The Ministry of Finance issued a regulation with guidance concerning the procedures for the exchange of financial information with other jurisdictions and countries. The “automatic exchange of information” (AEOI) process will allow for the exchange of data to verify and confirm compliance with tax obligations, including information from financial institutions.
The AEOI standard was developed by the Organisation for Economic Cooperation and Development (OECD) and provides for the systematic transmission of investment information by the tax authority of those account holders in its country to the tax authority of the country of residence of the account holders, on an annual basis.
Indonesia has agreed to early AEOI implementation in September 2017 (rather than September 2018). While it is not new that the Directorate of General Taxation can access taxpayers’ financial information from banks, the regulation broadens the Indonesian tax authority’s ability to obtain information from other sources.
The KPMG report also describes new procedures for hiring foreign workers in Indonesia.
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