Anatomy of the CbCR: Technical Guide for Filling Forms CBC-1, CBC-2, and CBC-3 Under PMK 172/2023

The Country-by-Country Report (CbCR) is one of the most complex transfer pricing documents because it demands global transparency. Unlike the Master File and Local File, which are narrative and transactional in nature, the CbCR is aggregate and quantitative.

Pursuant to Article 31 of PMK 172/2023, the CbCR must be prepared based on data and information available up to the end of the Tax Year. Before finalizing the CbCR in XML format, Taxpayers are required to first prepare a Working Paper.

1. CbCR Working Paper (Annex Letter H)

Before filling out the primary forms, Taxpayers must compile a Working Paper. This document serves as the "kitchen" of the CbCR.

Function: To compile raw data from each constituent entity before it is aggregated by country in Form CBC-1.

Contents: Detailed information per entity including:

• Entity Name and TIN (Tax Identification Number).
• Main Business Activity (using alpha codes A through M).
• Gross Revenue (Independent, Affiliated, and Total).
• Profit/Loss Before Tax.
• Income Tax Withheld/Collected/Self-Paid.
• Income Tax Accrued (Payable).
• Stated Capital and Accumulated Retained Earnings.
• Number of Permanent Employees.
• Tangible Assets (other than cash).

2. Form CBC-1: Allocation of Income, Taxes, and Business Activities (Annex Letter F)

This is the primary form that presents aggregate (combined) data of all constituent entities within a specific country or jurisdiction. Data is displayed per country, not per company.

Columns in CBC-1:

• Country/Jurisdiction: A list of all countries where group members are domiciled. (Note: Use "NON-TAX RESIDENT" for entities without domicile).
• Gross Revenues: Independent (third parties) and Related (intercompany). Excludes dividends from affiliates treated as expenses in the payer's country.
• Profit (Loss) Before Tax: Includes all items of income and extraordinary items.
• Income Tax Paid (Cash Basis): Amount of tax actually paid during the year, including foreign WHT.
• Income Tax Accrued: Current tax expense on the profit of the current year (excludes deferred taxes).
• Stated Capital & Accumulated Retained Earnings: Aggregated capital data in that country.
• Number of Employees: Number of Full-Time Equivalent (FTE).
• Tangible Assets: Net book value (excludes cash and intangibles).

Important Numerical Formatting Rules:

Based on instructions in Annex Letter F, currency values must not use decimals.

3. Form CBC-2: List of Group Entities and Primary Business Activities (Annex Letter G)

This form provides the "who does what" context for each country.

• Country/Jurisdiction: Follows the same order as in CBC-1.
• Entity Name: Every company domiciled in that country. (Note: Mention country of incorporation if different from tax domicile).
• Primary Business Activities: Check (✓) relevant activity columns (Codes A through M).

4. Form CBC-3: Additional Information (Annex Letter G)

A free-text narrative form for essential explanations not captured in CBC-1 or CBC-2.

Mandatory Information:

• Data Sources: Consolidated FS, Statutory FS, or Internal Management Reports.
• Reporting Currency: The currency used for the report.
• Exchange Rates: Rates used for conversion.
• Consistency: Explanation if data sources changed from the previous year.
• "Other" Activities: Detailed explanation for code M.

Reporting Format and Language

Digital Format: The CbCR must be submitted electronically in XML (Extensible Markup Language) format via the Coretax account.

Language: Must be prepared in Indonesian. If books are in a foreign language (with permission), a translation must be provided.