QRTC in GMT Rules Will Reshape Tax Competition Landscape

JAKARTA, DDTCNews - The special treatment of qualified refundable tax credit (QRTC) under the global minimum tax (Global Anti-Base Erosion/GloBE rules) will effectively shift tax competition across jurisdictions—from one form to another.

Partner of DDTC Consulting, Yusuf Wangko Ngantung, explained that both QRTC and other tax incentives reduce the amount of tax payable by taxpayers. However, their impact on the calculation of the effective tax rate is fundamentally different.

“With QRTC, the minimum tax rate could still remain above 15%. There is a rather arbitrary threshold in determining whether a tax incentive is treated as a tax reduction or as additional income. That arbitrary threshold is what defines QRTC,” said Yusuf during an international seminar held by the International Fiscal Association (IFA) Indonesia Branch on Wednesday (December 3, 2025).

Under the GloBE rules, QRTC is defined as a refundable tax credit that is paid in cash or cash equivalents within four years after the constituent entity becomes eligible to receive the credit under the laws of the granting jurisdiction.

In calculating the effective tax rate, QRTC is treated as an addition to GloBE income, rather than as a reduction of covered taxes.

For a tax credit to qualify as QRTC, it must be granted based on specific activities or expenditures.

In addition, the value of the tax credit must be capable of exceeding the tax payable. If a tax credit is structured in such a way that it cannot exceed the tax liability, it will not be classified as a QRTC.

At least one neighboring country has already implemented QRTC—Singapore, through a tax incentive known as the refundable investment credit (RIC).

The RIC applies to taxpayers engaged in sectors such as manufacturing, green economy, and various service industries—not limited to research and development (R&D)-related expenditures.

Meanwhile, Thailand and Vietnam are reportedly preparing similar tax credit incentives that would meet the criteria of QRTC.

So, what about Indonesia? Yusuf encouraged the government to establish transitional provisions for taxpayers that have already benefited from tax holiday schemes.

This is necessary because tax holidays do not receive the same treatment as QRTC. “Many businesses currently benefiting from tax holidays will require specific provisions to transition into QRTC,” Yusuf concluded.