New Rules About Publish Mutual Agreement Procedure (MAP). These are the important points

Indonesia as a G20 member country constantly adapts to international developments in the field of taxation related to the application of minimum standards in the action plan No. 14 of the OECD / G20 Base Erosion and Profit Shifting (BEPS) project regarding more effective prevention and resolution of international tax disputes. On April 26, 2019, the government set a new provision regarding the Mutual Agreement Procedure (MAP) through the Minister of Finance Regulation Number 49 / PMK.03 / 2019. This is done considering that in the previous provisions (240 / PMK.03 / 2014) it was not fully in accordance with the minimum standards in action plan No. 14 of the OECD / G20 BEPS project and had not been able to provide legal certainty, especially regarding procedures, time periods, and follow-up requests MAP.

 

Who Can Do Requests for MAP Implementation?

Domestic Taxpayers may submit requests for the implementation of MAP to the Director General of Taxes as Indonesian Authorities in the event of taxation treatment by the Authority of the Tax Treaty Partner’s Authorized Officer that is not in accordance with the P3B provisions, such as in the case of:

  1. imposition of tax by the Tax Authority  of a Tax Treaty Partner which results in the imposition of double taxation caused by correction of Transfer Pricing, corrections related to the existence and/or profit of permanent business forms; and/or correction of other income tax objects;
  2. the imposition of taxes including withholding or collection of income tax on P3B Partners that are not in accordance with the provisions stipulated in the P3B;
  3. determination of status as a subject of domestic tax by the Tax Authority of Tax Treaty Partners;
  4. tax treatment discrimination at Tax Treaty Partners; and/or
  5. interpretation of the Tax Treaty provisions.

In addition, the Director General of Taxes or the Tax Authorities of Tax Treaty Partners through Tax Treaty Partner’s Authorized Officer are in accordance with the provisions in the Tax Treaty, also receive requests for MAP implementation in terms of article 5 paragraph (5) and (6) PMK No. 49 / PMK.03 / 2019.

Requirements for Application of MAP Implementation

Requests for implementation of MAP submitted by the Applicant (Domestic Taxpayer and Indonesian Citizen) must meet the following requirements:

  1. submitted in writing in Indonesian,

2. expressed the incompatibility of the application of the Tax Treaty provisions according to the Applicant,

3. submitted within the time limit as stipulated in the Tax Treaty or no later than 3 (three) years if it is not regulated in the Tax Treaty, starting from:

a. date of tax assessment letter;

b. date of proof of payment, deduction or collection of income tax; or

c. during the occurrence of tax treatment that is not in accordance with the provisions of the Tax Treaty

4. signed by the Applicant or representative as stipulated in Article 32 paragraph (1) of the UU KUP, and

5. attached with:

a. domicile certificate or other document containing the Domestic Taxpayer identity of the Tax Treaty Partner’s related to the request for implementation of the MAP,

b. a list of information and/or evidence or information held by the Applicant indicating that the tax treatment by the Tax Authorities of the Tax Treaty Partner is not in accordance with the provisions of the Tax Treaty, and

c. a statement stating the willingness of the Applicant to submit information in a complete and timely manner.

Duration of Follow-Up Request for Implementation of MAP

  1. The Director General of Taxes follows up on the results of research related to the request for implementation of the MAP submitted by the Applicant or through the Tax Treaty Partner’s Authorized Officer within a maximum period of 1 (one) month from the receipt of the request for implementation of the MAP.
  2. In the event the request for implementation of the MAP to the Tax Treaty Partner’s Authorized Officer does not get a written answer from the to the Official Authorities of Tax Treaty Partners within a maximum period of 8 (eight) months after the MAP implementation request is submitted, the Director General of Tax issues a written notification to the Applicant or domestic Taxpayer related to the request for implementation of MAP that the request for implementation of MAP cannot be followed up, and Tax Treaty Partner’s Authorized Officer that the request for implementation of MAP is revoked.
  3. The Director General of Taxes conducts negotiations with the Tax Treaty Partner’s Authorized Officer within a period of 24 (twenty four) months as of the receipt of the written request for MAP from the Tax Treaty Partner’s Authorized Officer, or submits a written request for implementation of the MAP to the Tax Treaty Partner’s Authorized Officer.
  4. The Director General of Taxes follows up on the results of negotiations by issuing a decree within a maximum period of 1 (one) month from the receipt of written notification from the Tax Treaty Partner’s Authorized Officer that a Joint Agreement can be implemented; and submission of written notification to the Tax Treaty Partner’s Authorized Officer that a Joint Agreement can be implemented.

 

Source : https://www.ortax.org/ortax/?mod=info&page=show&id=374&list=1 

Incentive Plan 2019
Incentive Plan 2019

No Comment

Leave a Reply

Your email address will not be published. Required fields are marked *