Procedures of Tax Examination Abroad for Exchange of Information

On 27 January 2020, the Director General of Taxes (“DGT”) issued a regulation No. PER-02/PJ/2020 regarding the Procedures of Tax Examination Abroad for the Exchange of Information Based on International Agreements.

Tax Examination Abroad (“TEA”) is the presence of a representative of the Directorate General of Taxes (DGT) for the purpose of searching for and/or gathering information carried out by the tax authority of the partner jurisdiction or vice versa based on both parties’ agreement. Thus, the DGT has the authority to carry out reciprocal TEA with partner jurisdictions and this TEA is coordinated by the Director of International Taxation.

The TEA includes overseas TEA and domestic TEA. Overseas TEA is carried out based on a request from the head of the unit within the DGT to the Director of International Taxation. A request is made for a TEA to be conducted on a taxpayer, in which TEA is performed on examination activities, the examination of preliminary evidence, or investigation of tax crime in violation of said taxpayer’s tax obligations. In addition, the request may be submitted if there is significant potential tax revenue.

On the other hand, domestic TEA is carried out based on requests from authorized officials in partner jurisdictions to the DGT’s Director of International Taxation.