Challenges and strategies to strengthen transfer pricing audits: An institutional logics approach
DOI:
https://doi.org/10.54957/educoretax.v6i4.1843Keywords:
Globalization, Institutional logics, Multinational corporation, Transfer pricing, Transfer pricing auditAbstract
Globalization has increased the number of multinational companies in Indonesia, but transfer pricing practices are often used for profit shifting, which harms state revenue. The high number of losses experienced by the Directorate General of Taxes (DGT) in transfer pricing disputes indicates that audit quality needs improvement. This study is the first to apply the Institutional Logics approach, which includes symbolic carriers such as regulations and material carriers such as actors, routines, and supporting infrastructures, while also allowing for findings beyond this framework. The research uses a qualitative descriptive method through questionnaires distributed to tax auditors and interviews with various stakeholders, including the DGT, tax consultants, and the Tax Court. The results show several challenges, including ambiguous regulations and the need for more detailed technical guidelines, unequal auditor competence and limited training, restricted access to comparable databases, and an organizational culture that lacks consistent leadership support, policy continuity, and effective incentive systems. In addition, coordination among both internal and external stakeholders still needs to be improved in managing transfer pricing cases. Therefore, it is necessary to refine regulations and technical guidelines, strengthen auditor competence through tiered training and mentoring, enhance supporting facilities such as access to comparable databases and international cooperation, reinforce leadership roles and incentive systems, and establish effective coordination mechanisms from the initial examination stage to dispute resolution.
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