Finance Ministerial Regulation (PMK) No. 127 stipulates that SPVs must be be liquidated as part of the requirements to receive the tax pardon. However, many businesspeople have objected to the prerequisite, arguing that it is not easy to liquidate an SPV.

"We have received input from businesspeople. We are currently processing the easing of the rule, hopefully it can be issued before the first period ends, by Sept. 30," Taxation Directorate General spokesperson Hestu Yoga said at the Indonesia Stock Exchange (IDX) building in Jakarta on Tuesday.

IDX president director Tito Sulistio said people established SPVs not only to keep share-ownership in Indonesian companies but also in foreign companies. The assets kept in the SPV are usually collateral for debt, meaning that they are subject to the covenant.

"For example, if you have an SPV that holds significant ownership in a Hong Kong company, due to tax amnesty participation you have to change the asset-ownership from the SPV's name to your company. To do that, then you’ll have to conduct a tender offer," Tito told The Jakarta Post.

While the IDX has eased the tender-offer requirement for tax amnesty participants, it only applies to Indonesian-listed companies. Any change of more than 20 percent in stock-ownership in a company listed on an offshore capital market will still require a tender offer. (ags)

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