Indonesia Tax Guide 2022
Indonesia taxation system is based on residency. An individual or entity who has met certain criteria must register for a certain tax identification number (NPWP) to carry out its taxation rights and obligations. This is the updated tax guide for 2022.
The Indonesia Tax Guide 2022 (a Concise Guide)
A flat rate of 22% applies for fiscal year 2021 and reduced to 20% starting fiscal year 2022. Public companies that satisfy a minimum listing requirement of 40% and other conditions are entitled to a tax cut of 3% off the standard rate.
Small enterprises, i.e. corporate taxpayers with an annual turnover of not more than Rp 50 billion, are entitled to a 50% discount of the standard tax rate which is imposed proportionally on taxable income of the part of gross turnover up to Rp 4.8 billion. Enterprises with gross turnover of not more than Rp 4.8 billion are subject to Final Tax at 0.5% of turnover.
Taxation on Certain Offshore Income
Indonesian tax residents are generally taxed on a worldwide income basis. However, the following offshore income may be exempted from income tax if it is reinvested or used for business activities in Indonesia within a certain period:
- Income received by an Indonesian taxpayer from a PE abroad;
- Dividends paid by companies abroad; and
- Active business income received by an Indonesian taxpayer from abroad (not from a PE or foreign subsidiary).
Controlled Foreign Companies
Certain income of a Controlled Foreign Companies (CFCs) are subject to deemed dividend rules in Indonesia. This income includes dividends, interest, rentals, royalties, and gains from sales or transfer of assets, with certain limitations. A CFC is a foreign entity that is at least 50% owned by an Indonesian taxpayer or at least 50% collectively owned by Indonesian taxpayers. The scope of CFC income also covers income from indirectly owned CFC with a minimum of 50% ownership by another CFC, or collective ownership by a number of CFCs (including under the same or different Indonesian taxpayers).
Expenditure incurred in relation to assets with a beneficial life of more than one year are categorized and depreciated from the month of acquisition by the consistent use of either the straight-line or the declining-balance method.
No. Tangible Assets Categories Useful Life Straight line method Declining balance method 1
Intangible property or costs, including the cost of extending building use rights, rights for business use, rights for use and goodwill with a useful life of more than one year, should be amortised on the following bases, as appropriate:
a. Using the straight line or the declining balance method at the rates specified in categories 1, 2, 3, and 4 under Depreciation (above) based on the useful life of the property that is applicable for:
- general intangible assets;
- the costs of incorporation and expansion of the capital of an enterprise; and
- the capitalised costs incurred before the commencement of commercial operations, with a useful life of longer than one year. Classification into the appropriate category is determined on the basis of the nearest useful life.
b. Using the production unit method on costs incurred in the acquisition of the right to oil and natural gas concessions, mining rights, forest concessions, and other rights to exploit natural resources and natural products with a beneficial life of longer than one year. Other than for oil and natural gas concessions, the amortisation may not exceed 20% per annum.
Assets Arising from Tax Amnesty Program
Indonesia has rolled out Tax Amnesty program from 1 July 2016 to 31 March 2017 and any newly declared assets under this program cannot be depreciated or amortised for tax purposes.
- Benefits-in-kind (BIKs) (e.g., free housing, 50% of the acquisition and maintenance costs of certain company provided cars), except food and drink provided to all employees, employee benefits required for job performance such as protective clothing and uniforms, transportation costs to and from the place of work, accommodation for ship crew and the likes, the cost of providing BIKs in remote areas, and 50% of the acquisition and maintenance costs of cellular phones;
- Private expenses;
- Non-business gifts and aid, except certain religious contributions/alms and certain donations;
- Provisions, except for: provision for doubtful accounts for banking and certain financial institutions, provision
for insurance companies, deposit security provision for the Deposit Insurance Corporation (Lembaga Penjamin Simpanan/LPS), reclamation provision for mining companies, forestation provision for forestry companies, and area closure and maintenance provision for industrial waste processing businesses;
- Income tax payments;
- Tax penalties;
- Profit distributions;
- Employer contributions for life, health and accident insurance and contributions to unapproved pension funds, unless the contributions are treated as part of the taxable income of employees;
- Expenses relating to income which is taxed at a final rate, e.g., interest on loans relating to time deposits;
- Expenses relating to income which is exempt from tax, e.g., interest on loans used to buy shares where dividends to be received are not subject to income tax;
- Salaries or compensation received by partnership or firmas members where their participation is not divided into shares.
Debt to Equity Ratio
A single ratio of 4:1 is generally applicable, which means the amount of debt allowable in order to obtain full deductibility of the financing cost is limited to four times the equity amount.
Losses may be carried forward for a maximum of five years. The carrying back of losses is not allowed. Tax consolidation and group relief is not available.
Tax is liable to be withheld from dividends as follows:
a. Resident recipients:
Dividend received from an Indonesian company is non-tax object if it is received or earned by:
- Resident individual taxpayers who reinvest it in Indonesia within certain period; and/or
- Resident corporate taxpayers.
b. Non-resident recipients:
20% (lower for treaty countries) final withholding tax is due on dividends paid to a non-resident recipient.
Deemed profit margins
The following businesses have deemed profit margins for tax purposes:
|No.||Deemed Profit in Gross Revenue||Effective Income Tax Rate|
|1||Domestic shipping operations||4%||1.20%|
|2||Domestic airline operations||6%||1.80%|
|3||Foreign shipping and airline operations||6%||2.64%|
|4||Foreign oil and gas drilling operations||15%||3.75%|
|5||Certain Ministry of Trade representative offices||1% of export value||0.25%|
The Income Tax Law defines related parties as:
- Taxpayer has capital participation directly or indirectly at least 25% upon another Taxpayers; the relationship between Taxpayers through ownership at least 25% upon two or more Taxpayers; or relationship between two or more Taxpayers mentioned later;
- Taxpayer controls the other Taxpayer or two or more Taxpayers are under the same control, either directly or indirectly; or
- There are family relationship either blood relationship or by marriage in vertical and/or horizontal lineage of one degree.
Transactions between related parties must be consistent with the arm’s length principle.
The MoF issued a new regulation dated 30 December 2016 regarding transfer pricing documentation which requires taxpayers under certain criteria to prepare transfer pricing documentation, namely: Master file, Local file, and Country-by-Country Report (CbCR). The Master file and Local file must be available if requested by the DGT, while the summary must be attached to the Corporate Income Tax Return (CITR) of the tax year concerned. The Notification of the CbCR obligation and the CbCR itself (if required) must be submitted to the tax office within 12 months after the end of a tax year.
