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Notification on Interest Measurement to Related Party

22-08-2018 / By Administrator / Taxation

To properly apply for the operation of a related party,

In accordance with notification No. 11946 which dated on 21 August 2018 recommended as it is:

     For an enterprise that operates a loan in a case involves borrowing money, it is determined by the Arm's Length Principle.

A word "Arm's Length Principle" refers to the principle of determining the cost of operations that has the same or similar conditions,

which are held among independent enterprises in order to compare any transaction costs made among related party.

     The enterprise is not required to summit loan documents to tax administration for approval, but the taxpayer must keep the

Documents related to the loan and be provided as requirement from tax administration.  According to notification above, apply only

To the operation of related party.

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