In Indonesia, economic and Commercial Counsellor Office
According to Indonesian media in December 10th comprehensive report, because some tax treaties to Indonesia is adverse, and may lead to be tax tools, the Indonesian government will re-examine the signed with 62 countries tax treaties, and re launched the negotiations. A few days ago, Indonesian finance minister Bambang Broonegro said that at present, Indonesia and 62 countries and regions on the avoidance of double taxation agreement, but part of the agreement to become the enterprise tax evasion tool make Indonesia suffered economic losses. The Indonesian government will re-examine and pause execution has signed a tax agreement, to avoid the Indonesian tax loss.
Indonesian Ministry of Finance Tax Analysis Center Director Eustinus Parastovo believes that if the Indonesia re negotiations with 62 countries (regions) of the tax agreement, in the short term will increase the potential for Indonesia tax income 10 - 15 trillion rupiah ($8.3 - $1250000000). The Indonesia should pay special attention to the following three aspects: one is and the more developed countries the tax agreement, the developed countries because of the profits in the Indonesian business should pay income tax to Indonesia, and some investors in the financial processes in Indonesia, increase costs, reduce the profits, leading to a reduction in the Indonesian government deserve tax the. Indonesia has the necessity and the relevant country re negotiated tax agreements, restricting enterprise tax evasion and avoidance. And the two is the Indonesian Economic and trade exchanges fewer countries tax agreement. These countries and the Indonesian trade and investment is less, the tax agreement to become the enterprise tax evasion and avoidance tool. For example, in Indonesia and the United States, because the United States the rate is higher, some Usa Inc choose to set up a Off Shore Company in Hongkong, and then to the nominal investment and trade of Indonesia, to enjoy the lower tax rate, which damages the interests of indonesia. The three is to focus on the super wealthy taxpayers groups, regulation through the ownership of land, real estate, automobile and other immovable property and stocks and other assets, strictly examine the income and the income tax of pay, the Indonesian government tax revenue increase.
Tax experts said da Russel Ram University of Indonesia, Indonesia to deal with all tax treaties to sort out, careful analysis of their advantages and disadvantages, sorting out the effects or reduce tax agreement Indonesia, key amendments. Although the tax agreement to facilitate bilateral trade and investment, provide legal protection for investors, but don't become a corporate tax evasion and avoidance tool. According to the need of different Indonesia tax treaties, negotiations and the revised one by one.
The relevant local comments that the avoidance of double taxation agreement refers to between countries in order to avoid and eliminate double taxation of the same to the taxpayer, based on the same income, the bilateral tax agreement according to the principle of equality and mutual benefit and signed, is a protective policies for foreign investors. Because of the difference of economic development level of all countries, capital and technology flows between countries, among developed countries is mutual, developing countries are mainly absorb foreign capital, the introduction of technology.
China and Indonesia in November 7, 2001 in Jakarta on the avoidance of double taxation agreement. Indonesia as unilaterally to suspend or cancel the tax agreement, although can increase the Indonesian tax income to a certain extent, but will affect the stability of the Indonesian investment policy and predictable, investment enthusiasm against foreign investors, is not conducive to the overall investment environment in indonesia.