On April 26, 2018, the Internal Revenue Service issued a Memorandum of Understanding (MOU) between the Competent Authorities of the United States (US) and Indonesia, which includes an announcement of the temporary suspension of Indonesia’s secondary CbCR filing requirements for US corporations resident in Indonesia for financial years beginning on or after 1 January 2016.
Pursuant to the law of Indonesia, if such CAA is not operative by April 30, 2018, local filing obligations may be imposed on constituent entities of U.S. multinational groups resident for tax purposes in Indonesia, or subject to tax with respect to the business carried out through a permanent establishment situated in Indonesia (“U.S. Constituent Entities”) with respect to fiscal years commencing on or after January 1, 2016.
Notwithstanding such law, until the CAA becomes operative, the Competent Authority of the Republic of Indonesia does not intend to impose local filing with respect to U.S. Constituent Entities with respect to fiscal years commencing on or after January 1, 2016. Nevertheless, the Competent Authority of the Republic of Indonesia and the Competent Authority of the United States of America shall endeavor to make the CAA operative no later than May 31, 2018.