Income Tax on E-commerce and Electronic Transaction Tax
Foreign e-commerce players with a significant economic presence in Indonesia can be deemed as having a Permanent Establishment (PE) in Indonesia. If a PE cannot be deemed to exist under the existing rules of an applicable Tax Treaty, affected e-commerce players will be subject to an Electronic Transaction Tax (ETT). ETT will be imposed on direct sales or sales through the marketplace.
Normal Tax Rates
Most income earned by individual tax residents is subject to income tax at the following normal tax rates:
|No.||Taxable Income||Rate||Tax Rp|
|1||Up to Rp 50,000,000||5%||2,500,000|
|2||Above Rp 50,000,000 up to Rp 250,000,000||15%||30,000,000|
|3||Above Rp 250,000,000 up to Rp 500,000,000||25%||62,500,000|
|4||Above Rp 500,000,000||30%||30% of the relevant amount|
Concessional Tax Rates
The final tax rates for severance payments (if paid within two years) are as follows:
|No.||Gross Income||Rate||Tax Rp|
|1||Up to Rp 50,000,000||Nil||Nil|
|2||Above Rp 50,000,000 up to Rp 100,000,000||5%||2,500,000|
|3||Above Rp 100,000,000 up to Rp 500,000,000||15%||60,000,000|
|4||Above Rp 500,000,000||25%||25% of the relevant amount|
The final tax rates for lump-sum pension payments from a Government-approved pension fund, old-age security saving payments from Badan Penyelenggara Jaminan Sosial (BPJS) Ketenagakerjaan (workers’ social security program) if paid within two years are as follows:
|No.||Gross Income||Rate||Tax Rp|
|1||Up to Rp 50,000,000||Nil||Nil|
|2||Above Rp 50,000,000||5%||5% of the relevant amount|
Main Personal Relief
Annual non-taxable income (Penghasilan Tidak Kena Pajak/PTKP) for resident individuals is as follows:
|Each dependant (max. of 3)||4,500,000|
|Occupational expenses (5% of gross income, max. Rp. 500,000/month)||6,000,000|
|Employee contribution to BPJS Ketenagakerjaan for old age security savings (2% of gross income)||Full amount|
|Pension maintenance expenses (5% of gross income, max. Rp 200,000/month)||2,400,000|
An individual is regarded as a tax resident if he/she fulfils any of the following conditions:
- He/she resides in Indonesia;
- He/she is present in Indonesia for more than 183 days in any 12-month period;
- He/she is present in Indonesia during a fiscal year and intends to reside in Indonesia.
Social Security System
Employers are responsible for ensuring that their employees are covered by a social security program. Employees’ contributions are collected by the employers through payroll deductions. These must be paid together with the employer’s contributions.
From 1 January 2014, a comprehensive social security program covers all Indonesian citizens is in place. The social
security system is administered by:
- Social Security Agency for health insurance (BPJS Kesehatan) – covering health insurance
- Social Security Agency for worker’s social security (BJPS Ketenagakerjaan) – covering accidents, insurance, old age savings, death insurance and pensions
The current premium contributions are as follows:
|No.||Areas Covered||Borne by Employers||Borne by Employees||Remarks|
|1||Working accident protection||0.24-1.74%||–|
|3||Old age savings||3.70%||2%|
|4||Health care||4%||1%||Max. calculation base is Rp 12,000,000/month|
|5||Pension||2%||1%||Max. based on BPJS regulation|
|6||BPJS Kesehatan||4%||1%||1% for additional family member|
The compulsory requirement to join the new social security scheme applies to all employees, including expatriates who have been working in Indonesia for more than six months.
Indonesian income tax is collected mainly through a system of withholding taxes. Where a particular item of income is subject to withholding tax, the payer is generally held responsible for withholding or collection of the tax. These withholding taxes are commonly referred to using the relevant article of the Income Tax (Pajak Penghasilan/PPh) Law, as follows:
- Article 21 income tax (PPh 21)
Employers are required to withhold PPh 21 from the salaries payable to their employees and pay the tax to the State Treasury on their behalf. Resident individual taxpayers without an NPWP are subject to a surcharge of 20% in addition to the standard withholding tax.
- Article 22 income tax (PPh 22)
PPh 22 is typically applicable to the payments of the following events:
No. Event Tax rate (%) Tax base 1 The import of: A. Certain end customer goods B. End consumer goods other than (a) C. Goods other than (a) and (b) using an Importer Identification Number (Angka Pengenal Impor/API): i) Soybeans, wheat and flour wheat ii) Other than (i) D. Goods other than (a) and (b) without an API A. 10 B. 7.5 Ci) 0.5 Cii) 2.5 D. 7.5 Import value (i.e., CIF value plus duties payable) 2 The auctioned imported goods 7.5 Auction prices 3 The purchase of goods by the Government requiring payment from the State Treasury and Proxy of Budget User (Kuasa Pengguna Anggaran/KPA) 1.5 Selling prices 4 The purchase of goods by State Owned Enterprises (Badan Usaha Milik Negara/BUMN) and some of their subsidiaries 1.5 Selling prices 5 The purchase of oil fuel by gas stations from Pertamina and its subsidiaries 0.25 Selling prices 6 The purchase of oil fuel by gas stations from parties other than Pertamina and its subsidiaries 0.3 Selling prices 7 The purchase of oil fuel by parties other than gas stations 0.3 Selling prices 8 The purchase of gas fuel 0.3 Selling prices 9 The purchase of lubricants 0.3 Selling prices 10 The purchase of cement by local distributors 0.25 Selling prices 11 The purchase of paper products by local distributors 0.1 Selling prices 12 The purchase of steel products by local distributors 0.3 Selling prices 13 The purchase of automotive products by local distributors 0.45 Selling prices 14 The purchase of pharmaceutical products by local distributors 0.3 Selling prices 15 The purchase of motor vehicles from Sole Agents (Agen Tunggal Pemegang Merek/ATPM), Agents (Agen Pemegang Merek/APM) and general importers 0.45 Selling prices 16 The purchase of forestry, plantation, agriculture, cattle breeding, and fishery products by manufacturers or exporters 0.25 Selling prices 17 The export of coal, metal and non-metal minerals by exporters other than those engaged in a Mining Cooperation Agreement or a Contract of Work with the Government 0.15 Export value 18 The purchase of coal, metal and non-metal minerals from companies or individuals holding a mining license (Izin Usaha Pertambangan/IUP) 0.15 Selling prices 19 The purchase of gold bars 0.45 Selling prices 20 The purchase of very luxurious goods 5 Selling prices
Taxpayers without an NPWP will be subject to a surcharge of 100% in addition to the standard tax rate.
