BERITA TERKINI
JAKARTA, DDTCNews - Corporate taxpayers constituting part of multinational enterprise (MNE) groups with a turnover of a minimum of EUR750 million in at least 2 of the 4 years prior to 2025 need to prepare to comply with the global minimum tax provisions pursuant to MoF Reg. 136/2024.
Although the obligation to pay the top-up tax for the 2025 tax year will only arise in the 2026 tax year, and reporting obligations related to the global minimum tax will only arise in June 2027, taxpayers need to start preparing now. These preparation points were outlined by the Director of DDTC Fiscal Research & Advisory, B. Bawono Kristiaji.
First, taxpayers need to conduct company internal capacity building. In this regard, taxpayers need to study MoF Reg. 136/2024 as well as documents related to the global minimum tax issued by the Organisation for Economic Co-operation and Development (OECD).
“Should we study the GloBE Model Rules? Ideally, yes. However, there’s more to it,” Bawono said during the DDTC Exclusive Gathering: Addressing Tax Challenges, Optimizing Business in 2025 on Wednesday (26/2/2025).
In addition to the GloBE Model Rules, relevant OECD documents include the commentary on the GloBE model rules, examples, agreed administrative guidance, the GloBE information return as well as safe harbours and penalty relief.
The GloBE-related documents issued by the OECD play a pivotal role, considering that Article 72 of MoF Reg. 136/2024 stipulates that the provisions on the global minimum tax must be interpreted consistently with the GloBE rules.
Second, taxpayers need to coordinate with the parent entity, affiliates in Indonesia and controlled entities. Such coordination is necessary because the effective tax rate and top-up tax are calculated on a jurisdictional basis rather than per entity.
“If, for example, there are 4 entities in Indonesia, what we apply is jurisdictional blending. What matters is the effective tax rate of all entities within Indonesia,” Bawono explained.
Third, taxpayers need to gather the financial data required to calculate GloBE income. This is necessary considering that GloBE income/loss is derived from financial accounting net income adjusted in line with Article 20 of MoF Reg. 136/2024.
These adjustments include general adjustments, elective adjustments, and specific adjustments.
“The required data may not be easily extracted from financial statements or the company’s ERP system,” Bawono claimed.
In addition to financial data, taxpayers also need to review the master file and country-by-country reporting (CbCR) to identify the group structure and the taxpayer’s position within the group.
Fourth, taxpayers need to conduct simulations of the effective tax rate and top-up tax calculations under the provisions on the global minimum tax, for example, using financial data from the 2024 tax year or the 2025 budget.
“The simulation results will determine whether there will be a top-up tax and whether the entity falls within the scope. Without early simulation, by 2026, we risk being unprepared and lacking reliable information,” Bawono added.
Fifth, taxpayers need to mitigate risks arising from the implementation of the global minimum tax from an early stage.
“MoF Reg. 136/2024 will have implications, namely whether it only increases compliance costs through reporting or also results in the imposition of the top-up tax,” he further remarked.
In addition to these 5 preparatory steps, there are also five conditions that require particular attention from taxpayers, specifically in relation to MoF Reg. 136/2024.
First, special attention is required if the taxpayer constitutes the ultimate parent entity (UPE), given its obligation to prepare the GloBE information return (GIR).
Second, attention is also required if the taxpayer is not a UPE but fulfils the criteria to prepare and file the GIR.
Third, special attention of MoF Reg. 136/2024 is needed if the taxpayer or its affiliates in Indonesia are applying for tax incentives, have obtained incentives but have not yet started commercial production, or have already utilised such incentives and have started commercial operations.
This is because tax incentives may be affected by the GloBE rules, potentially resulting in the top-up tax if not properly mitigated.
Fourth, taxpayers engaging in substantial controlled transactions must also pay close attention to MoF Reg. 13y/24, as the arm’s length principle, intra-group financing and controlled foreign company (CFC) rules may affect the effective tax rate calculation.
Fifth, taxpayers that are undergoing or have undertaken business restructuring within the past 3 to 4 years should also focus on MoF Reg. 136/2024, as restructuring is specifically stipulated under MoF Reg. 136/2024. (sap)
