MoF Regulation No. 125/PMK.010/2015 dated July 7, 2015

AMENDMENT ON MINISTER OF FINANCE REGULATION NO. 60/PMK.03/2014 CONCERNING PROCEDURES FOR EXCHANGE OF INFORMATION

Article 1 number 2, 5 6 7 and 8 are amended and become as follow:

Article 1

1.    Law means law no 6 year 1983 concerning general taxation provision and procedures as amended several times and recently amended by law no. 16 year 2009 concerning stipulation of government regulation in lieu of law no. 5 year 2008 concerning fourth amendment on law no. 6 year 1983 concerning general taxation provision and procedures to become law.

2.    Partner country or jurisdiction means country or jurisdiction which bound to Indonesia Government in avoidance of double taxation agreement, tax information exchange agreement, convention on mutual administrative assistance in tax matters, multilateral or bilateral competent authority agreement, intergovernmental agreement or other multilateral or bilateral agreement.

3.    Avoidance of double taxation agreement subsequently will be referred as P3B means agreement between Indonesia government and partner country or jurisdiction in order to avoid double taxation and tax evasion.

4.    Tax information exchange agreement subsequently will be referred as TIEA means agreement between Indonesia government and partner country or jurisdiction to assist in tax administration through exchange of tax information.

5.    Convention on mutual administrative assistance in tax matters subsequently will be referred as convention means multilateral agreement or convention between Indonesia government and several partner countries or jurisdictions to assist in tax administration through exchange of tax information.

6.    Partner country or jurisdiction tax authority means tax authority in partner country or jurisdiction who has the authority to implement P3B, TIEA, convention, Multilateral or Bilateral Competent Authority Agreement, Intergovernmental Agreement/IGA or other bilateral or multilateral agreement.

7.    Data and/or information subsequently will be referred as information means collection of number, letter, word, image, oral information and/or written information in form of record (audio/visual/ audio visual), letter. Document, book, notes or other form, wither in printed or electronic, which may lead to any clue and/or information regarding an individual or corporate income sourced from job, independent job, business activity, capital and/or other sources, also information regarding assets including financial information owned by and/or kept by an individual and/or corporation, either belong to its own or other parties.

8.    Exchange of information (EOI) subsequently will be referred as EOI means exchange of information regarding taxation matters as implementation of P3B, TIES, convention, Multilateral or Bilateral Competent Authority Agreement, IGA or other bilateral or multilateral agreement to avoid tax avoidance, tax evasion and/or abuse of P3B by not rightful parties.

Article 2 paragraph 3 and 4 are amended and become as follow:

Article 2

1.    Director General of Taxation may conduct exchange of information with tax authority in partner country or jurisdiction.

2.    Exchange of information with tax authority in partner country or jurisdiction as mentioned in paragraph 1 will be handled by director of tax regulation II, who will act as competent authority in Indonesia.

3.    Exchange of information as mentioned in paragraph 2 will be implemented under provision in:

a.    P3B

b.    TIES

c.    Convention

d.    Multilateral or Bilateral Competent Authority Agreement

e.    IGA or

f.     Other bilateral or multilateral agreement.

4.    Exchange of information as mentioned in paragraph 2 will valid for P3B, TIES, convention, approval as competent authority in Multilateral or Bilateral Competent Authority Agreement, IGA or Other bilateral or multilateral agreement which effective before, since or after the effective date of this regulation.

Article 3 paragraph 2 is amended and become as follow:

Article 3

1.    Exchange of information as mentioned in article 2 covers the following:

a.    Exchange of information as request

b.    Exchange of information spontaneously and

c.    Exchange of information automatically

2.    Exchange of information as mentioned in paragraph 1 may be reciprocal in term information in or out of Indonesia.

3.    In Exchange of information as mentioned in paragraph 1, DGT has the right to do tax examination abroad or simultaneous tax examinations.

Between chapter II and III chapter IIA is inserted as follow

CHAPTER IIA INFORMATION REQUEST TO TAXPAYER OR OTHER PARTIES

Between article 3 and 4 article 3A is inserted as follow:

Article 3A

1.    In term of exchange of information with partner country or jurisdiction, DGT may ask information to taxpayer or other parties regarding matters related to exchanged tax matters.

2.    Taxpayer or other parties as mentioned in paragraph 1 among others are:

a.    Individual, either Indonesia citizen or foreigner who in or stay in Indonesia

b.    Corporation established in or domiciled in Indonesia

c.    Corporation established in or domiciled outside Indonesia whose information is owned and/or kept by individual or corporation in Indonesia

d.    Permanent establishment

e.    Customer of financial institution in Indonesia

f.     Financial institution, public accountant, notary, tax consultant, administrative office, government institution, institution, association and/or

g.    Other parties in Indonesia

3.    Customer as mentioned in paragraph 2 letter e is individual or corporation who use financial institution services, and such information is become object of exchange of information as mentioned in article 2 paragraph 3

4.    Financial institution as mentioned in paragraph 2 letter e and f is an institutionwho runs its business in banking, capital market, insurance, pension fund, funding institution and other financial institution in accordance with law and regulation in financial services authority.

