On 9 January 2019, Indonesia’s Directorate General of Taxation published new regulation (No. 192/PMK.03/2018) regarding foreign tax credits. The new regulations update and replace prior regulations and generally apply in respect of foreign income derived from the 2018 tax year.
The new regulations include rules on determining sources of income, calculating the credit amount, proving that foreign tax has been paid, etc., as well as several examples. The general rules that a credit is allowed for foreign tax paid and may not exceed Indonesian tax payable are not changed.
