Types of APA

• Unilateral APA (UAPA): UAPA according to Article 1 number 26 PMK-172/2023 is a binding agreement between an Indonesian Taxpayer and the DGT for domestic and/or cross-border transactions. While this agreement confirms the tax treatment in Indonesia, it does not determine how transfer pricing issues will be resolved in other jurisdictions involved. Therefore, it generally does not eliminate the risk of double taxation for cross-border transactions.
• Bilateral APA (BAPA): In cases of cross-border transfer pricing issues where a Double Taxation Agreement (DTA) exists between Indonesia and the other related jurisdiction, the Taxpayer may request a Bilateral APA according to Article 1 number 27 of PMK-172/2023. This agreement involves the DGT, the Taxpayer, the competent authority of the tax treaty partner, and the overseas affiliated party aiming to resolve transfer pricing issues consistently across both jurisdictions.
• Multilateral APA (MAPA): Is type of APA that involves multiple jurisdictions and suitable for complex cross-border transactions involving several countries and aims to resolve transfer pricing issues consistently across all participating jurisdictions.

The choice between Unilateral APA, Bilateral APA, and Multilateral APA depends on the Taxpayer's preference taking into account the availability of the APA program in the treaty partner's domestic legislation.