- Article 4 (2) – final income tax (PPh Final)
Resident companies, PEs, representatives of foreign companies, organisations and appointed individuals are required to withhold final tax from the following gross payments to resident taxpayers and PEs:
No. Description Tax rate 1 Rental of land and/or buildings 10% 2 Proceeds from transfers of land and building rights 2.5% 3 Fees for construction work performance 2/3/4% 4 Fees for construction work planning 4/6% 5 Fees for construction work supervision 4/6% 6 Interest on time or saving deposits and on Bank Indonesia Certificates (SBIs) other than that payable to banks operating in Indonesia and to Governmentapproved pension funds 20% 7 Interest on bonds other than that payable to banks operating in Indonesia and Government-approved pension funds 15% 8 Proceeds from sale of shares on Indonesian stock exchanges. To use this rate, founder shareholders must pay tax at 0.5% of the market price of their shares upon listing, otherwise, gains on subsequent sales are taxed under normal rules 0.1% 9 Income from lottery prizes 25% 10 Certain income received by individuals and corporate (except PEs) with gross turnover of not more than Rp 4.8 billion in one fiscal year 0.5%
- Article 23 income tax (PPh 23)
Certain types of income paid or payable to resident taxpayers are subject to PPh 23 at a rate of either 15% or 2% of the gross amounts:
A. PPh 23 is due at a rate of 15% of the gross amounts on the following:
2. Interest, including premiums, discounts and loan guarantee fees;
4. Prizes and awards.
B. PPh 23 is due at a rate of 2% of the gross amounts on the fees for the following:
1. Rentals of assets other than land and buildings;
2. Compensation with respect to technical services, management services, consultation services and other services, except those have been withheld of Income Tax as referred to Article 21.
- Article 26 income tax (PPh 26)
Resident taxpayers, organisations and representatives of foreign companies are required to withhold tax at a rate of 20% from the following payments to non-residents:
A. On gross amounts:
2. Interest, including premiums, discounts and guarantee fees. The withholding tax rate for this particular item can be lowered by a GR;
3. Royalties, rents and payments for the use of assets;
4. Fees for services, work, and activities;
5. Prizes and awards;
6. Pensions and any other periodic payments;
7. Swap premiums and other hedging transactions;
8. Gains from debt write-offs;
9. After-tax profits of a branch or PE.
B. On Estimated Net Income (ENI), being a specified percentage of the gross amount:
ENI Effective tax rate Insurance premiums paid to insurance companies: a. by the insured b. by Indonesian insurance companies c. by Indonesian reinsurance companies a. 50% b. 10% c. 5% a. 10% b. 2% c. 1% Sale of non-listed Indonesian company shares 25% 5% Sale of a conduit company located in tax haven country where this company serves as an intermediary for the holding of Indonesian company shares or a PE 25% 5% Sale of luxurious jewelleries, diamonds, gold, luxurious watches, antiques, paintings, cars, motorcycles, yachts and light aircrafts with sale value of above Rp 10 million 25% 5%
Where the recipient is resident in a country which has a tax treaty with Indonesia, the withholding tax rates may be reduced or exempted.
Value Added Tax (VAT) is typically due on events involving the transfer of taxable goods or the provision of taxable services in the Indonesian Customs Area. The VAT obligations arise upon the above deliveries with the value exceeding Rp 4.8 billion per annum.
Tax Rates and Tax Base
The VAT rate is typically 10%. This may be increased or decreased to 15% or 5% according to a GR. However, VAT on the export of taxable tangible and intangible goods as well as export of services is fixed at 0%. Certain limitations for the zero-rated VAT apply to export of services.
VAT is calculated by applying the VAT rate to a relevant tax base. In most cases, the tax base is the transaction value agreed between the parties concerned. For certain events or situations, other criteria must be used as the tax base, including:
- Market value for transactions between related parties, remaining inventories of taxable goods upon a company’s dissolution, and sales of (non-inventory) assets originally not for sale;
- Cost of sales (selling price minus gross margin) for own-use or free gifts and internal deliveries of taxable goods (e.g., between branches, or from the head office to branches);
- Auction price for deliveries of taxable goods through an auction officer;
- Agreed price for deliveries of taxable goods through an intermediary trader;
- Average result per film for movies;
- Rp 12 million per copy of imported movies;
- 20% of total costs incurred or paid, exclusive of the acquisition price of land, for the self-construction of a building;
- Retail selling prices for deliveries or imports of tobacco products;
- 10% of the actual billing for package shipment services;
- 10% of the actual billing for tour and tourism agency services whose deliveries are not based on commissions;
- 20% of selling price on the deliveries of gold jewellery, including services carried out by the factory in relation to gold jewellery;
- 10% of the actual billing on the deliveries of freight forwarding services in which billing includes freight charges;
- 100/110 of the Government subsidy value and 100/110 of the highest retail price determined by the Minister of Agriculture for deliveries of certain fertilizer for agricultural sector.
- 10% of selling price on certain deliveries of agricultural products by certain sellers.
- 100/110 from the retail price charged by Government-appointed entity or 10/101 from the margin of the distribution agents for the delivery of certain non-subsidised Liquefied Petroleum Gas.
By law, all goods and services, unless otherwise stated, constitute taxable goods or taxable services. The legal negative list sets out which goods and services are categorised as non-taxable with certain exceptions, as follows:
- Mining or drilling products extracted directly from their sources, for example crude oil, natural gas, geothermal energy, sand and gravel, iron ore, tin ore, copper ore, gold ore, silver ore and bauxite ore;
- Basic commodities, for example rice, salt, corn, sago, soybeans, and fish;
- Food and drink served in hotels, restaurants and the like, either consumed in the vicinity or taken away, including food and drink delivered by caterers; and
- Money, gold bars and securities.
- Medical health services;
- Social services, for example orphanages and funeral services;
- Mail services using stamps;
- Financial services;
- Insurance services;
- Religious services;
- Educational services;
- Art and entertainment services;
- Broadcasting services which are not used for advertising;
- Public transportation on land and water and domestic air transport that is an integral part of international air transport;
- Manpower services;
- Hotel services;
- Public services provided by the Government;
- Parking area services;
- Public telephone services using coins;
- Remittance services by money orders; and
- Food or catering services.
