Sustainable FAR: Rethinking Transfer Pricing Risk In Circular Economy Governance
Abstract
Penelitian ini mengkaji bagaimana risiko keberlanjutan dapat diintegrasikan ke dalam kerangka Function–Assets–Risk (FAR) pada dokumentasi Transfer Pricing (TP). Meskipun OECD Guidelines menekankan bahwa “returns must follow risks,” FAR tradisional masih terbatas pada risiko pasar, kredit, operasional, finansial, dan hukum. Berdasarkan literatur terbaru, studi ini memperkenalkan Sustainable FAR Analysis dengan memasukkan risiko lingkungan, sosial, tata kelola (ESG), rantai pasok, dan reputasi. Dengan pendekatan kualitatif eksploratif melalui kajian literatur dan analisis dokumen, didukung ilustrasi empiris dari perusahaan tercatat di BEI, temuan menunjukkan bahwa entitas yang menanggung risiko keberlanjutan berhak atas risk premium. Penelitian menyimpulkan bahwa TP tidak hanya sebagai alat kepatuhan, tetapi juga instrumen tata kelola berkelanjutan yang selaras dengan tujuan circular economy.
This study examines how sustainability risk can be integrated into the Function–Assets–Risk (FAR) framework in Transfer Pricing (TP) documentation. While OECD Guidelines emphasize that “returns must follow risks,” traditional FAR has been limited to market, credit, operational, financial, and legal risks. Building on recent literature, this paper introduces Sustainable FAR Analysis by incorporating environmental, social, governance (ESG), supply chain, and reputational risks. Using a qualitative exploratory approach through literature review and document analysis, supported by empirical illustrations from IDX-listed companies, the findings show that entities bearing sustainability risks are entitled to a risk premium. The study concludes that TP should function not only as a compliance tool but also as an instrument of sustainable governance aligned with circular economy objectives
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