• Changes in Administrative Requirements in relation to Certificate of Domicile for Foreign Taxpayers
Newsletter:

Changes in Administrative Requirements in relation to Certificate of Domicile for Foreign Taxpayers

22 August 2017

The Indonesian Director General of Tax (DGT) has recently issued a new regulation in relation to Certificate of Domicile (CoD) for foreign taxpayers. The new regulation No. PER-10/PJ/2017 (PER-10) regarding administrative requirements for Double Taxation Agreement (DTA) and CoD has come into effect as of 1 August 2017 to revoke the following DGT regulations:

  1. Regulation No. PER-61/PJ/2009 as amended by Regulation No. PER-24/PJ/2010; and
  2. Regulation No. PER-62/PJ/2009 as amended by Regulation No. PER-25/PJ/2010.

Regulatory Update

DGT PER-10 specifies new administrative requirements that foreign taxpayers must comply with in order to enjoy tax treaty benefits:

  • The administrative requirements of the CoD in the format of DGT-1 and DGT-2 forms for different types of entities remain unchanged. However, PER-10 states that there is a maximum validity of 12 months since the date of issuance of CoD. In addition to that, the CoD now also discloses its validity period.

 

  • The new administrative disclosure requirements for DGT-1 and DGT-2 forms are reflected in the attachment of this page.

 

Other Relevant Information

  • Certificate of Residence (CoR), does not replace DGT-1 Form or DGT-2 Form. In the case of foreign taxpayers using the CoR, they are no longer required to complete Part III of DGT-1 Form or Part III of DGT-2 Form (if required to complete either one of the form). The rest of the sections in the Forms are to be completed.

 

  • CoD must be submitted together with the relevant monthly tax returns when it is due and it can be submitted in an electronic format.

 

  • A refund request can be submitted if there has been an excess in withholding tax amounts (if there is a delay in the completion of CoD or if there has been an incorrect application of the tax refund).

 

  • PER-10 confirms that if a foreign taxpayer receives an income from Indonesia but has not benefited from the DTA and the Tax Withholder has failed to remit the withholding tax by not submitting a monthly tax return in relation to the income period, then the non-resident taxpayer can still obtain the treaty benefits through the Mutual Agreement Procedure.

 

Implications to Foreign Taxpayers

  • Foreign taxpayers that are required to complete DGT-1 & DGT-2 forms will have additional disclosure requirements (per the diagram).

 

  • Transitional arrangement applies for any existing CoD that has previously been approved by the DGT. Those CoD’s will still be valid until the expiry date.

 

Contact us

For more information, please contact our technical team at corsec.helpdesk@bdo.co.id

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Jakarta 12910, INDONESIA

Tel: +62-21 5795 7300

Fax: +62-21 5795 7301

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