The government has reinforced tax regulations on deemed dividends for Indonesian taxpayers who own controlling shares at non-listed companies overseas. The policy is in line with the OECD recommendation stated in the Base Erosion and Profit Sharing Action 3, namely the Strengthening Controlled Foreign Company (CFC) rules. In response, the Finance Ministry has issued the regulation PMK No. 107/PMK.03/2017 concerning Deemed Dividends by Resident Taxpayers on Ownership in Overseas Enterprises other than Business Entities listed in the Stock Exchange, which also replaces the earlier 2008 regulation. The new regulation addresses six issues. The first is to widen the tax calculation base on dividends paid by non-listed overseas business entities. Previously, the criterion for a CFC was mainly direct control in non-listed business entities. The latest regulation also includes non-listed C...

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