Customs
The globalization of international trade controls and sanctions, and the new reality of cooperation between international regulators in different jurisdictions, requires businesses to adopt a coordinated, global approach. A failure to comply with international trade and sanctions regimes can result in significant civil and criminal sanctions, harsh penalties for businesses and even imprisonment for individuals. Especially since Indonesia has fully participated on ASEAN Economic Community (AEC), Indonesian private and public companies, individual with certified profession, should comply with the AEC Agreement.
We advise clients on specific transactions, assist them in the design and implementation of global and regional compliance programs, help to obtain licenses and permits, manage relationships with regulators, defend enforcement actions and handle related civil and criminal litigation. We combine wide-ranging experience and knowledge of best practices in international trade and sanctions with a strategic focus on few industry sectors, particularly energy; infrastructure, mining and commodities; transport; technology and innovation and healthcare.
We also handling customs and excise permits in Indonesia to our clients such as :
Regulatory Advisory (Indonesia general Industry Introduction, Pre-Investment advisory on regulatory requirements, Investment documentary requirements assessment, ASEAN FTA schemes utilization guidance, Surveillance of customs and trade regulations development, Clearance Documents requirement and verification, Customs Liaison); Customs Clearance Advisory (Logistics and clearance cost estimation (air, sea & land transport), Import feasibility study on Indonesian ports, Due diligence and referrals); Permit And Licensing Assistance (to obtain Customs Facilities permits, to obtain import permit and licensing); Objection And Appeal (Handling daily administration of Customs correction notes, appeal on customs correction notes to tax court, appeal on customs audit result to tax court) and Audit (Pre-Audit preparation and Audit proceeding assistance)
Income Tax and Transfer Pricing
Transfer pricing is generally regulated under the Income Tax Law (Law No. 36 of 2008). Under this regulation, a tax officer is authorized to re-determine the tax income of a taxpayer with a special relationship with other taxpayers, by using certain calculations.
The government has recently issued Regulation of the Minister of Finance Number 213/PMK.03/2016 regarding types of documents and/or additional information that must be maintained by a taxpayer conducting transactions
with an affiliated party and the maintenance procedures (PMK 213). Under PMK 213, a taxpayer who fulfills several criteria must maintain the following documents, to be used to implement the Principle of Fairness and Business Prevalence in Determining Transfer Pricing:
- Master document, containing information on the group company.
• Local document, containing information on the taxpayer.
• Country-by-country report.
For income tax, the transfer pricing regulation is in Article 18 and 18(3) of Law No. 7 of 1983 regarding Tax Income, as amended by the Income Tax Law. The transfer pricing regulation for VAT is in Article 2 of Law No. 8 of 1983. This was last amended in 2009, by Law No. 42 regarding Value Added Tax on Goods and Services and Sales Tax on Luxurious Goods (VAT Law).
Indonesia’s policy regarding transfer pricing has been regulated by Directorate General of Taxation’s (DGT) Circular Letter No. SE-15/ PJ/2014 that outlined a 2014 tax audit revenue goal of IDR24 trillion, a 30% increase from the DGT’s 2013 target. Based on its 2014 target, the DGT can issue tax audit instruction letters focusing on risk for taxpayers who do any of the following:
• A transaction with domestic related parties, including individuals related to the transaction.
• A transaction with related parties (transfer pricing audit, apart from a normal tax audit due to tax (over-payment).
• Engage in the oil and gas sectors.
• Are subject to a joint audit between the DGT and external parties.
If you’d like to know further regarding Customs and Tax in Indonesia, you can send your inquiries to our email address : mail@enplaw.id
