ertise.


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Management Accounting in the

International Environment

Skills needed by managementaccountants

9 PoliticsEconomics

9 Marketing

9 Information SystemsTechnolog


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Multinational Corporation (MNC)

Amultinational

corporation (MNC)is one that does

business in more

than one country insuc a vo ume aits well-being and

than one country.


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Im ortin and Ex ortinIm ortin and Ex ortin

Importing is the processof brin in roduct in

from a foreign country.

xpor ng s e process

of shipping product to a

ore gn coun ry.


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Forei n Trade ZonesForei n Trade Zones

Foreign trade zones

customs port of entry

U.S. soil but

outside U.S.Example:Example:

.


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Exam le of the Advanta es of O eratina Plant in a Foreign Trade Zone

Roadrunner, Inc. operates

foreign trade zone., .

an identical plant just

zone. Both plants,

crude oil from Venezuela.


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Example (continued)

Roadrunner Wilycoyote

Duty paid at purchase $ 0 $24,000

Carrying costs of duty 0 1,920

Duty paid at sale 16,800 0

Wilycoyote paysWilycoyote paysduty at the point ofduty at the point ofpurchase (6% ofpurchase (6% ofTotal dutyTotal duty--relatedrelated

, ., .

carryng cos s .carryng cos s .x 8/12 x $24,000)x 8/12 x $24,000)Roadrunner pays duty atRoadrunner pays duty atpoint of sale because it is inpoint of sale because it is ina foreign trade zone.a foreign trade zone.


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Example (continued)

Roadrunner Wilycoyote

Duty paid at purchase $ 0 $24,000

Carrying costs of duty 0 1,920

Duty paid at sale 16,800 0

Total duty and duty-, ,

Clearly theClearly thea van age approaca van age approac


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A com an ma choose topurchase an existing foreigncom an makin the urchased

e aws o e coun ry perm , anmultinational corporation can simply

company a wholly ownedsubsidiar .

se up a w o y owne su s ary orbranch office in the country.


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of partnership in which

-

enterprise. A specialcase of joint venturecooperation is the

maquiladoraamanu ac urng panlocated in Mexico which

materials and reexportsthem to the UnitedStates.


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A Transaction Risk ExampleA Transaction Risk Example

SuperTubs, Inc., a U.S. firm, sells its line of whirlpool tubs toBonbain, a French distributor. On J anuary 15, Bonbainorders 100 tubs at 1,000 per tub to be paid with French

francs on March 15. The exchange rate on on J anuary 15is seven francs per dollar or 700,000 francs. Suppose thaton March 15 the exchange rate is 7.1 francs per dollar. A$1,408 loss is experienced by SuperTubs, Inc.

Receivable in dollars on J an. 15 $100,000

Received in dollars on March 15

, . ,Exchange loss $ 1,408


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A Transaction Risk ExampleA Transaction Risk Example

If the franc had strengthened against the dollar to a. , ,

occur:

Receivable in dollars on J an. 15 $100,000

Received in dollars on March 15, . ,

Exchange gain $ 1,449


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against gains and

currency exchanges.


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Managing Economic RiskManaging Economic Risk

Economic risk is the impact of exchange

rate fluctuations on the present value of afirms future cash flows.

Example

A U.S. consumer can choose to purchase heavyequipment from either Caterpillar (U.S.) or Komatsu

. ,maker. At an exchange rate of $1 equals 130 yens, theprice is set. Assume the dollar strengthens so theexc ange ra e ecomes equas yens. s owers

Katmatsus price to $74,286.


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Mana in Translation RiskMana in Translation RiskExample

Multinational, Inc., has a foreign division, FD, which hasbeen experiencing eroding sales. Multinational directs FDmanagers o ncrease mar e ng expen ures over efollowing four quarters:

Quarter Expenditures in Local Currency

1 LC10 000

2 LC11,000

3 LC12,100

A 10%increase

each

4 LC13,310 quarter


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Mana in Translation RiskMana in Translation RiskExample (continued)

Suppose that the dollar has strengthened againstthe local currency and the quarterly exchangera es o or un s o oca currency are . , . ,1.35, and 1.50, respectively.

