New MoF Reg. on Cross-Jurisdictional Assistance in Tax Collection 

JAKARTA, DDTCNews – The government has updated procedures for the implementation of assistance in tax collection with partner jurisdictions in line with the enactment of the Minister of Finance Regulation (PMK) Number 61 of 2023.

MoF Reg. 61/2023 has been released to accommodate changes to the General Provisions and Tax Procedures (KUP) Law after the enactment of Law 7/2021, including those related to the implementation of assistance in tax collection with partner jurisdictions.

“Assistance in tax collection is the assistance in tax collection facility contained in international agreements that may be utilised by the government of Indonesia and the government of a partner country or partner jurisdiction on a reciprocal basis ...,” reads Article 1 number 28 of MoF Reg. 61/2023, quoted on Monday (19/6/2023).

Article 78 of MoF Reg. 61/2023 emphasises that the Minister of Finance is authorised to implement assistance in tax collection with partner jurisdictions. The assistance in collection includes the requests for and provision of assistance to the competent authority in partner jurisdictions.

The request for assistance in tax collection and the provision of assistance in tax collection are implemented by the Director General of Taxes reciprocally based on international agreements, namely Tax Treaties (P3B), the Convention on Mutual Administrative Assistance in Tax Matters (MAAC) or other bilateral or multilateral agreements.

“The request for assistance in tax collection and the provision of assistance in tax collection … is implemented if the partner countries or partner jurisdictions have domestic provisions stipulating the implementation of assistance in tax collection on a reciprocal basis.,” reads Article 78 paragraph (5) of MoF Reg. 61/2023.

In its implementation, the Director General of Taxes may request assistance from officials in partner jurisdictions to obtain payment for tax liabilities and tax collection costs.

Assistance in Tax Collection Must Fulfil 5 Criteria

Every assistance in tax collection from the DGT to partner jurisdictions must fulfil 5 criteria. First, only containing 1 identity of the tax bearer. Second, the tax bearer is in the partner jurisdiction or owns goods in the partner jurisdiction.

Third, the tax liabilities are not under a dispute or have permanent legal force. Fourth, domestic collection has been carried out but the tax bearer has not settled the liabilities. Fifth, the right to collect tax debts has not yet expired.

The provision of assistance in tax collection by the DGT to partner jurisdictions must be based on tax claims submitted by the competent authority officials in the partner jurisdictions.

“Tax claim is a legal instrument of a partner country or partner jurisdiction in respect of a request for assistance in tax collection,” reads Article 1 number 31 of MoF Reg. 61/2023. 

Based on a claim submitted by the partner jurisdictions, the DGT verifies the conformity of the information in the tax claims and the criteria for the provision of assistance in collection.

Assistance in collection is provided if the claim only contains 1 identity of the tax bearer, the tax bearer is in Indonesia or has goods in Indonesia that may be used to pay the claim.

Next, the claim value is in rupiah currency, the claim is signed by the partner jurisdiction officials, the claim is not under any dispute, the claim has been subject to collection measures based on the agreement and the right to collect tax on the claim has not yet expired.

Promulgated on 12 June 2023, MoF Reg. 61/2023 has been in force since the date of promulgation. With the enactment of MoF Reg. 61/2023, MoF Decree 85/2002, MoF Reg. 23/2006 and MoF Reg. 189/2020 are revoked and declared invalid. (rig)