Crediting Input VAT
VAT must be accounted for to the DGT every month. Input tax for a particular tax period (month), in principle, must be claimed as a tax credit against the output VAT for the same tax period. However, the claim can still be made within three months of the end of the particular tax period if the input tax has not yet been expensed.
Refund applications can be made at the end of a book year. The DGT is required to make a decision on a VAT refund application, on the basis of a VAT audit, within 12 months of the receipt of a complete application. If no decision has been made within 12 months, the application is considered to have been approved.
VAT on E-Commerce
Indonesian VAT will be imposed on the utilisation of certain intangible goods and services provided from overseas to Indonesian customers through an electronic system. Foreign sellers, foreign service providers, or foreign e-commerce marketplaces and domestic e-commerce marketplace will be appointed as VAT Collectors if their activity in the Indonesian market meets either of the following thresholds:
- transaction value with customers in Indonesia exceeding IDR 600 million in a year or IDR 50 million in a month; or
- access to their e-commerce platform from Indonesia exceeds 12,000 users in 12 months, or 1,000 users in one month.
VAT Exemption Facilities
The deliveries and/or import of taxable goods designated as strategic goods are exempt from VAT. The designation of strategic goods is made through a GR. Currently, the following goods are included:
- Capital goods in the form of machinery and plant and equipment required for the manufacturing of taxable goods;
- Animal husbandry products, including hunting and trapping, and fishery products, including the capture and cultivation of fish;
- Raw hides and skins which were not tanned;
- Seeds and seedlings for agricultural, plantation, forestry, farm and animal husbandry products;
- Cattle, poultry and fish feed, and the raw materials for manufacturing these;
- Raw materials of silver craft in the form of granules and/or bars;
- Basic flats with size 21m2 up to 36m2;
- Electricity, except household electricity exceeding 6,600 VA, including electricity connection costs;
- Import or delivery of Liquified Natural Gas.
Other VAT Exemption Schemes
To support the achievement of certain national objectives, VAT is exempt on the imports and/or deliveries of the following taxable goods or taxable services:
- Weapons, ammunition, and various other appliances for use by the armed forces and the state police;
- Equipment and spare parts for providing boundary data and aerial photographs used by the armed forces;
- Polio vaccines for use in the National Immunisation Program;
- General education and religious books;
- Low-cost houses, low costs flats with size less than 21m2, labor low-cost accommodation, and student accommodation with certain threshold;
- Services rendered for the construction of low-cost accommodations in point (e) and places of worship;
- Rental of low-cost houses and low-costs flats less than 21m2;
- Certain port services rendered to shipping companies that are serving international routes;
- Clean water, excluding bottled drinking water.
In addition to VAT, deliveries or imports of certain manufactured taxable goods may be subject to Luxury-goods Sales Tax (LST). A particular item will only attract LST once, i.e., tax will be charged either on importation of the good or on delivery by the (resident) manufacturer to another party.
LST must be accounted for every month together with VAT. The importer or the manufacturer of the goods is held responsible for the settlement of the LST.
A summary of the indicative LST rates is set out below:
|Group / LST Rates||10%||20%||30%||40%||50%||60%||75%||125%|
|Luxury residences such as luxury houses, apartments, condominiums, town houses and the like||V|
|Balloons, dirigibles, and other non-powered aircraft||V|
|Shotguns and other arm cartridges, firearms and other arms, except for the state purposes||V||V|
|Aircraft other than those for the state or commercial air-transport purposes||V|
|Luxury cruisers, except for the need of the state and public transport as well as yacht for tourism||V|
Import duty is generally payable at rates from 0% – 150% on the customs value of imported goods. Customs value is calculated on Cost, Insurance and Freight level (CIF).
|Automobiles||Passenger & commercial||5 to 50|
|Automobile components||Incompletely Knocked Down||0 to 7.5|
|Part by Part||0 to 10|
|Vessels||Ships, boats and floating structures||0 to 5|
|Aircraft||Balloons, helicopters, aeroplanes, parachutes, and aircraft launching gear||0|
|Electronic goods||Camera, refrigerator, cellular phone and others||0 to 15|
|Textile, textile products and accessories||Bags, footwear, harnesses, apparels, and clothing accessories, etc||5 to 35|
|Beverages, ethyl alcohol & alcoholic drinks||Ethyl alcohol, juice, beer, wine, spirits and other beverages||5 to 150 or, Rp. 14,000/ltr|
|Essential oils and resinoids||Odoriferous substances||5 to 150|
|Agricultural products||Animal & vegetable products||0 to 30|
|Furniture||Bedding, mattresses, lamp and lighting fittings, and others||5 to 20|
|Toys||Toys, games and sport requisites, parts and accessories thereof||5 to 20|
|Plastic||Plastics and article thereof||0 to 25|
|Rubber||Rubber and article thereof||0 to 15|
|Wood||Wood and article thereof||0 to 25|
|Steel||Steels and article thereof||0 to 20|
|Others||Chemicals, pharmaceutical products, software, works of art, arms and ammunition, musical instrument, and others||0 to 40|
Agreements on Preferential Duty Rates
Indonesia has also implemented the following agreements on preferential duty rates with other countries:
- ASEAN – China Free Trade Agreement (FTA)
- ASEAN – Korea FTA
- ASEAN – India FTA
- ASEAN – Australia – New Zealand FTA
- ASEAN – Hong Kong, China FTA
- ASEAN – Japan Comprehensive Economic Partnership
- Indonesia – Australia Comprehensive Economic Partnership Agreement
- Indonesia – Pakistan Preferential Trade Agreement
- Indonesia – Japan Economic Partnership Agreement
- Indonesia – Chile Comprehensive Economic Partnership
- Memorandum of Understanding between The Government of The Republic of Indonesia and The Government of The State of Palestine on Trade Facilitation for Certain Products Originating from Palestinian Territories.
