New regulations provide updates and clarifications to the temporary tax amnesty program, including procedures for the repatriation of offshore assets.
Indonesia’s Minister of Finance and the Directorate General of Taxes have issued several regulations that provide updates and clarifications to the July 2016 tax amnesty law and its implementing regulations.
Under the tax amnesty, taxpayers can report their undisclosed assets from fiscal years ending on or before 31 December 2015 and pay a special tariff on the net assets, rather than the unpaid taxes and penalties that otherwise would apply. The amnesty is available for the period from 1 July 2016 to 31 March 2017, with the tariff rate based on the type of assets (onshore assets, offshore assets repatriated or offshore assets not repatriated) and when they are reported to the Indonesian tax office during the amnesty period.
The new regulations cover the following topics:
- The implementation of the tax amnesty, including procedural matters relating to the documentation and reporting requirements;
- The tax amnesty provisions for taxpayers that own assets indirectly through special purpose vehicles;
- The policy on investigations in the framework of the tax amnesty, including instructions to tax officials not to commence investigations between the issuance of the regulations (22 August 2016) and the end of the tax amnesty, unless there are strong indications of criminal tax acts in relation to specified matters;
- The policy on tax audits during the amnesty period, including instructions to tax officials that audits for the period or fiscal year 2015 (or part thereof) should be initiated only in specified cases;
- The refund of an overpayment in relation to the tax amnesty; and
- The procedures for the repatriation of assets to be placed in investments in financial or nonfinancial assets.