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May 22, 2019
Indonesia issues new guidance on Mutual Agreement Procedure
Indonesia’s Ministry of Finance (MOF) has released Regulation Number
PMK-49 revokes the MOF Regulation Number 240/PMK.03/2014 (PMK-240). While PMK-49 is generally consistent with PMK-240, PMK-49 includes changes as discussed below.
This Alert summarizes key aspects of PMK-49.
Specific timelines for the MAP
PMK 49 provides that a taxpayer, the Directorate General of Taxation (DGT) and a treaty partner’s competent authority (CA) must follow the specific timelines during the MAP. PMK-49 states that the DGT will conduct negotiations with the CA within 24 months of the initial date of the MAP request.
The following conditions may result in a MAP disagreement:
Information gathering during the MAP
Under PMK-49, an information request by a foreign CA should be made directly to the DGT, however PMK-49 leaves open the ability for the DGT to gather information from all relevant parties.
PMK-49 grants the DGT the right to cancel a MAP process when the information gathering processes are not followed.
Revocation of MAP requests
PMK-49 also includes procedure for a taxpayer to request a revocation of the MAP request. The DGT may reject a revocation request in certain circumstances.
All MAP submissions that are already in progress will be followed up by the DGT under PMK-49. It is not entirely clear, however, how the DGT will apply the time limits contained in PMK 49 to these on-going MAP cases.
1. Organisation for Economic Co-operation and Development.
2. Base Erosion and Profit Shifting.
For additional information with respect to this Alert, please contact the following:
EY Indonesia, Jakarta
Ernst & Young LLP (United States), Indonesia Tax Desk, New York
Ernst & Young LLP (United States), Asia Pacific Business Group, New York