This report covers the recently revised Certificate of Domicile Rules in Indonesia and summarizes conditions and requirements in the new regulation.
In 2017, the Director General of Taxation (DGT) issued regulation PER-08/PJ/2017 regarding the certificates of domicile for Indonesian tax residents (Surat Keterangan Domisili Bagi Subjek Pajak Dalam Negeri Indonesia - SKD SPDN). The new regulation revoked and replaced the former regulation PER-35/PJ/2010.
Although most of the revisions are administrative, monthly tax returns and payments (if applicable) must be current to obtain approval and a separate certificate of domicile (COD) is required for each country. Dual resident expatriate employees should apply for this COD to secure this exemption from tax in the other country.
Indonesia has entered into a double taxation treaty with 63 countries, which generally regulates the taxing right of the source country. Obtaining a Certificate of Domicile (COD) from the Indonesian Tax Authorities will allow Indonesian resident taxpayers to claim tax treaty benefits in the corresponding country where they are also subject to tax. For example, a taxpayer who qualifies for dual tax residency may need a COD from Indonesia to help ensure that his Indonesian salary is only subject to income tax in Indonesia and is not subject to double taxation in the other country of residence.
Under this regulation, a resident taxpayer may request a COD to be issued for the following:
|Tax Year/Period||Timing when COD is submitted||Condition for approval|
|Current tax year||Anytime during the year||The latest Article 25 monthly tax return due has been submitted (if applicable)|
|Previous tax years||Before annual tax return date||The latest Article 25 monthly tax return due has been submitted (if applicable)|
|Before extended return due dateA request for extension to file the annual tax return has been submitted||A request for extension to file the annual tax return has been submitted|
|After annual or extended tax return due date||The annual tax return for the relevant year has been submitted|
Other conditions and requirements in the new regulation are as follows:
|Details||OLDBased on PER-35/PJ/2010||NEWBased on PER-08/PJ/2017|
|Form name||Form – DGT 6||Form SKD SPDN|
|Submission format||Hard copy||Hard copy and soft copy|
|Indonesian Tax Identification Number||Required||Required|
|Number of countries where treaty benefit will be applied||One COD could be used for several countries||A different COD must be used for each country|
|COD tax year and tax period||Not required||Required|
|Offshore counterpart information||Not required||
- Tax identification number
- Transaction value in foreign currency and IDR
|Request to utilize special form from the corresponding country’s tax authority||Not regulated||Regulated and available|
|Processing time||5 days||10 days|
|Validity||12 months from the date of issuance||12 months from the date of issuance|
The information contained in this newsletter was submitted by the KPMG International member firm in Indonesia.
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