Indonesian Tax Amnesty Regulation in a brief
With reference to the release of tax amnesty law package (Law 11/2016, Ministry of Finance Reg 118-2016, DGT Director Reg 07-2016, DGT Circular Letter 30-2016 ). Tax payers (individuals and corporation) who apply for Tax Amnesty will be granted facilities, including termination of on-going tax audit, exemption for any administration penalty for any existing results of tax assesment/ tax audit/ objection/ appeal/ tax judicial review, and will be no tax audit/ assesment for previous years up to 2015. In exchange, tax payer is required to cancel any tax refund,objection/ appeal/ tax judicial review.
Tax amnesty law requires tax payers to declare asset’s owned by tax payer (not reported on the tax return) not included as in asset list in tax return 2015. Assets is categorized into 2 location (outside Indonesia or inside Indonesia), the location and plan of asset transfer into Indonesia or kept located on offshore will determine the amnesty law compensation payment, Compensation payment is using the rate (provided on below) multiply with the difference of net asset from the previously reported with newly declared net asset. There is a threshold of percentage of liabilities accepted in the calculation of net asset.
Ownership of asset
Legal ownership of asset issue is covered in this tax amnesty law i.e asset with another owner’s name/nominee is provided the facility to transfer its legal ownership. If the newly added asset is under the legal ownership of other name (using another person’s name), tax payer still can apply with requirement to transfer the legal ownership of the asset to tax payer’s name. The tax related to transfer of legal ownership shall be exempted.
Amnesty compensation payment rate
For asset in Indonesia or from offshore and transfer into Indonesia requires compensation rate 3% for declaration during the period up to 30 Sept 2016, 5% until 31 Dec 2016, and 5% until 31 March 2017. for assets For assets from offshore and not intended to transfer into Indonesia, the rate of payment is 4% – 30 Sept 2016, 6% until 31 Dec 2016, 10% until 31 March 2017.
TGS AU Partners – KAP Agus Ubaidillah & Rekan take no responsibility to the readers of using this single information to take any action/decision on taxation and other activities, a further analysis of the condition of your organization/personal tax shall be required.
TGS AU Partners tax team will be happy to assist your organization, review existing tax structure & exposure, provide advise and arrangement of the tax amnesty application.
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