Foreign OTT Providers to Be Classified as Permanent Establishments
Endless efforts have been made by the Indonesian government to raise tax revenue from the profits which are generated by so-called over-the-top players. More recently, the Director General of Tax issued Circular Letter No. SE-04/PJ/2017 on the Determination of Permanent Establishments for Foreign Tax Subjects Which Are Providers of Applications and/or Content Services Through the Internet in a bid to classify Foreign OTT Providers as BUT which can be considered tax subjects under Indonesian taxation laws and regulations.
OJK Introduces Provisions on the Stipulation of Supervision Status and Follow-Up Measures for Commercial Banks
In a bid to improve the supervision of commercial banks and also as a follow up to Law No. 9 of 2016 on the Prevention and Control of Financial-System Crises, the Financial Services Authority has issued Regulation No. 15/POJK.03/2017. This new regulation sets out a new set of guidelines for the stipulation of supervision statuses and relevant follow up activities for commercial banks, which are now divided into systematically important banks and non-systematically important banks.
Payment and Reporting of Income Tax from the Transfer of Real Estate under Collective-Investment Contract Schemes
In order to implement Article 5 of Government Regulation No. 40 of 2016 on Income Tax for Income Deriving from the Transfer of Real Estate under Certain Collective-Investment Contract Schemes, the Ministry of Finance has issued Regulation No. 37/PMK.03/2017, which sets out further provisions relating to the payment of income tax incurred as a result of the transfer of real estate under certain collective-investment contracts, as well as procedures for reporting such payments to tax-service offices. This new regulation repeals and replaces Ministry Regulation No. 200/PMK.03/2015 which was the previous framework that addressed these matters.
Government Simplifies Customs Registration
In order to implement Article 27 of Ministry of Finance Regulation No. 179/PMK.04/2016 on Customs Registration, the Director General of Customs and Excise has issued Regulation No. PER-04/BC/2017 on Guidelines for the Implementation of Customs Registration. In essence, this regulation simplifies a number of provisions which relate to customs registration. These provisions were previously set out under: (1) Director General Regulation No. PER-10/BC/2014 on Guidelines for the Implementation of Customs Registration; and (2) Director General Regulation No. P-25/BC/2010 on Guidelines for the Implementation of Customs Service Business Registration.
New Methods for Exchanges of Tax-Related Information
As we approached the end of the tax-amnesty program, the Ministry of Finance had issued Regulation No. 39/PMK.03/2017 on Procedures for the Exchange of Information Based on International Treaties with the main goal of ensuring better tax enforcement across Indonesia. In this context, the new regulation updates the information-exchange framework which was originally regulated under Ministry Regulation No. 60/PMK.03/2014 on Information Exchange and Ministry Regulation No. 125/PMK.010/2015 as its amendment. The updates encompass the elimination of the obligation to secure consent from customers as regards the provision of tax-related information, as well as other additional measures designed to ensure a more effective exchange of information, especially information which relates to foreign corporations and their group companies.
New Provisions on Financial Soundness for Conventional Insurance and Reinsurance Companies
Recognizing the importance of enhancing the financial-soundness of conventional insurance and reinsurance companies in order that they be able to provide adequate protection to their customers, the Financial Services Authority has issued Regulation No. 71/POJK.05/2016 on Financial Soundness for Insurance and Reinsurance Companies. In an attempt to realize this objective, the new regulation outlines a number of financial soundness parameters which should be satisfied by both insurance and reinsurance companies, along with provisions relating to the allocation of guarantee funds, the separation of assets and liabilities of said companies, and the obligation to submit various financial statements to the OJK for compliance-monitoring purposes.
New Regulation on Ultra-Micro Financing
In a bid to boost the number and economic ability of entrepreneurs across Indonesia, the government has established the ultra-micro financing program, which is specifically targeted at productive businesses owned by individuals and/or micro-scale enterprises. In order to provide guidelines for the implementation of such financing, the Ministry of Finance has finally issued Regulation No. 22/PMK.05/2017, which covers various aspects relating to ultra-micro financing, including: (1) Financing targets, coordinators and distributors; (2) Sources of funding; (3) Distribution of financing funds; (4) Reporting obligations; and (5) Sanctions for non-compliance.
BI Redefines Bilyet Giro Regulation
In a bid to boost the integrity of transactions that utilize clearing-account letters (bilyet giro) and to offer protection to those undertaking such transactions, Bank Indonesia has issued Regulation No. 18/41/PBI/2016, which describes a set of comprehensive guidelines to be used by individuals and businesses that undertake bilyet giro transactions. Previously, such guidelines were regulated under BI Directors Decree No. 228/32/KEP/DIR.
OJK Regulates Risk-Management Measures for Banks Engaging in Mutual-Funds Activities
Following the issuance of OJK Regulations No. 18/POJK.03/2016 and No. 65/POJK.03/2016, the OJK is continuing to try to enhance provisions which relate to the area of risk management. This time around, the OJK has issued Circular Letter No. No. 4/SEOJK.03/2017, which sets out further details relating to the various measures which must be implemented by any banks dealing with mutual funds, so as to manage possible risk impacts. These risk-management measures are divided into four categories: first measures, which apply in general to all banks; second measures, for banks which are acting as investors; third measures, for banks which are acting as sales agents; and finally, measures which are undertaken by banks which are acting as custodian banks.
Ministry of Finance Tightens up Provisions Relating to Primary Dealers
Following the revocation of JP Morgan Chase’s status as a primary dealer of Indonesian government bonds, the Ministry of Finance has issued Regulation No. 234/PMK.08/2016 as a second amendment to Ministerial Regulation No. 134/PMK.08/2013 on Primary Dealers. This second amendment mainly aims to tighten up the provisions which relate to the organization of primary dealers. This has been achieved by adding a number of new factors to be taken into account during the appointment of any dealers, as well as a new obligation to notify the government as regards any restructuring activities and also the obligation to maintain a good relationship with the Indonesian government. Furthermore, this second amendment also adds more grounds for the revocation of any primary-dealer appointments