The Director of International Taxation of the Directorate General of Taxes has confirmed that Indonesia is planning to implement the Pillar Two GloBE Rules from 2024. On 1-3 March 2023, the Ministry of Finance, Republic of Indonesia including Direktorat Jenderal Pajak Republik Indonesia and Badan Kebijakan Fiskal – Kementerian Keuangan Republik Indonesia held a workshop, supported by Asian Development Bank (ADB) to address the preparation.
The workshop highlighted the following important policies that need to be anticipated.
- Minimum global tax at the effective tax rate of 15%.
- Global anti-base erosion rules aim to reduce the incentives to shift profits to low-tax jurisdictions.
- It gives jurisdictions the ability to “tax back” group profits that are subject to a low effective rate in other jurisdictions.
- Jurisdictions may have to redesign their tax incentives to commit to the rules while maintaining a competitive advantage.
- Arrangements may vary but the latest calculations provide positive result if it is implemented.
