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May 22, 2019

Indonesia issues new guidance on Mutual Agreement Procedure

Executive summary

Indonesia’s Ministry of Finance (MOF) has released Regulation Number
49/PMK.03/2019 (PMK-49), providing guidelines for the implementation of the Mutual Agreement Procedure (MAP). PMK-49 is to implement in Indonesia the minimum standards contained in Action 14 of the OECD’s1 BEPS2 Project. PMK-49 became effective as of 26 April 2019 and provides specific procedures and timelines for the MAP application.

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.

Detailed discussion

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.

Disagreement conditions

The following conditions may result in a MAP disagreement:

  • Negotiation resulting in disagreement
  • Agreement not being reached prior to the DGT’s 24-month time limit for the negotiation
  • A tax court decision made before the agreement is reached in negotiations
  • The statute of limitations expiring and negotiations not reaching the agreement
  • Taxpayer enrolling in a tax amnesty program for a period referred to in the MAP request

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.

Transition period

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
  • Santoso Goentoro |
  • Jonathon McCarthy |
  • Peter Mitchell |
  • Peter Ng |
  • Micky M Soeradiredja |
Ernst & Young LLP (United States), Indonesia Tax Desk, New York
  • Ihsan Muttaqien |
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
  • Chris Finnerty |
  • Kaz Parsch |
  • Bee-Khun Yap |



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