The Indonesian Ministry of Finance has updated the Controlled Foreign Company (CFC) rules by issuing Regulation No. PMK-107/PMK.03/2017 on 27 July 2017. The Regulation is effective from same date.

Regulation PMK-107/PMK.03/2017 has extended the scope of the Controlled Foreign Company (CFC) rules to include the following foreign companies:

  • Directly owned CFC – a foreign entity at least 50% owned by an Indonesian taxpayer or at least 50% collectively owned by Indonesian taxpayers,
  • Indirectly owned CFC – a foreign entity with a minimum ownership of 50% by another CFC, or collective ownership by Indonesian taxpayer’s CFCs, or collective ownership by direct or indirect CFCs.