Export duty can be calculated based on a certain percentage of customs value (ad valorem) or specifically based on duty rate/quantity in a certain currency. Customs value is determined by the Director General of Customs and Excise in accordance with the price benchmark set by Ministry of Trade.
|Leather and wood||Leather made from certain furry animals, veneer, chip wood, processed wood||2 to 25|
|Cocoa beans||0 to 15|
|Palm fruit, Crude Palm Oil (CPO) and its derivative products||Fresh fruit bars, CPO, Crude Palm Kernel Oil (CPKO), hydrogenated CPO/CPKO, Palm Fatty Acid Distillate (PFAD), biodiesel||USD 0 to 262 / Metrics Ton|
|Refined mineral products||Certain metals||0 to 5|
|Certain mineral products||Certain nickel and bauxite||10|
Excise is imposed on certain goods for which distribution and consumption needs to be controlled due to their potential negative effect on society. Currently, goods subject to excise are alcoholic products and tobacco products.
|Ethyl alcohol||Rp 20,000/litre|
|Alcoholic drink||Rp 15,000/litre to Rp 139,000/litre|
|Ethyl alcohol concentrate||Rp 1,000/gram|
|Tobacco products||Rp 10 to Rp 110,000/stick or gram or 57% for certain tobacco products|
Income Tax Concessions
The MoF may provide an avenue for CIT reduction of 50% or 100% of the CIT due for 5–20 years from the start of commercial production depending on the investment value. After the period for which the CIT reduction is granted, the taxpayer will be provided with CIT reduction of 25% or 50% of CIT payable for the following two fiscal years depending on the investment value.
This facility is provided to firms in pioneer industries which have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy. Currently this facility is available for the business sectors with specific Indonesian Standard Classification of Business Field (Klasifikasi Baku Lapangan Usaha/ KBLI) as listed in this link page: https://bizindo.com/kbli-2020-in-english/. Business sectors outside this list may also apply by fulfilling the self-assessed quantitative scoring system to justify their nature as a pioneer industry.
The MoF may provide the following tax concessions to PT companies following their investment in certain designated business areas or in certain designated regions:
- A reduction in net income of up to 30% of the amount invested, prorated at 5% for six years of the commercial production, provided that the assets invested are not transferred out within six years;
- Accelerated depreciation and/or amortisation deductions;
- Extension of tax losses carry-forward for up to ten years;
- A reduction of the withholding tax rate on dividends paid to non-residents to 10% (or lower if treaty relief is available).
The applicant must meet the following high level criteria to be eligible for the above tax facilities:
- high investment value or for export purposes;
- high absorption of manpower; or
- high local content.
Super Deduction Facility
The super deduction facility will be given to certain industries as follows:
- Facility for labour-intensive industries; in the form of a reduction in net income of 60% of the amount invested in the form of tangible fixed assets (including land utilised for main business), spread throughout a certain period;
- Facility for human resources development in certain competencies; in the form of a reduction in gross income of up to 200% of the amount spent for this activity;
- Facility for certain R&D activities in Indonesia; in the form of reduction in gross income of up to 300% of the amount spent for this activity.
Tax Cut for Public Companies
A 3% corporate tax cut can be granted to public companies which satisfy the following conditions:
- At least 40% of their paid-in shares are listed for trading in the Indonesian Stock Exchange (IDX). Shares owned by certain related parties and treasury shares cannot be counted for this purpose;
- The public should consist of at least 300 individuals, each holding less than 5% of the paid-in shares;
These two conditions must be maintained for at least 183 days in a tax year. If in a particular year either or both of the conditions are not met, the facility is not applicable for that year.
Generally, transfers of assets in business mergers, consolidations, acquisition, or business splits must be at market value. Gains resulting from this kind of restructuring are assessable, while losses are generally claimable as a deduction from income. However, a tax-neutral merger, consolidation, or acquisition under which assets are transferred at book value, can be conducted but is subject to the approval of the DGT.
Tax Facility for Venture Capital Company Investment in Small and Medium Enterprises
The dividends received by a Venture Capital Company (VCC) from capital participation in a micro, small, or medium sized enterprises of which the shares are not traded at a stock exchange in Indonesia, with certain requirements, are non-taxable.
LST Incentive for Motor Vehicles
LST incentive is available for “green” motor vehicles in the form of LST base reduction (currently to 75%, 50%, or 0% of the LST base) that will effectively lower the applied LST or mean there is even no LST for certain motor vehicles.
Concessions on Special Projects and Special Zones
Foreign Loan-Funded and Foreign Grant-Funded Government Projects
Government projects funded with foreign loans or foreign grants may be eligible for special tax treatment for the income derived from that funding. The projects that typically qualify are set out in the state Project Table of Contents (Daftar Isian Proyek/DIP) or other similar documents.
Main contractors, consultants and suppliers for foreign grant-funded or loan-funded Government projects may have their income tax liability borne by the Government. This facility is not available for second-level contractors, consultants and suppliers.
Apart from the above concessions, the main contractors, consultants and suppliers also enjoy the following tax facilities on the importation of goods and the use of foreign taxable services and/or foreign intangible goods for foreign grant-funded or foreign loan-funded Government projects:
- Exemption from import duty;
- Non-collection of VAT and LST;
- Non-collection of Article 22 Income Tax on imports.
Public Private Partnership/PPP (Kerjasama Pemerintah dengan Badan Usaha)
This facility is intended to promote and improve cooperation between the Government and business entities with respect to the provision of infrastructure and social services. The facility can be approved by the MoF based on the proposal from the responsible institution for cooperation projects.
Integrated Economic Development Zones
Companies conducting business in an Integrated Economic Development Zone (Kawasan Pengembangan Ekonomi Terpadu/KAPET) may enjoy income tax facilities similar to Inbound Investment Incentives under the Income Tax Concessions. The designation of an area as a KAPET is set out in a specific Presidential Decree.
In addition to the above facility, an Entrepreneur in Bonded Zone/Pengusaha Di Kawasan Berikat (PDKB) in a KAPET may be granted tax facilities in the form of:
- Non-collection of VAT and LST on importation of certain goods;
- Exemption of Article 22 Income Tax on importation of certain goods;
- Postponement of import duty on capital goods and equipment, and goods and material for processing;
- Non-collection of VAT and LST on the domestic purchases of certain goods.
Bonded Stockpiling Area
Bonded Stockpiling Area (Tempat Penimbunan Berikat) currently consists of:
- Bonded Zone;
The Bonded Zone (Kawasan Berikat) facility is provided to manufacturing companies with export orientation, import
substitution, supporting downstream industry, and certain industries such as aircraft, shipbuilding, railways, and the
defense & security industry.
- Bonded Warehouse;
The Bonded Warehouse (Gudang Berikat) facility is intended to store imported goods which can be processed with one or more simple activities of certain goods to be released in certain period.
