Administrative Changes on Indonesian DGT Form to Enjoy Tax Treaty Benefit

The Indonesian Minister of Finance (MoF) Regulation No. 112 Year 2025 (MoF 112/2025), regarding the procedures for the Implementation of Double Taxation Avoidance Agreements (DTAA or Tax Treaty) takes into effect starting from December 30^th, 2025. The application of a tax treaty may entitle non-Indonesian taxpayers to benefit from reduced withholding tax rates or tax exemption, provided and supported by Certificate of Domicile (CoD) declaration through the Indonesian Directorate General of Tax (DGT) Form along with the CoD issued by the respective local tax authority of the non-Indonesian taxpayers.

Following the enactment of MoF 112/2025, below are the following key points:

Requirements of non-Indonesian taxpayers eligible for tax treaty benefits are as follow:

Not registered as an Indonesian resident taxpayer;
Recognized as a tax resident of a treaty partner country; and
Does not contempt in Tax Treaty abuse.

Strengthening of anti-abuse provisions under the Tax Treaty through various instruments, including:

Clarification of the beneficial owner concept to identify whether income recipient is the ultimate beneficial owner of the income;
Limitation of Benefits provisions to provide clarification on the eligibility for tax treaty benefits that is determined based on the criteria set out in the relevant Tax Treaty. The income recipient does not have the obligation to transfer more than 50% of the income to other parties;
Principal Purpose Test to ensure that Tax Treaty benefits are not granted for the purpose of a transaction or arrangement (including agreements, MOUs, schemes, or a series of transactions) that is merely to obtain tax treaty benefits, directly or indirectly; and
Prevention of tax avoidance through determination of Permanent Establishment status via commission arrangement, specific activity exemptions and splitting of contracts which include the definition of closely related persons with ownership percentage of more than 50% of share ownership under common control.

Changes in DGT Form format is summarized below:

Aspect	MoF No. 25 Year 2018	MoF No. 112 Year 2025
Simplification of the DGT Form	Consists of 7 (seven) sections.	Reduced to 6 (six) sections. Questions related to substance and beneficial ownership test of the income recipient in No. 12 to 16 are consolidated in Part V (previously in Part VI).
Change in Terminology	Double Taxation Convention format. The use of the term ‘Country’ for territory field related queries.	Double Taxation Agreement format. The use of the term ‘Country’ or ’Jurisdiction’ for territory related queries to accommodate tax jurisdictions that are not in the form of a fully sovereign country.
Tax Treaty Abuse	Not clearly stated.	Non-abusive declaration of tax treaty stated in the DGT Form with clearer indicators, including economic substance, legal form, assets, employees, active business activities and beneficial ownership.

The DGT Form must be submitted via the Indonesian company’s Coretax account. The Indonesian Tax Authority does not conduct an immediate review on the completeness of the submitted DGT Form. Accordingly, administrative completeness must be ensured when completing and reporting the DGT Form in order to comply with the prevailing Indonesian tax regulations.

How We Can Help You
Our tax team can support multinational groups and Indonesian withholding agents in assessing eligibility for tax treaty benefits under MoF 112/2025, including reviewing beneficial ownership, PPT, and LOB requirements. We also assist in ensuring accurate completion and submission of the updated DGT Form through Coretax, while advising on Permanent Establishment risks and documentation readiness to ensure compliance with Indonesian tax regulations.

Please contact us for further inquiry:
Irwan Kusumanto <ikusumanto@bdo.co.id>
Suwenny Leonardi <sleonardi@bdo.co.id>
Octa Surya Fatra <ofatra@bdo.co.id>