Indonesia: Indonesia updates Asian treaty network; issues foreign customers’ exchange of information for financial institutions

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: Indonesia updates Asian treaty network; issues foreign customers’ exchange of information for financial institutions

Karyadi-Freddy
Tanuwijaya

Freddy Karyadi

Chaterine Tanuwijaya

The Government of Indonesia, through Presidential Regulation No. 5 of 2016 effective January 12 2016, has ratified the 'Protocol to the Agreement for the Government of the Republic of Indonesia and the Government of the People's Republic of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income' (Indonesia – China DTA).

The treaty was signed on March 26 2015. This protocol provides that aviational operation in the international traffic of the other state will be exempted from value added tax (VAT) or other similar taxes in that other state.

The government also ratified the protocol to the DTA with India by issuing Presidential Regulation No. 6 of 2016 effective January 12 2016. Among others, it contains the provision of exchange of information for tax and banking details, as well as assistance in handling outstanding tax. It is also stated that if a resident of one state has a representative office in another state, the profit of such representative office will be taxed according to the prevailing tax tariff applicable in such other state, but not more than 15%.

Earlier in December 2015, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan – OJK) issued Regulation No.25/POJK.03/2015 dated December 11 2015 on Exchange of Information for Foreign Customers related to Tax to Partner Countries/Jurisdictions. Certain financial institutions (FIs) in Indonesia will automatically exchange information to partner countries/jurisdictions, pursuant to the agreements on exchange of information including tax treaties. FIs should submit a report to the Indonesian tax authorities or to the OJK regarding information on its foreign customers, which will be forwarded to the tax authorities in the partner countries/jurisdictions. The implementation will further be regulated in a circular letter to be issued by OJK.

Freddy Karyadi (fkaryadi@abnrlaw.com) and Chaterine Tanuwijaya (ctanuwijaya@abnrlaw.com), Jakarta

Ali Budiardjo, Nugroho, Reksodiputro, Counsellors at Law

Tel: +62 021 250 5125

Website: www.abnrlaw.com

more across site & shared bottom lb ros

More from across our site

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
Winning the case against the 20% VAT imposition was always going to be an uphill challenge for the claimants, UK tax advisers argue
A ‘paradigm shift’ in Chile’s tax enforcement requires compliance architecture built on proactive governance, strategic documentation and active monitoring of judicial developments
Gift this article