International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

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

Indonesia: Commencement of AEOI and priority target for tax audit

intl-updates-small.jpg

It has been reported that by the end of September 2018, the Directorate General of Tax (DGT) will commence the automatic exchange of information (AEOI) through the common transmission system (CTS). There are five types of data that are expected to be exchanged within the AEOI framework: (i) identity of bank account holder; (ii) bank account number; (iii) identity of financial institution; (iv) bank account balance; and (v) income deriving from the bank account (interest). Effective implementation of the AEOI may increase tax revenue, especially in terms of income tax. The DGT is authorised to utilise the collected data to evaluate taxpayers' compliance with their taxation obligations, including reporting requirements such as the submission of annual tax returns.

Separately, the DGT issued Circular Letter No. SE-15/PJ/2018 (CR 15) concerning audit policy on August 13 2018, which principally stipulates detailed provisions on the subject, object, and procedures of a tax audit. CR 15 focuses on revitalising an audit process that is implemented by, among others, preparation of a compliance map and a list of priority targets of potential excavation (Daftar Sasaran Prioritas Penggalian Potensi, or DSP3) and a list of priority targets of audit (Daftar Sasaran Prioritas Pemeriksaan, or DSPP). DSP3 is a list of taxpayers regarded as priority targets for potential excavation throughout the relevant year, whether in the form of supervision or audit. DSP3 serves as the basis of the relevant tax office in determining which taxpayers will be included in the DSPP.

CR 15 uses various variables to determine whether a taxpayer is shortlisted in DSP3 or not, including indication of a high level of non-compliance by a taxpayer (tax gap). The indicators of non-compliance are classified based on the type of taxpayer (corporate or individual) and the type of tax office the taxpayer is registered at (pratama or non-pratama tax office). In general, the indicators for corporate taxpayers include: (i) the existence of an intra-group transaction with a value of more than 50% of the total transaction value; (ii) the issuance of more than 25% of tax invoices to taxpayers whose taxation registration numbers begin with 000 in a tax period; (iii) non-audit on all taxes for the last three years; and/or (iv) results of the analysis of the information, data, report, and complaint (Informasi, Data, Laporan, dan Pengaduan, or IDLP) and/or Center for Tax Analysis (CTA). For individual taxpayers, the indicators include: (i) non-compliance of tax payment and submission of annual tax returns; (ii) non-audit on all taxes for the last three years; and/or (iii) results of analysis of IDLP and/or CTA.

more across site & bottom lb ros

More from across our site

Lawmakers have up to 120 days to decide the future of Brazil’s unique transfer pricing rules, but many taxpayers are wary of radical change.
Shell reports profits of £32.2 billion, prompting calls for higher taxes on energy companies, while the IMF has warned Australia to raise taxes to sustain public spending.
Governments now have the final OECD guidance on how to implement the 15% global minimum corporate tax rate.
The Indian company, which is contesting the bill, has a family connection to UK Prime Minister Rishi Sunak – whose government has just been hit by a tax scandal.
Developments included calls for tax reform in Malaysia and the US, concerns about the level of the VAT threshold in the UK, Ukraine’s preparations for EU accession, and more.
A steady stream of countries has announced steps towards implementing pillar two, but Korea has got there first. Ralph Cunningham finds out what tax executives should do next.
The BEPS Monitoring Group has found a rare point of agreement with business bodies advocating an EU-wide one-stop-shop for compliance under BEFIT.
Former PwC partner Peter-John Collins has been banned from serving as a tax agent in Australia, while Brazil reports its best-ever year of tax collection on record.
Industry groups are concerned about the shift away from the ALP towards formulary apportionment as part of a common consolidated corporate tax base across the EU.
The former tax official in Italy will take up her post in April.