5.    Taxpayer or other parties as mentioned in paragraph 2 must respond to any information request regarding tax matters.

6.    When Taxpayer or other parties as mentioned in paragraph 2 is bound by confidential liability, such liability is void under tax law and regulation, by written request from:

a.    DGT or

b.    Minister of finance to board of commissioner of financial services authority, when requested information is confidential under banking law and regulation

7.    In automatic exchange of information as mentioned in article 3 paragraph 1 letter c, when financial service institution is bound by confidentiality obligation, its customer will voluntarily give approval/statement/proxy letter/written instruction to the financial instruction to give such data to DGT through related authority.

8.    When Taxpayer or other parties as mentioned in paragraph 2, 3 and 4 do not fulfill the provision in paragraph 5 or 6, such Taxpayer or other parties will be charged by sanction in accordance with law and regulation.

9.    For taxation purposes, DGT has the right to use any information surrendered by taxpayer or other parties as mentioned in paragraph 1 and 6.

Article 4 paragraph 2 is amended and become as follow:

Article 4

1.    Unit in DGT who need information will propose to Director of Taxation Regulation II to request exchange of information to tax authority in partner country or jurisdiction.

2.    Such proposal as mentioned in paragraph 1 may be conducted when there is any indication that taxpayer involved in transaction to avoid tax, tax evasion or using certain scheme to take advantage of P3B and taxpayer:

a.    Is under supervision of tax compliance, analysis and development of information, data, report and complaint received by DGT, verification, examination, collection, preliminary evidence examination, tax crime investigation on his tax obligation or

b.    Is under process of tax assessment reduction or cancellation, objection, appeal, reconsideration, mutual agreement procedure and/or advance pricing agreement to its taxation obligation.

3.    Information request as mentioned in paragraph 1 will be conducted after unit in DGT already searched for such information in Indonesia and convinced such information is in partner country or jurisdiction.

4.    Such proposal as mentioned in paragraph 1 will be sent to tax authority in partner country or jurisdiction, after Director of taxation regulation II review all criteria in paragraph 2 and 3 are met.

5.    Director of taxation regulation II will not follow up proposal which meet criteria in paragraph 2 and 3 when:

a.    Such information is available in Indonesia

b.    Has not searched for the information in Indonesia and convinced such information is in partner country or jurisdiction.

c.    Requested information is speculative and fishing expedition

d.    Requested information is not based on proper allegation

e.    Requested information may reveal trade, business, industry, commercial or expertise secrecy and/or

f.     Requested information related to state secret, public policy, sovereignty, state security or national interest.

Article 5 paragraph 3 and 6 are amended and become as follow:

Article 5

1.    Director of taxation regulation II receive information request from tax authority in partner country or jurisdiction.

2.    Director of taxation regulation II review such request as mentioned in paragraph 1

3.    Objective of such review as mentioned in paragraph 2 is to check the following:

a.    Information request is signed by competent authority in partner country or jurisdiction

b.    there is any indication that requested information related to  transaction to avoid tax, tax evasion or using certain scheme to take advantage of P3B, and

c.    meet term and condition in P3B, TIEA, convention, Multilateral or Bilateral Competent Authority Agreement, IGA or other bilateral or multilateral agreement.

4.    When requested information is not clear, Director of taxation regulation II may ask for additional information to related tax authority in partner country or jurisdiction.

5.    Information request from tax authority in partner country or jurisdiction cannot be fulfilled when:

a.    Need administrative action which against law and regulation

b.    In the same situation, such partner country or jurisdiction refuse to provide information to Indonesia, and/or

c.    Requested information is related to state secret, public policy, sovereignty, state security or national interest.

6.    When requested information meet all condition as mentioned in article 3 and no action is necessary as mentioned in paragraph 5 letter a and/or no condition as mentioned in paragraph 5 letter b and/or c, the request may be followed up as follow:

a.    For information available in information application and Director of taxation regulation II has the authority to access and use such information, Director of taxation regulation II may pass the information to tax authority in partner country or jurisdiction;

b.    For information is not available or available but Director of taxation regulation II cannot access such information, Director of taxation regulation II will request it to related unit in DGT.

7.    When such information is received from the unit as mentioned in paragraph 6 letter b, Director of taxation regulation II will pass it to tax authority in partner country or jurisdiction.

Article 6 paragraph 1, 3 and 4 are amended and become as follow:

Article 6

1.    Spontaneous exchange of information to partner country or jurisdiction will be conducted based on concrete data obtained/received from taxpayer or other parties including data from:

a.    Tax compliance supervisory

b.    Analysis and development on information, data, report and complaint received DGT

c.    Verification

d.    Examination

e.    Collection

f.     Preliminary evidence examination

g.    Ta crime investigation

h.    Tax assessment reduction or cancellation

i.     Objection

j.     Appeal

k.    Reconsideration or

l.     Mutual agreement procedure or advance transfer pricing

To taxpayer tax obligation

2.    Exchange of information as mentioned in paragraph 1 may be done without any information request from tax authority in partner country or jurisdiction

3.    Concrete data as mentioned in paragraph 1 can be exchanged when:

a.    There is indication of significant potential tax loss in partner country or jurisdiction

b.    Any indication of Unreported Payment to taxpayer in partner country or jurisdiction

c.    Tax exemption or reduction in Indonesia received by taxpayer in partner country or jurisdiction which may add tax obligation in partner country or jurisdiction; and/or

d.    Transaction between Indonesia taxpayer and taxpayer in partner country or jurisdiction through one or more other countries resulted in reduction of tax obligation in Indonesia and/or partner country or jurisdiction.

