Indonesia: Forging Plans – New Provisions on Country-by-Country Report

​Published on May 2, 2018

The Director General of Tax (DGT) issued Regulation No. PER 29/PJ/2017 (PER-29), stipulating more detailed provisions with regard to the implementation of CbCR in Indonesia. This is in accordance with Indonesia's commitment to OECD BEPS Action 13, and the corresponding local regulation which has been issued on 31st December 2016, commonly known as PMK-213 regarding Transfer Pricing Documentation.

Certain information of the business group need to be disclosed in the CbCR, including global allocation of income, business and economic activity as well as taxes paid – all of these to be reported in a standardized template.

The newly-issued regulation introduces the term of Constituent Entities, along with Parent Entity and Subsidiaries. Constituent Entities are defined as any entities, covering both Parent Entity and all Subsidiaries, which are included in the CbCR. A Constituent Entity is required to prepare, maintain, and submit CbCR to its local tax authority on behalf of the Group, in case it meets certain requirements within its tax jurisdiction.

The CbCR will be automatically exchanged among tax jurisdictions who have signed a Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information. Indonesia itself has signed the agreement on 26th January 2017, and intends to put it into effect as of September 2018.

Parent Entity

• Directly or indirectly controls or owns one or more Constituent Entities in a Group; 
• Is required to prepare consolidated financial statements of a Group based on accounting standards or provisions applicable in its jurisdiction;
• Is not directly or indirectly owned by other Constituent Entities of a Group, or is owned by other entities, but these other entities are not required to conduct consolidated financial statements;
• Has a current year consolidated gross turnover of at least IDR 11 trillion for an Indonesian Parent Entity, or of 750 million EUR as an equivalent for an offshore Parent Entity, determined as of 1st January 2015, provided the jurisdiction of the Parent Entity does not oblige to submit CbCR anyway, or stipulates a different predetermined threshold.

Indonesian Subsidiaries

1. Separate entity of an MNE Group which is included in the consolidated financial statements of the business group;
2. Separate entity of an MNE Group which is not included in the consolidated financial statements of the business group, merely based on its size or materiality position;
3. Permanent Establishment (PE) of any separate entity as mentioned in point (1) or (2), in case it has separate financial statements for reporting, regulatory, tax, management, and control purposes.

Obligations to Submit CbCR

• does not demand for the submission of a CbCR; 
• has no Exchange of Information (EoI) agreement with Indonesia;
• has an EoI agreement with Indonesia, but certain conditions preventing it from obtaining the CbCR.