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DDTC Tax Newsletter 02  I  Jan 2018

          An Update on CbC Reporting

          Regulations in Indonesia

                                                               Clarification on the definition of
            On 16 January 2018, the Directorate General of Tax
                                                               “Parent Entity”
          (“DGT”) released DGT Regulation No. 29/PJ./2017 (“PER-
          29”), although the regulation is dated on  29 December
          2017. It has been approximately a year since the release
                                                                  In addition to the other criteria of “parent entity” in
          of  MoF-213 that  the CbC Reporing implementing
                                                               MoF-213, PER-29 adds that a parent entity is an entity
          regulation is finally published by the DGT through PER-
                                                               that is not owned directly or indirectly by another entity
          29. Nevertheless, PER-29 has succeeded  in providing
                                                               in the group or is owned directly or indirectly by another
          much clarity  to the implementation  of CbC  Reporting
                                                               entity, however  the said other  entity is no required to
          requirement  that  has  not  been  clarified  sufficiently
                                                               consolidate its financial statements.
          yet in MoF-213.  As  part of  Indonesia’s commitment to
          the implementation of  the standard, the Ministry of    The criteria of “parent  entity”  is important  as this
          Finance released on 30 December  2016,  Minister of   will  determine  the  obligation  to  prepare  and  file  an
          Finance Regulation  No.  PMK-213/PMK.03/2016  (“MoF   CbC Report,  namely those “parent  entities”  that  have
          213/2016”),  the much-anticipated regulations  on CbC   a consolidated revenue more than IDR 11 trillion or an
          reporting and its corresponding  updates to transfer   equivalent to EUR 750 million. While domestic taxpayers
          pricing documentation  requirements. MoF 213/2016    that are member entities of a multinational group, whose
          brings clarity to the transfer pricing documentation legal   “parent entity” is located offshore, are only obliged to file
          framework.  Previously,  transfer pricing documentation   a CbC Report domestically in Indonesia if the said parent
          requirements are only regulated by way of Directorate   entity is located in a jurisdiction that does not require
          General  of Tax  (“DGT”)  Regulations,  which is not   CbC Reporting, or does have a exchange of information
          mandated directly by the Law.                        agreement with Indonesia,  or  have CbC  Reporting
                                                               requirement and a exchange of information agreement
            In general,  PER-29  has  brought the Indonesia    but effectively the CbC Report unobtainable by the DGT.
          CbC Reporting requirements more in line  with  the
          international standard  as issued  by the OECD  in BEPS
          Action 13. The following are salient features of PER-29.
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