Indonesia vs SK Group Indonesia, October 2014, Tax Court, Put.56237/2014

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At issue in the case of SK Group Indonesia was sale of lube base oil to SK Energy International (Singapore). The transfer price had been determined by the group using the Transactional Net Margin Method (TNMM).

An adjustment was issued by tax authorities claiming that the controlled transactions had been underpriced. This was concluded based on the comparable Uncontrolled Price method (CUP).

Judgement of the Tax Court

The Court decided in favour of SK Group.

According to the court the tax authorities had not been able to sufficiently prove that the CUP method was a more appropriate method.

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