• COUNTRY-BY-COUNTRY REPORT (CbCR) MANAGEMENT PROCEDURES ACCORDING TO PER-29/PJ/2017
Newsletter:

COUNTRY-BY-COUNTRY REPORT (CbCR) MANAGEMENT PROCEDURES ACCORDING TO PER-29/PJ/2017

24 January 2018

According to PER-29, applicable taxpayers performing business in Indonesia are obligated to prepare and/or submit Country-by-Country Report (CbCR) along with CbCR Notification. A local parent entity of a business group performing transaction with related parties, or a constituent entity whose parent entity is a foreign tax subject are the applicable taxpayers under the new regulation.

A “constituent entity” defined in PER-29 is a member of multinational business group included in consolidated financial statements of the parent entity in foreign jurisdiction. There are four categories of taxpayers defined in PER-29 required to prepare and/or submit CbCR.

Taxpayers Obligated to Prepare CbCR

Criteria of taxpayers required to prepare and submit CbCR are as follows.

  • Local parent entity with consolidated gross revenue in one tax year of at least 11 trillion IDR.
  • Foreign parent entity with consolidated gross revenue in one tax year of at least 750 million EUR whose constituent entity operates in Indonesia.
  • Local constituent entity whose parent entity is not required to prepare CbCR in its jurisdiction while being applicable to PER-29.

Surrogate Entity Obligated to Submit CbCR

Surrogate entity is the member of multinational business group appointed officially by foreign parent entity that is applicable to PER-29. Surrogate entity is obligated to prepare CbCR as the substitute of its parent entity.

The applicable surrogate entity is a foreign constituent entity of multinational business group operating in jurisdiction where there is Qualifying Competent Authority Agreement (QCAA) in place and the CbCR can be easily obtained by Indonesia tax authority.

Taxpayers Obligated to Submit CbCR

There are conditions when local constituent entity is required to submit CbCR prepared by its foreign parent entity.

  • The country where its parent entity operates requires the preparation of CbCR, however there is no QCAA in place.
  • Exchange of CbCR between the two tax authorities was unsuccessful.

Taxpayers Not Obligated to Submit CbCR

There are some exceptions for certain taxpayers relieved from their obligation to submit CbCR.

  • Taxpayers with consolidated gross revenue less than 11 trillion IDR for local parent entity or less than 750 million EUR for foreign parent entity.
  • Foreign parent entity that have fulfilled PER-29 requirements, by successfully exchanging CbCR from its jurisdiction to Indonesia tax authority, dismisses its local constituent entity’s obligation to submit CbCR.
  • Foreign parent entity which some of its constituent entities operate in Indonesia, could appoint one of its local constituent entities to submit CbCR, dismissing the obligation of other local constituent entities.

In general, local parent entity and local constituent entity are required to submit CbCR Notification. CbCR Notification Form can be submitted online through Directorate General of Taxation (DGT) website. PER-29 requires the submission of CbCR to be conducted electronically with Extensible Markup Language (XML) to facilitate automatic exchange of information between countries.

“BDO INDONESIA PROVIDES A FULL SPECTRUM OF TAX AND BUSINESS ADVISORY SERVICES TO LOCAL ENTERPRISES, PUBLIC-LISTED COMPANIES, MULTI-NATIONAL COMPANIES AND INDIVIDUALS.”

 

For more information on how PT BDO Bisnis Solusi Indonesia can help you in planning and navigate
these major changes, please contact our experts:

IRWAN KUSUMANTO

Head of Tax BDO Indonesia

ikusumanto@bdo.co.id

 

PRASETYONO HENDRIARTO

Head of Transfer Pricing

phendriarto@bdo.co.id

 

Prasetyono Hendriarto , Executive Director |