Quarter Expenditures in Local Currency

1 $10,000

2 9,1673 8,963

It looks like FDhas decreasedexpenditures.

,


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Advantages of Decentralization

in the MNC

The quality of information is better at the local level.

Local managers in the MNC are capable of a more

timely response in decision making. Social, legal, and language barriers are minimized.


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easurng er ormance n e u na ona rm

It is particularly difficultto com are theperformance of a

mana er of a division inone country with theerformance of a

manager of a division inanother countr .


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An example of misleading results:

Assets Revenues Net Income Margin Turnover ROI

Brazil 10 6 3 0.50 0.60 0.30

Canada 18 13 10 0.77 0.72 0.55

Spain 15 10 6 0.60 0.67 0.40

Analysis: On the basis of ROI, it appears that the manager of

,the Brazilian subsidiary did the worst job. However, theinflation rate in Brazil was 100% for the year. After adjusting

e asse ase or n a on, e wou e or eBrazilian manager.


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er ormance va ua on n e

conom c ac ors:

Organization of central banking system

Economic stability

x s ence o cap a mar e s

Currency restrictions

Adapted from Wagdy M. Abdal lah, Change the Envi ronment or Change the System,Management Account ing (October 1986): pp. 33-36.


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Quality, efficiency, and effectiveness of legal structure

Effect of defense policy

Im act of forei n olic

Level of political unrest



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Educational Factors:

Literacy rate

Extent and degree of formal education and training systems

Extent and quality of management development programs



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Sociological Factors:

Social attitude toward industry and business

Cultural attitude toward authority and persons insubordinate positions

Cultural attitude toward productivity and achievement(work ethic)

Social attitude toward material gain

Cultural and racial diversity

Adapted from Wagdy M. Abdal lah, Change the Envi ronment or Change the System,Management Accounting (October 1986): pp. 33-36.


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This approach identifies the minimumand maximum price that a selling

division would be willing to acceptand the maximum price that a buyingdivision would be willing to pay.


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The Transfer Pricing Illustration

produces small appliances.The Small Parts Divisionproduces parts used by the

Small Motors Division. Thepar s a so are so o o ermanufacturers and

.


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The Small Motors Division isoperating at 70 percent capacity.A request is received for

100,000 units of a certain model

this motor can be supplied by

the Small Parts Division. The

Small Parts Division onlyexperiencing a cost of $5 per

unit.


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Using the $8 transfer price,,

calculated as follows:

Direct materials $10

Transferred-in component 8rec a oVariable overhead 1

Total cost $31


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The Small Motors Division isoperating at 70 percent capacity, sothe $10 fixed cost is not relevant.

Recalculating the cost--

Direct materials $10

Transferred-in component 8Direct labo 2Variable overhead 1

The Small Motors Division can pay the Small Parts Division $8 perunit and still make a substantial contribution to the overall profitabilityof the Division.


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competitive markets for the,

price may no longer be suitable.


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,

prices may be a practicalalternative. O ortunit costscan be used to define the

boundaries of the negotiationset.


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Ne otiated Transfer Prices

1. A division manager who has private informationmay take advantage of another divisionalmanager.

2. Performance measures may be distorted by thenegotiated skills of managers.

. ego a on can consume cons era e me anresources.


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LOGO

INTERNATIONALNTERNATIONALTRANSFER PRICINGRANSFER PRICING


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Income Taxes andIncome Taxes and

Transfer PricingTransfer Pricing

Action Tax ImpactAction Tax Impact

Belgian subsidiary of parent 42% tax ratecompany produces a component 100 revenue $100 at a cost of $100 per unit.Title to cost = $0

the component is transferred to a Taxes paid = $0reinvoicing center in Puerto Ricoat a transfer price of $100 per unit.


