Indonesia vs Cussons Indonesia, June 2017, Supreme Court, Nomor 907/B/PK/PJK/2017

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Category: Benchmark, Range and Median, Royalty and License Payments | Tag: , , , ,
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The tax authorities had disallowed royalty payments of 3% of net sales from Cussons Indonesia to its parent company in the UK, PZ Cussons International Ltd.

According to the tax authorities Cussons had been unable to prove that the transaction was at arm’s-length, as well as unable to provide transfer pricing documentation.

Cussons claimed that the royalty payments was supported with documents such as royalty agreement, VAT payment, and withholding tax on royalty. Cussons further argued that sales in Indonesia were positively influenced by Cusson’s trademark.

Following a tax court decision (Put.53966/2014) in favour of Cussons, the tax authorities brought an appeal to the Supreme Court.

Judgement of the Supreme Court

The Supreme Court dismissed the appeal of the tax authorities and upheld the decision in favour of Cussons.

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