Spontaneous Exchange of Information

On 31 October 2018, the DGT issued regulation No.24/PJ/2018 (“PER-24”) regarding the Procedures of Spontaneous Exchange of Information in the Context of Implementing International Agreements. This regulation amends and revokes several Articles in DGT Regulation No.67/PJ/2009 (“PER-67”) regarding Procedures for Exchange of Information Based on Tax Treaties (DTA).

The spontaneous exchange of information (Spontaneous EOI) with the Partner Jurisdiction can be outbound and inbound. This EOI is proposed and carried out by the Director of International Taxation who liaises with the competent authority in the Partner Jurisdiction and shall be submitted in writing. The types of taxes involved in the EOI will cover Income Taxes, VAT, LGST and Land and Building Tax – depending on the corresponding EOI agreement.

The proposed information exchange should fulfill the following criteria:

  • There is an indication of significant potential tax loss in the Partner Jurisdiction;
  • There is a payment to the taxpayer in Partner Jurisdiction which is suspected as not having been reported in the Partner Jurisdiction;
  • There is a tax reduction or exemption in Indonesia received by the taxpayer of the Partner Jurisdiction which can increase its tax obligations therein;
  • There are business activities carried out between Indonesian taxpayers and taxpayers of the Partner Jurisdiction through one or more countries, that can reduce the tax payments in one or both countries; and/or
  • There is suspicion of tax erosion caused by a false profit transfer within a group.

PER-24 became effective as of 31 October 2018.

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