- Bonded Exhibition Place;
- Duty Free Shop;
- Bonded Auction Place;
- Bonded Recycling Area; and
- Bonded Logistic Centre.
The Bonded Logistic Centre (Pusat Logistik Berikat) facility is similar to the Bonded Warehouse facility, however, it is intended to store both imported goods from outside the Customs Area and/or goods from other places within the Indonesia Customs Area which can be processed with one or more simple activities within three years since the goods entering the Bonded Logistic Centre.
Special Economic Zones
Taxpayers conducting business in Special Economic Zones (Kawasan Ekonomi Khusus/KEK) may enjoy tax facilities. Tax holiday may be granted for taxpayers conducting main activities in KEK. The potential tax holiday on the CIT due is applicable for 10–20 years from the start of commercial production depending on the investment value. After the period for which the tax holiday is granted, the taxpayer will be provided with CIT reduction of 50% of CIT payable for the following two fiscal years.
Taxpayers being rejected for the CIT Reduction facility and taxpayers carrying out other activities in KEK, may apply for KEK-Tax Allowance facility which facilities are similar to the Tax Allowance facilities under the Income Tax Concessions. Taxpayers in KEK are also entitled to the following tax facilities:
- Non-collection of VAT and LST on importation of certain goods;
- Non-collection of Article 22 Income Tax on importation of certain goods;
- Exemption of import duty on importation of certain goods during the construction and development stage;
- Postponement of import duty for certain entities during the production stage;
- Non-collection of VAT on the utilisation of taxable services and/or intangible taxable goods from outside the Customs Area;
- Exemption of excise on certain goods to be used to produce non-excisable goods;
- Non-collection of VAT and/or LST on the domestic purchases of certain goods or services;
- Non-collection of VAT and/or LST on certain transactions within or between the Special Economic Zones companies;
- Non-collection of income tax on certain land and building transactions;
- Special tax treatments for certain transactions in tourism KEK; and/or
- Potential Regional Tax reduction of 50% up to 100%.
The determination and licensing of an Industrial Zone (Kawasan Industri/KI) are as granted by the Government. The applicable tax facilities depend on the classification
of the Industrial Development Area/IDA (Wilayah Pengembangan Industri/WPI) of the KI, namely:
1. Advance IDA (WPI Maju/WPIM)
2. Developing IDA (WPI Berkembang/ WPIB)
3. Potential I IDA (WPI Potensial I/WPIP I)
4. Potential II IDA (WPI Potensial II/WPIP II)
BKPM Masterlist Facility
BKPM may also provide import duty exemption through the issuance of a Masterlist facility for importing machinery and raw materials. An importer can also obtain an exemption from VAT, LST, and/or Article 22 Income Tax by applying to the DGT for approval.
Tax Exemption and Drawback Facilities for Exports
Tax facilities under the scheme of ease of imports for the production of goods to be fully exported (Kemudahan Impor Tujuan Ekspor/KITE) are as follows:
This exemption facility allows for most raw materials and sample goods to be imported without payment of import duty, provided that the finished products are exported. The VAT and/or LST on such importations are not-collected either.
This drawback facility allows for the recovery of import duty paid on imported raw materials that are incorporated into finished products which are subsequently exported.
Land and Building Tax
Land and building tax (Pajak Bumi dan Bangunan/PBB) is a tax on property chargeable on all land and/or buildings, unless exempted.
PBB is a part of regional taxes which are governed under Regional Taxes and Retribution (Pajak Daerah dan Retribusi Daerah/PDRD) Law in which each regional Government has to issue a regulation (Peraturan Daerah/PERDA) to regulate PBB in its territory.
PBB is payable annually following a Tax Due Notification Letter (Surat Pemberitahuan Pajak Terhutang/SPPT) issued by the Regional Government.
Under PDRD Law, the PBB rate is maximum 0.3% and the tax due is calculated by applying the tax rate on the sale value of the tax object (Nilai Jual Objek Pajak/NJOP) deducted by non-taxable NJOP. The non-taxable NJOP is set at Rp 10 million at the minimum. Any changes are to be made by issuing a PERDA.
Tax on Land and Building Transfer
A transfer of rights to land and building will give rise to income tax on the deemed gain on the transfer/sale to be charged to the transferor (seller). The tax is set at 2.5% of the gross transfer value (tax base). However, for transfers of simple houses and simple apartments conducted by taxpayers engaged in a property development business, the tax rate is 1%. This tax must be paid by the time the rights to land and building are transferred to the transferee. All the tax paid constitutes a final tax.
In general, the tax base is the higher of the transaction values stated in the relevant land and building right transfer deed and Sale and Purchase Binding Agreement (Perjanjian Pengikatan Jual Beli) based on actual transaction value or amount that should have been received.
Duty on the Acquisition of Land and Building Rights
A transfer of land and building rights will typically also give rise to duty on the acquisition of land and building rights (Bea Pengalihan Hak atas Tanah dan Bangunan/BPHTB) liability for the party receiving or obtaining the rights.
BPHTB is based on the Tax Object Acquisition Value (Nilai Perolehan Objek Pajak/NPOP), which in most cases is the higher of the market (transaction) value or the NJOP of the land and building rights concerned. The tax due on a particular event is determined by applying the applicable duty rate (5%) to the relevant NPOP, minus an allowable non-taxable threshold. The non-taxable threshold amount varies by region: the minimum is Rp. 60 million, except in the case of an inheritance, for which starts from Rp. 300 million. The Government may change the non-taxable threshold via regulation.
A notary is prohibited from signing a deed transferring rights until the BPHTB has been paid.
Stamp duty is nominal, and payable as a fixed amount of Rp. 10,000 on certain documents.
Examples of documents subject to stamp duty are as follows:
- Agreements, certificates, statement letters, or similar documents, and their copies.
- Notarial deeds and grosse, and their copies and excerpts.
- Deeds of a Land Deed Officer and their copies.
- Securities in any form and name.
- Securities transaction document.
- Auction documents in the form of excerpts, minutes, copies and grosse.
- Documents stating a sum of money above Rp. 5,000,000 which describe the receipt of money or contain an acknowledgement of debt payment or settlement, either entirely or partially.
- Documents to be used as instruments of evidence before a court.
