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Indonesia aims to reduce tax losses from foreign firms’ dividends
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Directorate General of Taxation reform team chairman Suryo Utomo. (JP/Anton Hermansyah)
T
he Directorate General of Taxation is attempting to revise a regulation on controlled foreign companies (CFC) in an effort to prevent further tax losses for Indonesians with controlling interest in a foreign company.
The proposed amendment on Finance Ministerial Regulation No. 256/PMK.03/2008 aims to address taxpayers who did not report their dividend income from foreign investment placement, Directorate General of Taxation reform team chairman Suryo Utomo said on Monday.
"We are concerned about the dividend income report. Some taxpayers have already had investments in foreign companies for more than 15 years but never received dividends -- that is strange," Suryo said at a media briefing in Tanjung Pandan, Bangka Belitung.
The tax office, he said, did not have sufficient data to determine whether taxpayers lied in their tax forms.
He further added that tax evaders had been taking advantage of a hole in the regulation, which states that the Indonesian government only charges taxes on a foreign company's dividends if an Indonesian citizen has controlling interest.
"We may change the definition of controlling interest in the [existing] Finance Ministry regulation," Suryo said, adding that the government preferred to amend the ministerial decree to make the process quicker rather than the amending the Taxation Law, which requires approval from the government. (bbn)
