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

Whether it be due to a fragmented advisory market or a rise in M&A, Italy’s frenetic hiring has not gone unnoticed by ITR’s Talent Tracker
The deal gives Azets 14 new partners and boosts its Swedish revenues to over $100 million; in other news, Svalner Atlas launched in Copenhagen
The tax technology company will be providing a free demonstration of its OTP software and offering best practice advice on whether to ‘buy or build’ on September 8
Johanes Glorinus Saragih of Indonesia’s Directorate General of Taxes outlines the nation’s delicate geopolitical situation, as it sits between a rock and a hard place with the US and pillar two
The law firm’s head of tax, trade and wealth management likens tax legislation to a complex puzzle, recommends a sturdy coffee mug, and explains why acronyms make tax cool
The global tax and accounting firm has appointed two experienced TP advisers from a New Jersey-based boutique
A lack of commitment from major jurisdictions and the associated compliance burden are obstacles facing the OECD initiative
Richard Gregg is no longer fit and proper to be a tax agent, said the TPB; in other news, MHA completed its acquisition of Baker Tilly South-East Europe
Recent Indian case law emphasises the importance of economic substance over mere legal form in evaluating tax implications, say authors from Khaitan & Co
PepsiCo was represented by PwC, while the ATO was advised by MinterEllison, an Australian-headquartered law firm
Gift this article