BERITA TERKINI
JAKARTA, DDTCNews - The implementation of the global minimum tax or formally known as the Global Anti-Base Erosion (GloBE), in Indonesia pursuant to the Minister of Finance Regulation (MoF Reg.) 136/2024 must be accompanied by efforts to strengthen legal certainty.
Director of Fiscal Research and Advisory of DDTC, B. Bawono Kristiaji, emphasized that legal certainty can be achieved by intensifying capacity-building initiatives, both for taxpayers and within the tax authority itself. This is crucial to minimize mismatches in understanding between the authority and taxpayers.
“In practice, tax authorities with stronger capacity building must be able to explain these rules effectively and in alignment with the GloBE framework,” he stated during Ngonten Fiskal: Becoming Acquainted with the Global Minimum Tax, hosted by the Fiscal Policy Agency (Badan Kebijakan Fiskal/BKF in Indonesian) on Wednesday (22/1/2025).
Although MoF Reg. 136/2024 consists of only 74 articles, it remains difficult for taxpayers to comprehend due to the extensive use of technical terminology and complex provisions.
According to Bawono, the introduction of the GloBE rules requires taxpayers to enhance their understanding of international taxation as well as the interaction between commercial accounting and tax accounting.
Ensuring that the provisions on the global minimum tax under MoF Reg. 136/2024 applied in Indonesia align with the GloBE rules, he noted, will ultimately provide greater legal certainty for taxpayers.
“Ultimately, disputes and compliance costs can be reduced. This is a new regime where all parties must adapt. We certainly expect both the government and taxpayers to upgrade their capacity to enable us to operate on a level playing field,” he added.
Beyond implementation, Indonesia is also encouraged to evaluate its existing tax incentives and consider adopting incentives that are compatible with the global minimum tax framework.
“There are several recommended incentives. This has already been applied in Singapore with the introduction of the qualified refundable tax credit (QRTC). The question is whether Indonesia will adopt a similar approach or continue with existing schemes, such as allowances with extended timelines. This is the right moment to discuss how to maintain competitiveness amidst the global minimum tax,” Bawono explained.
Further, corporate taxpayers that constitute part of in-scope multinational enterprise groups must coordinate closely with their group entities and ultimate parent entity (UPE).
Such coordination is necessary given the new reporting requirements under the global minimum tax regime, including the GloBE Information Return (GIR), the annual GloBE income tax return, the domestic minimum top-up tax (DMTT) return and the undertaxed payment rule (UTPR) income tax return.
“When should these be prepared? This is something that must be anticipated early. This implies that, on account of MoF Reg. 136/2024, Indonesia has entered what can be considered a new tax regime. This serves as a wake-up call for all multinational enterprises in Indonesia. They must begin to understand these rules and coordinate with their groups or parent entities. It is highly technical and challenging,” Bawono added.
On another note, Indonesia has officially adopted the global minimum tax regime this year. Under this framework, Indonesia is authorised to impose a minimum effective tax rate of 15% on the profits of constituent entities within in-scope multinational enterprise groups.
A multinational enterprise group falls within the scope of the global minimum tax if it records annual consolidated revenue of a minimum of €750 million in a minimum of 2 of the 4 years preceding the year in which the global minimum tax is imposed. (rig)
