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Indonesia ratifies tax treaty with UAE
Indonesia and the United Arab Emirates (UAE) ratified a tax treaty set to avoid double taxation and income tax evasion, giving legal certainty to people and businesses about taxation rights and incentives.
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President Joko Widodo chats with Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan from UAE during the prince's visit to Bogor Presidential Palace, West Java, Wednesday, July 24, 2019. (JP/Seto Wardhana)
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ndonesia has ratified a tax treaty with the United Arab Emirates (UAE) that straightens out taxation terms for cross-border transactions amid growing economic activity between the two countries.
The treaty officially came into effect through the issuance of Presidential Regulation (Perpres) No.34/2021 on the agreement between Indonesia and the UAE on avoiding double taxation and preventing tax evasion. President Joko “Jokowi” Widodo signed the Perpres on May 4.
Tax office spokesperson Neilmadrin Noor told The Jakarta Post on Friday that the treaty was expected to give greater legal certainty for persons and firms doing business in the two countries.
“This ratification is one of the tax office’s efforts in optimizing tax revenues from cross-jurisdictional economic activities, as well as preventing double taxation and double non-taxation,” he said.
Read also: Jokowi, UAE crown prince discuss bilateral ties, investment
Neilmadrin said that some key points in the agreement included a maximum 10 percent tax on dividends, 7 percent tax on gross interests and a 5 percent tax on royalties and fees for technical services.
The agreement also outlines commitments for both countries to exchange tax-related information in tackling tax evasion.