4.    Unit in DGT who receive/obtain concrete data as mentioned in paragraph 1 must share such information as mentioned in paragraph 3 to director of taxation regulation II.

5.    When based on review of director of taxation regulation II, such information is not meeting condition in paragraph 3, director of taxation regulation II:

a.    Will not pass such information to partner country or jurisdiction and

b.    Inform unit in DGT who pass the information as mentioned in paragraph 3.

6.    When based on review of director of taxation regulation II, such information meet condition in paragraph 3, director of taxation regulation II pass the information to tax authority in partner country or jurisdiction in accordance with tax law and regulation.

Article 8 is amended and become as follow:

Article 8

1.    Automatic exchange of information include:

a.    Tax collection/withholding on income paid to tax subject in partner country or jurisdiction

b.    Financial Information of customer

2.    Automatic exchange of information as mentioned in paragraph 1 letter a in form of:

a.    Taxpayer or other party identity including

1)   Name

2)   ID card number

3)   Passport number

4)   Taxpayer registration number for domestic taxpayer or other identity number for taxation purposes for foreign taxpayer

5)   Date of birth and

6)   Address in Indonesia and/or abroad

b.    Domestic taxpayer identity as tax collector/withholder such as:

1)   Name of taxpayer

2)   Date of birth of individual taxpayer or date of establishment of corporate taxpayer and

3)   Address of taxpayer

c.    Income in any name or form which paid, available for payment or already due for payment by government, domestic tax subject, event organizer, permanent establishment or representative of foreign corporation to foreign taxpayer except for permanent establishment in Indonesia, among others are:

1)   Dividend

2)   Interest including premium, discount and compensation related to loan repayment

3)   Royalty, rent and other income related to asset utilization

4)   Compensation related to services, job and activities

5)   Compensation and reward

6)   Pension and other periodic payment

7)   Swap premium and other hedging transaction premium

8)   Gain on loan written off

9)   Revenue on sale or transfer of asset in Indonesia except already ruled in article 4 paragraph 2 income tax law

10)Revenue on sale or transfer of stock as mentioned in article 18 paragraph 3c income tax law and/or

11)Taxable income after tax deduction from permanent establishment in Indonesia, unless such income reinvested in Indonesia.

d.    Gross revenue, net income and amount of income tax collection and/or withholding

e.    Tax period and/or fiscal year on income obtained

f.     Tax rate of tax collection and/or withholding

g.    Date of tax collection and/or withholding

h.    Date of tax payment

i.     Number of tax collection and/or withholding proof and/or

j.     Other information

3.    In automatic exchange of information as mentioned in paragraph 1 letter a, unit in DGT who manage and administer taxation information must share such information as mentioned in paragraph 2 to director of taxation regulation II.

4.    Customer financial information which automatically exchanged as mentioned in paragraph 1 letter b are as follow:

a.    Customer identity, including

1)   Name

2)   Tax registration number

3)   Account number

4)   ID number for taxation purposes in partner country or jurisdiction and/or

5)   Domestic or foreign address

b.    Identity of financial institution including

1)   Name

2)   Tax registration number and

3)   Address

c.    Ending balance or value (including insurance contract amount or annuity contract, cash value or surrender value) at the end of calendar year or when the account is closed during the year, amount reported is at the time of closing

d.    For custodian bank or stock brokerage

1)   Total fund obtained from sale or redemption of securities which paid or credited to the account during the year

2)   Gross amount of interest, dividend, and other domestic income derived from assets in the account which paid or credited to the account during the year.

e.    Gross amount of interest and/or other domestic income which paid or credited to account holder during the year and

f.     Other information as ruled under bilateral or multilateral agreement concerning automatic exchange of information for customer financial information.

5.    In implementing automatic exchange of information as mentioned in paragraph 1 letter b, information as mentioned in paragraph 4 will be passed to DGT as follow:

a.    Customer give approval/statement/proxy letter/written instruction to financial institution where customer id registered to give up customer financial information as mentioned in article 8 paragraph 4 to DGT via related authority

b.    Based on such approval from customer as mentioned in article 8 paragraph 5 letter a, financial institution send customer information to related authority

c.    Related authority as mentioned in letter b will pass such information to director of taxation regulation II who act as competent authority in Indonesia

6.    Director of taxation regulation II pass information as mentioned in paragraph 1 to tax authority in partner country or jurisdiction in accordance with tax law and regulation.

Chapter VIII deleted

Article 14 deleted

Amend attachment I, II, III and IV minister of finance regulation No. 60/PMK.03/2014 concerning procedures for exchange of information and become as attachment I, II, III and IV in this regulation.

This regulation will effective at promulgation date.