x

The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Indonesia

This report for Indonesia has been published on 26 Oct 2011. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


loading...


Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   No enforcement provisions are in place in respect of the obligation to provide updates on ownership information on foundations not carrying on a business and in respect of the obligation on trustees of foreign trusts to keep ownership information.  Indonesia should ensure that enforcement provisions are in place in respect of the availability of (updated) ownership information in respect of all relevant entities and arrangements. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   No obligation exists to maintain accounting records, including underlying documentation, in respect of foreign trusts not engaged in business activities in Indonesia which have a trustee or administrator resident in Indonesia.  Indonesia should ensure that accounting records, including underlying documentation, in respect of foreign trusts which have a trustee or administrator resident in Indonesia are required to be maintained for a period of at least five years in all cases. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is not in place.   Indonesia requires the name of the taxpayer to access information held by banks, and the name of the account-holder or the account number to access information on securities accounts held by custodians.  Indonesia should ensure that the identification requirements in its laws to access bank information and information on securities accounts held by custodians are in line with the international standard. 
The powers of Indonesia’s tax authorities to obtain information in order to respond to requests under its information exchange agreements are not unambiguously provided for in its laws.  Indonesia’s tax law should be clarified to remove any potential ambiguity as to whether tax authorities have the power to obtain information in response to a request for information under an information exchange agreement. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   A number of agreements signed more than two years ago have not yet been ratified by Indonesia.  Indonesia should ensure that its exchange of information agreements are brought into force as quickly as possible. 
The shortcomings identified in Part B of this report mean that Indonesia is not able to fully comply with the terms of its EOI arrangements with respect to its ability to access bank information or information regarding securities accounts in certain cases, although there is no similar impediment to access to information in other cases (see B.1).  Indonesia should amend its legislation in such a way that it can fully comply with the terms of its information exchange agreements. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The DTCs with two of Indonesia’s main trading partners do not provide for effective exchange of information.  Indonesia should continue to develop its EOI network with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.