Page 4 - Newsletter (Tax Incentives for Transportation Sector, Sanction for Customs, and Target of Extensification)

DDTC Newsletter Vol.02 | No.01 I July 2019 Page 4 of 6

TAX INCENTIVES FOR TRANSPORTATION SECTOR, SANCTION FOR CUSTOMS,
AND TARGET OF EXTENSIFICATION

The Follow-Up of Spontaneous Extensification Target of the DGT
Exchange Of Information
As there have been many tax incentives and relaxations
issued this year, the DGT has set four type of taxpayers as
The DGT starts following up spontaneous exchange
target of extensification on 12 June 2019. This is regulated
of information (Spontaneous EOI). This is based on
in Circular Letter Number SE-14/PJ/2019 concerning
Circular Letter Number SE-15/PJ/2019 concerning
Extensification Procedure (SE-14/PJ/2019). This Letter
Implementation Guidance of Spontaneous Information
emerged as a response to the low tax compliance level as
Exchange in order to Implement International
of May 2019.
Agreements (SE-15/PJ/2019).
Based on the provisions, extensification is defined as
This provision, which was stipulated on 19 June 2019,
monitoring activities performed by the DGT toward
acts as implementing regulation of Director General of
taxpayers who have fulfilled the subjective and objective
Taxes Regulation Number PER-24/PJ/2018 concerning
requirements, but yet to register to be given Taxpayer’s
Procedure of Spontaneous Exchange of Information in
Identification Number (Nomor Pokok Wajib Pajak/
order to Implement International Agreements (PER-24/
NPWP) as regulated in general tax provisions
PJ/2018). This document becomes the guidance for Tax
Offices (Kantor Pelayanan Pajak/KPP), Office of External
Type of taxpayers who are set as extensification target as
Data Management (Kantor Pengolahan Data Eksternal/
mentioned in the provision are as followed:
KPDE), Regional Offices of DGT and Unit of Echelon II of
the DGT. 1) Individual Taxpayers;
2) Unshared Inheritance Taxpayers;
Spontaneous EOI can be defined as information exchange
3) Corporate Taxpayers; and
that are spontaneously exchanged performed by
competent authority in Indonesia by sending relevant 4) Treasurer who is appointed as tax withholder
information that are valuable for taxation purpose of according to general tax provisions.
country or jurisdiction partners and the other way
The determination of subjective requirement fulfilment
around without preceded by request.
is based on Article 2, 2A and 3 of Income Tax Law,
such as NPWP, name and domiciled or living address,
There are two types of spontaneous EOI that are explained
place of business and assets. Regarding the objective
in the provision. First, spontaneous EOI that are sent
requirement, it can be in the form of the existence of
to the country or jurisdiction partners, recognized as
income or obligation to withhold income tax of other
outbound spontaneous EOI. Second, spontaneous EOI
taxpayers.
sent from country or jurisdiction partners, recognized as
inbound spontaneous EOI.
In addition, taxpayers who does not receive or earn
income; or receive income in Indonesia where the taxation
The information is to be spontaneously exchanged
of the income is limited due to tax treaty but are obliged
between related tax authorities if they contain the
to withhold income tax of other taxpayers, are said to
followings:
fulfil the objective requirement. The confirmation will be
a. indication of tax revenue lost, either for Indonesia or processed based on scale priority through information
country or jurisdiction partners; system and the result of risk analysis perform by the DGT.
b. taxpayers’ income that are suspected to be not
reported; In case the taxpayers have been clarified to fulfil
subjective and objective requirements to be given NPWP,
c. tax reduction or exemption that potentially add the
then for taxpayers who voluntarily register will be given
amount of tax obligation;
guideline to register online through e-registration. On
d. business activities performed between taxpayers
the other hand, for taxpayers who do not voluntarily
in Indonesia and country or jurisdiction partner
register when administrative audit (visit) is being held
through several countries that are arranged in a
by Account Representative, then the NPWP will be given
way that causes tax paid in Indonesia, country or
ex-officio. This method also holds through audits for
jurisdiction partner, or both decreases; and/or
other purpose that are performed according to general
e. suspicion that there could be tax reduction caused tax provisions that regulate audit procedure.
by profit shifting within a business group.