Ministry of Finance Prepares Regulation on Ratification of Global Minimum Tax Provision

JAKARTA. The Ministry of Finance is currently preparing rules to ratify the 15% global minimum tax provision, which is contained in Pillar Two of the digital tax consensus.

Quoting Kontan.co.id, the plan is that the provision will take effect in 2025, with Inclusive Framework member countries under the OECD and G20 agreeing to the consensus.

This was conveyed by the Director of Extension, Services and Public Relations of the Directorate General of Taxes (DGT) Dwi Astuti. "We have stated that we are ready and in 2025 we will implement it," she said.

Read: Is Indonesia Ready to Adopt the Two-Pillar of Global Tax Architecture?

According to her, Indonesia hopes that the provision can be implemented immediately because it will be a source of new tax revenue from multinational companies.

For information, the provisions of Pillar Two of the Digital Tax Consensus will apply the Global Anti-Base Erosion Rules (GloBE) principle.

With this principle, every multinational company that has a global gross revenue of at least 750 million Euros is subject to a minimum tax of 15%.

The GloBE provision also requires all jurisdictions where the corporate income tax rate on interest, royalties, and other payments is less than 9%, to comply with the Subject to Tax Rule (STTR).

This compliance must be outlined in bilateral agreements with developing country members of the Inclusive Framework to avoid abuse. (ASP/KEN)