Indonesia updates double taxation avoidance regulations

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

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

AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Representatives from the two countries focused on TP as they met this week to evaluate progress under a previously signed agreement – it is understood
The UK accountancy firm’s transfer pricing lead tells ITR about his expat lifestyle, taking risks, and what makes tax cool
Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Gift this article