Tax Update January 2018
In 2015, Ministry of Finance has issued a regulation No. PMK-169/PMK.010/2015 (“PMK-169”) to regulate the debt to equity ratio of 4:1 for the calculation of Income Tax. If the debt to equity ratio exceeds the ratio of 4:1, the interest expense can be deductible limited to the maximum ratio of 4:1.
Recently, the Directorate General of Tax has issued a regulation No. 25/PJ/2017 (“PER-25”) as the implementation for determining the debt to equity ratio for calculating the Income Tax and reporting procedures for foreign private debt.
Indonesian Transfer Pricing Documents Guideline
SSJK Consulting has published the Indonesian Transfer Pricing Documents Guideline based on the Ministry of Finance Regulation No. 213/PMK.03/2016. Under this regulation, every taxpayer who has related party transaction should prepare 3 tiered Transfer Pricing Documentation, i.e. Master File, Local File, and Country by Country Reporting (CbCR).
Tax Update December 2017
Directorate General of Tax Regulation has issued a regulation No. 18/PJ/2017 (“PER-18") regarding verification procedures of the Income Tax payment for the income on transfer of land and/or building, and the Agreement for Sale Purchase of Land and/or Building (PPJB). According to PER-18, the Tax Office will perform Formal and Material Verification to verify the payment of this income tax.