Indonesia updates double taxation avoidance regulations

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Indonesia updates double taxation avoidance regulations

Sponsored by

sponsored-firms-gnv.png
AdobeStock_133597471_pots

Indonesia's Director General of Tax (DGT) issued Regulation No. PER-25/PJ/2018 (PER-25) on November 21 2018, simplifying the procedures concerning the implementation of the double taxation avoidance agreement.

PER-25 replaces previous Regulation No. PER – 10/PJ/2017.

PER-25 introduces a template and procedures related to the certificate of domicile (DGT form). It can be summarised as follows:

  • It must be submitted once within the period covered by the DGT form (no longer per month);

  • The DGT form is prepared by the offshore tax resident and submitted online by the Indonesian tax withholder, with receipt. The DGT form reporting receipt should be provided to the offshore tax resident;

  • The offshore tax resident will only be required to provide the receipt for the future transaction covered under the DGT form period to the Indonesian tax withholder;

  • The period covered is a maximum of 12 months, and may extend over the calendar year (e.g. August 2018 – July 2019).

  • The DGT form should be reported no later than the deadline of submitting the withholding tax (WHT) return for the period where the withholding is payable (which is normally on the 20th of the following payable period). For example, for a payable period of January 2019, the DGT form should be reported no later than the deadline of submitting the January 2019 WHT return (i.e. February 20 2019);

  • The Indonesian tax withholder is required to check the DGT form receipt provided by the offshore tax resident to the online system for its validity; and

  • Failure to provide a valid DGT form on time and fulfill the no tax treaty abuse condition will result in the Indonesian tax withholder having to withhold the tax using a normal tariff of 20%, instead of the tax treaty tariff which is normally lower than 20% (or even 0%).

PER-25 is effective from January 1 2019.

more across site & shared bottom lb ros

More from across our site

The ruling is ‘well-structured’ in its references to the OECD TP guidelines, one expert says, while another argues it overlooks key technical issues
India also brokered its first-ever multilateral APA last year, the Central Board of Taxes announced
A global tax framework may not materialise anytime soon, but a common set of principles is becoming increasingly necessary, Rudolf Winkenius also tells ITR
Kingsley Napley’s claimants are arguing that taxing the provision of education breaches the European Convention on Human Rights
While pillar two can progress without the US, it won’t reach the same heights without American involvement, argues Renáta Bláhová, founding partner of BMB Partners Taxand
There are unanswered questions as to how foreign investors could reclaim money via tax credits, advisers suggested
Amid an ever-changing tax environment, India’s advisory market is bustling with competition ahead of the 2025 World Tax rankings and ITR Awards
The deal comes after PwC had accused Paul McNab of using confidential information; in other news, McDermott hired a new London tax head from a US rival
Looking at transfer pricing simplification is “obviously helpful”, but it should be done in line with current standards, a senior government figure reportedly said
The UK Government’s plans to close the tax gap via increased HM Revenue and Customs investment have failed to impress local tax advisers
Gift this article