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Income Taxes andIncome Taxes and

rans er r c ngrans er r c ng

Reinvoicing center in Puerto Rico, 0% tax rate

$100 transfers title of component to U.S. cost =$100

=transfer price of $200 per unit.

Action Tax ImpactAction Tax Impact

U.S. subsidiary sells a component 35% tax rateto external company at $200 each. $200 revenue

cost = $0

Taxes paid = $0


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methods that approximate -

in the order of preference):

Comparable uncontrolled price method

esa e pr ce me o Cost- lus method


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Penetapan Transfer Pricing pada MNCPenetapan Transfer Pricing pada MNC

Metode penetapan harga transfer yang mendekatiharga pasar yang diakui oleh Internal Revenues

.

Comparable uncontrolledprice method

Resale price method

Cost plus method


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Penetapan Transfer Pricing pada MNCPenetapan Transfer Pricing pada MNC

Menggunakan Market Price

uncontrolled price

method

Sales price received by

reseller less markuResale price method

mpy e cos asetransfer price

Cost plus method


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Pembahasan Problem 18-25Pembahasan Problem 18-25

1 Perusahaan memenuhi

penggunaan comparable

uncontrolled price methodkarena harga pasar di AS

e a u

Market Price $10

Add : Landing Cost 2.5

Less : Avoidable Commissions & Advertising 0.5Transfer Pricing $12


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1 Lanjutan

ditetapkan sebesar $11.70 lebih

rendah dari harga pasar di Amerika

yang telah disesuaikan ($12), makaIRS akan mempermasalahkan

persoalan tersebut karena kurang dariharga pasar yang disesuaikan.


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2 Penggunaan

Resale Price = Cost + 0,25 (Resale Price)

$8 = Cost + 0,25 ($8)Cost = $8-$2

Cost = $6

Transfer Pricing = $6 + Landing CostTransfer Pricing = $6 + 1.2

rans er r c ng = .


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2 Lanjutan

Perusahaan seharusnya

mentransfer dengan harga transferlebih t inggi dari $7.2, karena

apabila perusahaan tetapmentransfer dengan harga transfer

$4.5 maka hal ini akan

harga transfer yang ditetapkanlebih rendah dari harga yang

disesuaikan


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3 Minimum Price = $6 + $2 - $1.25

= $6.75

Maximum Price = $12

Transfer Pricing = $12 + Landing Cost - Avoidable marketing cost

= - .

Transfer Pricing = $12.75


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BEBERAPA CONTOH KASUS DI INDONESIABEBERAPA CONTOH KASUS DI INDONESIA

22 PT ADARO ENERGY

33


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100 120


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USA HK SG

100 200 300

400

PT ADARO ENERGY


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PT ADARO ENERGY

1 EXPOR BATU BARAXPOR BATU BARA2 ADARO COALTRADEDARO COALTRADE3 HARGA $ 32/TON >< $ 97/TONARGA $ 32/TON >< $ 97/TON

4 ROYALTY 13,5 % DAN PPHOYALTY 13,5 % DAN PPH5 OKTOBER 2007-AWAL 2008KTOBER 2007-AWAL 2008


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ASIAN AGRI GROUP

EKSPOR CPO

KERUGIAN NEGARA 1,3 TRILYUN

GAMBARAN UMUM PERPAJAKANGAMBARAN UMUM PERPAJAKAN


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GAMBARAN UMUM PERPAJAKANGAMBARAN UMUM PERPAJAKAN

Ps 18 UU no 17 tahun2000 (PPh)

Kepmenkeu 545/KMK.04/2000

TRANSFERTRANSFER

PRICINGPRICING

-

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Questions to Ask Concerning Ethics in


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Questions to Ask Concerning Ethics in

the International Environment

Is the action right legally?

Is the action right morally?

UGM Transfer Pticing

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