A summary of these tax obligations is as follows:
Monthly Tax Obligations
|Type of tax||Tax Payment Deadline||Tax Return Filing Deadline|
|Article 21/26 Income Tax||The 10th of the following month||The 20th of the following month|
|Article 23/26 Income Tax||The 10th of the following month||The 20th of the following month|
|Article 25 Income Tax||The 15th of the following month||The 20th of the following month|
|Article 22 Income Tax – Tax Collector||The 10th of the following month||The 20th of the following month|
|Article 4(2) Income Tax||The 10th of the following month||The 20th of the following month|
|VAT and LST – Taxable Enterprise||Prior to the tax return filing deadline||The end of the following month|
|VAT and LST – VAT Collector||Vary depends on the type of Tax Collector||Vary depends on the type of Tax Collector|
Annual Tax Obligations
|Type of tax||Tax Payment Deadline||Tax Return Filing Deadline|
|Corporate Income Tax||The end of the fourth month after the book year end before filing the tax return||The end of the fourth month after the book year end|
|Individual Income Tax||The end of the third month after the year end before filing the tax return||The end of the third month after the year end|
|Land and Building Tax (PBB)||Six months after the receipt of a Tax Due Notification Letter (SPPT) from the Regional Government||N/A|
Late payments of the above taxes incur interest penalties based on the applicable monthly MoF Interest Rate plus surcharge for a maximum of 24 months. Part of a month, for example a single day, is considered a full month.
Late filing of a tax return or failure to file a tax return incurs an administrative penalty at the following amounts:
|Type of Tax Return||Amount in Rupiah|
|Other monthly tax returns||100,000|
|Individual income tax return||100,000|
|Corporate income tax return||1,000,000|
For annual income tax returns, taxpayers may extend the filing deadline by up to two months. This may be done by filing a written notification to the DGT before the deadline, together with a tentative tax calculation. The tax due according to the tentative calculation (if any) must be settled before submitting the extension notification. If the actual tax due based on the final tax calculation is higher than the tentative calculation, an interest penalty based on the applicable monthly MoF Interest Rate will apply to the difference until the shortfall is paid, for a maximum of 24 months.
Failure to file a tax return by the relevant deadline may result in the DGT to issue a warning letter to the taxpayer in question. The warning letter will typically require the taxpayer to file the tax return within 30 days of the warning letter date. Ignoring such a letter can prompt the DGT to issue an official tax assessment along with an administrative penalty of 50% of the assessed tax.
Early Tax Refunds
An early tax refund is available for taxpayers that meet certain criteria, as follows :
- Golden Taxpayers
- Taxpayers with low refund values
- Low-risk PKPs
A preliminary tax refund is requested by way of ticking the refund box in the relevant tax return. If the approved tax refund amount is different from the requested amount, the taxpayer can re-apply using a separate letter. However, the taxpayer needs to revise the relevant tax return if they do not want to re-apply. The DGT will conduct a formal and/or material examination on all applicants.
The tax office can still do a tax audit on the tax year or period that has been granted a preliminary tax refund and the administrative sanctions will be followed if the tax audit results in a tax underpayment positions.
By default, the books must be maintained in Rupiah, composed in Indonesian, and stored in Indonesia. Subject to specific DGT approval, foreign-investment (Penanaman Modal Asing/PMA) companies, PEs, subsidiaries of foreign companies, taxpayers listed overseas, and taxpayers presenting their financial statements in their functional currency of USD in accordance with the Financial Accounting Standards (Standar Akuntansi Keuangan/SAK) applicable in Indonesia can maintain their books in USD and compose them in English. A collective investment contract (Kontrak Investasi Kolektif/KIK) is allowed to use USD accounting to the extent that it issues USD-denominated investment funds.
The use of a foreign language other than English and a foreign currency other than USD in a company’s books is prohibited. Irrespective of the currency and the language used, companies typically have to settle their tax liabilities in Rupiah (except for PSC companies) and file tax returns in Indonesian. For corporate income tax, the assertions must be presented in USD side by side with Rupiah in the annual CITR.
A company that has obtained approval to maintain USD accounting may return to Rupiah accounting subject to DGT approval. Once approval is granted, the company may not reapply for USD accounting approval during the five years after the cancellation of the USD accounting.
Indonesia uses a self-assessment system under which taxpayers are required to calculate, pay, and report their tax liabilities in accordance with prevailing tax laws and regulations. The DGT may then conduct a tax audit to test this self-assessment compliance with the tax obligations and issue tax assessment as a result of tax audit.
Conditions Triggering a Tax Audit
A tax refund request will always trigger a tax audit. Due to the requirement for the DGT to decide on a refund request within 12 months, a tax audit will typically begin from a few weeks to several months from the refund request date. A corporate income tax refund request will normally trigger a complete tax audit covering all taxes. A refund request of any other tax will normally trigger a tax audit covering only one particular tax. The DGT will likely broaden the tax audit scope to include other taxes.
Other than that event, DGT may also set other criteria to select tax audit target based on risk analysis.
Taxpayers being audited are required to provide documents and information requested by the tax auditors within a month of the request date. Failure to provide the documents or information within a month may prompt the DGT to determine the tax liabilities on a deemed profit basis. Where documents and information are not supplied within the one month period, they cannot be used later by the taxpayer to dispute the amount of tax assessed.
At the end of a tax audit, the tax auditors will provide the taxpayer with a written notification of the tax audit findings to which the taxpayer must respond in writing if there is a disagreement. The taxpayer may then reassert its position with regard to the tax audit corrections and present the relevant supporting documents in the closing conference discussion.
If there is still a dispute surrounding a legal basis of an adjustment during the discussion of the tax audit findings, the taxpayer may request a discussion with the Quality Assurance Team (QAT) appointed by the Regional Tax Office or the Directorate of Tax Audit and Collection.
The results of the final discussion are then summarized in a closing conference document that is signed by the tax auditors and the taxpayer. The taxpayer will have to state Agree or Disagree to each of the proposed corrections in the document. The corrections agreed to in the closing conference document will constitute a basis for the minimum amount the taxpayer must pay of the tax assessment issued based on the document.
Products of a Tax Audit
The legal products of a tax audit consist mainly of Tax Assessment Letters (Surat Ketetapan Pajak/SKP) as mentioned above and Tax Collection Letters (Surat Tagihan Pajak/STP), which must be based on the closing conference document.
