Perppu 1/2017: Access to Financial Information for the Tax Purpose
Indonesian government finally has issued the Government Regulation in lieu of Law (Perppu) Republic of Indonesia Number 1 Year 2017 (Perppu 1/2017) which stipulates the access of financial information for tax purposes, which comes in effect on May 8, 2017. This regulation is issued in order to fulfill the Indonesian Government’s commitment to implement Automatic Exchange of Information (AEoI).
Key points stipulated in Perppu 1/2017 are as follows:
Article 2
- DGT is authorized to obtain access to financial information for the tax purpose of a financial services institution conducting activities in the banking sector, capital markets, insurance, other financial services institutions, and/or other entities categorized as financial institutions in accordance with the standards exchange of financial information under the international agreement in the field of taxation.
- Reports from financial institutions given to the DGT must contain financial information for a year.
- Financial reporting information at least contain:
- The identity of the account holder;
- Financial account number;
- The identity of financial services institutions;
- The balance or value of the financial account; and
- Income associated with the financial account.
- Before submitting a report to the DGT, the financial institution shall verify the data.
- When submitting a report to the DGT, the financial institution is forbidden to open a new account or do a new transaction of the audited Taxpayers.
Article 3
Reporting from financial institutions can be both electronic and non-electronic mechanisms.
Article 4
In addition to receiving a report from a financial institution, the DGT is authorized to request additional information or evidence from the institution.
Article 6
Parties that conducts access and exchange of financial data for tax purpose cannot be prosecuted criminal and civil.
Article 7
Leaders of financial institutions that refuse to report or do not verify data can be sentenced to imprisonment for a maximum of one year or or fine with the minimum IDR 1 billion