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Indirect Cost Agreement

Indirect Cost Agreement Template for Indonesia

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Key Requirements PROMPT example:

Indirect Cost Agreement

"I need an Indirect Cost Agreement under Indonesian law for allocating shared IT and administrative costs between our parent company in Jakarta and three regional subsidiaries, with the agreement to commence from March 1, 2025."

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Document background
The Indirect Cost Agreement is essential for organizations operating in Indonesia that need to establish a formal framework for allocating shared or indirect costs across different business units, subsidiaries, or related entities. This document type is particularly relevant when companies need to comply with Indonesian tax regulations, accounting standards, and corporate law requirements while managing complex cost allocation scenarios. The agreement becomes necessary when organizations have shared resources, facilities, or services where direct attribution of costs is not practical. It provides detailed methodologies for cost allocation, ensures transparency in cost sharing arrangements, and establishes clear reporting and documentation requirements that align with Indonesian regulatory standards, particularly the Ministry of Finance Regulation No. 213/PMK.03/2016 regarding cost evidence documentation.
Suggested Sections

1. Parties: Identification of the contracting parties, including their legal status and registered addresses

2. Background: Context of the agreement and the business relationship between the parties

3. Definitions: Detailed definitions of terms used in the agreement, particularly technical terms related to indirect costs

4. Scope of Agreement: Clear delineation of what activities and costs are covered under the agreement

5. Indirect Cost Categories: Detailed categorization of allowable indirect costs

6. Cost Allocation Methodology: Specific methods and formulas for calculating and allocating indirect costs

7. Reporting Requirements: Frequency and format of cost reporting, including documentation requirements

8. Payment Terms: Terms and conditions for payment of indirect costs, including timing and method

9. Audit Rights: Rights and procedures for auditing indirect cost calculations and supporting documentation

10. Compliance Requirements: Regulatory and accounting standards that must be adhered to

11. Term and Termination: Duration of the agreement and conditions for termination

12. Governing Law and Dispute Resolution: Applicable law and methods for resolving disputes

Optional Sections

1. Government Compliance: Required when the agreement involves government entities or public funds

2. International Operations: Needed when the agreement covers cross-border operations or multiple jurisdictions

3. Special Industry Requirements: Specific provisions required for regulated industries

4. Force Majeure: Provisions for handling unexpected events that may affect cost allocation

5. Tax Considerations: Special tax provisions when specific tax treatments or international tax issues are involved

6. Currency and Exchange Rates: Required when costs are incurred or paid in multiple currencies

Suggested Schedules

1. Schedule A - Cost Pool Definitions: Detailed definitions and examples of each type of indirect cost

2. Schedule B - Allocation Formulas: Mathematical formulas and methodologies for cost allocation

3. Schedule C - Reporting Templates: Standard templates for periodic cost reporting

4. Schedule D - Documentation Requirements: List of required supporting documents for cost claims

5. Appendix 1 - Rate Cards: Standard rates for various types of indirect costs

6. Appendix 2 - Compliance Checklist: Checklist for ensuring compliance with regulatory requirements

7. Appendix 3 - Audit Procedures: Detailed procedures for conducting cost audits

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions


















































Clauses



































Relevant Industries

Manufacturing

Construction

Oil and Gas

Mining

Technology Services

Shared Services

Professional Services

Infrastructure

Telecommunications

Healthcare

Education

Research and Development

Relevant Teams

Finance

Accounting

Tax

Legal

Compliance

Operations

Procurement

Treasury

Internal Audit

Corporate Services

Shared Services

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Cost Accounting Manager

Financial Controller

Tax Manager

Compliance Officer

Operations Director

Shared Services Manager

Business Unit Head

Corporate Finance Manager

Treasury Manager

Procurement Manager

Legal Counsel

Audit Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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