Types of Tax Assessment Letters
The name of a tax assessment letter refers to the resulting balance between the tax due and the tax credits. Accordingly, there are three types of tax assessment letters:
- Overpaid Tax Assessment Letter (Surat Ketetapan Pajak Lebih Bayar/SKPLB) if the tax due is less than the tax credit amount;
- Underpaid Tax Assessment Letter (Surat Ketetapan Pajak Kurang Bayar/SKPKB) if the tax due exceeds the tax credit amount;
- Nil Tax Assessment Letter (Surat Ketetapan Pajak Nihil/SKPN) if the tax due amount is equal to the tax credit amount.
If an SKPKB is issued, this may include one of the following administrative penalties:
- Interest based on the applicable MoF Interest Rate plus surcharge for a maximum of 24 months;
- A 50% surcharge for income tax liability;
- A 100% surcharge for withholding tax liability;
- A 100% surcharge for VAT and LST liabilities.
Tax Collection Using Distress Warrant
If a legal tax collection instrument is not paid within the required time, the DGT may by law issue a Distress Warrant (Surat Paksa) to a taxpayer. The instruments include the following documents:
- Tax Collection Letters/STP;
- Underpaid Tax Assessment Letters/SKPKB;
- Additional Underpaid Tax Assessment Letters/SKPKBT;
- Tax Objection Decision Letters (which demand an additional payment from the taxpayer);
- Tax Court Decisions (which demand an additional payment from the taxpayer);
- Correction Decision Letters (which demand an additional payment from the taxpayer).
Tax Dispute and Resolution
A tax dispute between a taxpayer and the DGT will typically arise following the issuance of a tax assessment letter (SKP) by the DGT which the taxpayer disputes. An SKPKB, an SKPKBT, and an STP constitute legal tax collection instruments on the basis of which the DGT may issue a Distress Warrant if the taxpayer fails to settle the underpaid tax on time. The way the DGT executes the Distress Warrant may give rise to another tax dispute between the parties.
The ways available to resolve such tax disputes are as follows:
A taxpayer who does not agree with a tax assessment letter can submit an Objection (Keberatan) to the DGT within three months of the date of issue of the assessment letter.
The DGT has to issue a decision on the tax Objection within 12 months of the filing date of the Objection. If no decision is issued by the DGT within 12 months, the objection is automatically deemed approved by the DGT.
If the objection is rejected by the DGT, any underpayment is subject to a surcharge of 50%. However, the underpaid tax and the surcharge are not payable if the taxpayer files an appeal with the tax court in respect of the objection decision.
A taxpayer who does not accept the DGT’s Objection decision can file an Appeal (Banding) with the Tax Court within three months of the receipt of the DGT Objection. To the extent that the DGT Objection Decision calls for a payment of tax due, according to the Tax Court Law, at least 50% of the tax due must be settled before filing the Appeal.
The Tax Court will typically have to decide on an Appeal within 12 months. Any underpaid tax resulting from the tax court decision is subject to a surcharge of 100%.
Other Avenues for Tax Dispute Resolution
The DGT, following a taxpayer’s Correction Request, or by virtue of its official position (ex-officio), may correct or cancel a tax assessment letter, an STP, or their derivatives issued on the basis of those letters. The derivatives include, among others:
- Objection Decision Letters;
- Decision Letters on the Reduction or Cancellation of Administrative Sanctions;
- Decision Letters on the Reduction or Cancellation of Tax Assessment;
- Decision Letters on an Early Refund of Overpaid Tax.
The DGT must issue a decision on a Correction Request within six months of the date of filing. If no decision is issued by the DGT within six months, the Correction Request is automatically deemed to have been approved by the DGT.
Taxpayers who do not (fully) accept the DGT Decision on a Correction Request can file a lawsuit (Gugatan) with the Tax Court within 30 days of the receipt of the DGT decision. A lawsuit against the DGT can also be filed with the Tax Court for the execution of Distress Warrant. In this case, the lawsuit must be filed no later than 14 days after the execution date.
The Tax Court must decide on a lawsuit within six months.
Judicial Review Requests to the Supreme Court
A Tax Court Decision is considered to be a final decision with full legal force. However, the parties involved in a tax dispute may file a Judicial Review Request (Peninjauan Kembali/PK) on a Tax Court Decision with the Supreme Court. This can be done only if any of the following conditions prevail:
- The Decision has been based on a perjury, a deception, or false evidence on the part of the opposing party;
- A piece of important written evidence is found which, had it been considered previously, would have led to a different Decision;
- Some part of the claim has been ignored without reason;
- Something which was not demanded was granted;
- The Decision is clearly inconsistent with prevailing tax regulations.
A Judicial Review Request must be filed with the Supreme Court within an allowable request time limit. For conditions 1 and 2, the time limit is three months after the condition is identified. For conditions 3, 4 and 5, the time limit is three months after the Tax Court decision.
Double Taxation Agreements
Indonesia’s Double Taxation Agreements (DTAs/tax treaties) provide for tax benefits in the form of withholding tax exemptions for service fees and for reduced withholding tax rates on dividends, interest, royalties and branch profits received by tax residents of its treaty partners. Tax exemption on service fees is typically granted only if the foreign party earning the income does not have a PE in Indonesia.
To claim the reduced rates, the foreign party must, at a minimum, present its Certificate of Domicile (CoD) to the ITO through the Indonesian party paying the income. Without this document, either in the form prescribed by the DGT or in the form of the treaty partner country (subject to certain conditions), the party is not entitled to the tax benefit and tax is withheld at a rate of 20%.
The withholding tax rates applicable under tax treaties are summarised below:
|No.||Dividends (Portfolio)||Dividends (Substansial Holdings)||Interest||Royalties||Branch Profit Tax|
|40||Papua New Guinea||15%||15%||10/0%||10%||15%|
|65||United Arab Emirates||10%||10%||5/0%||5%||5%|
|67||United States of America||15%||10%||10/0%||10%||10%|
Mutual Administrative Assistance in Tax Matters
Indonesia signed the Convention on Mutual Administrative Assistance in Tax Matters on 3 November 2011 and ratified it on 17 October 2014. Indonesia has also signed Multilateral Competent Authority Agreements on the automatic exchange of:
- Financial Account Information using the Common Reporting Standard; and
- Transfer Pricing documentation in the form of Countryby-Country Report.
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
Indonesia signed and ratified the Multilateral Instrument on 7 June 2017 and 12 November 2019 respectively. In this ratified document, Indonesia has put 47 tax treaties to be covered by the Convention.
This MLI has entered into force on 1 August 2020. Indonesia has submitted notification to OECD (as the depositary of the MLI) to confirm the completion of internal procedures for the tax treaty on 26 November 2020.