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The Directorate General of Taxes announced that as of April 2024, 112 tax jurisdictions have participated in the Automatic Exchange of Information (AEOI) cooperation with Indonesia. Among these tax jurisdictions are Albania, Andora, Australia, the Bahamas, Bermuda, Gibraltar, Portugal, Qatar, and so on. This number has increased by two jurisdictions compared to April 2023.
In addition, in its official release, the Directorate General of Taxes also announced that there are 83 countries for reporting Indonesian tax information, including Croatia, Finland, France, Malta, Mauritius, and so on. The countries participating in Indonesia's information exchange and reporting destinations are as follows:
It should be noted that the automatic exchange of data for tax purposes is a tax standard that regulates how tax authorities participate in the exchange of information with the tax authorities of other countries (EFG 2024). According to the OECD (2015), the initiation of the Automatic Exchange of Information (AEOI) occurred in 2012. At that time, there was a political will among the leaders of the G20 countries to exchange tax information. In 2013, the Finance Ministers of the G20 countries agreed to encourage the automatic exchange of information as a new standard. This was followed by the commitment of G8 leaders, who approved the OECD Secretary General's report entitled “A Step Change in Tax Transparency” (OECD 2015).
Furthermore, in February 2014, 34 OECD countries announced the OECD Declaration on Automatic Exchange of Information in Tax Matters. This declaration also marks the commitment of 65 tax jurisdictions to implement the exchange of tax information. In this commitment, it is agreed that the exchange of tax information will begin in 2017.
In July 2014, the OECD officially published the exchange of financial account information standard. This standard requires countries that declare their commitment to information exchange to obtain or collect data on customer account details of financial institutions in their jurisdiction.
In Indonesia, the regulation on the exchange of financial information for tax purposes was ratified in 2017. Through Government Regulation in Lieu of Law Number 1 Year 2017, the government regulates access to financial information for tax purposes.
This provision is then elaborated in Minister of Finance Regulation No. 70/2017 on Technical Guidelines Regarding Access to Financial Information for Tax Purposes, as last amended by PMK 47/2024.
Through the PMK, the Government regulates that Information Exchange is an activity to submit, receive, and/or obtain financial information related to taxation based on International Agreements, which aim to prevent tax avoidance, tax evasion, preventing abuse of Double Taxation Avoidance Agreements by unauthorized parties; and/or obtain information related to the fulfillment of tax obligations of taxpayers.
Furthermore, through the regulation, the government also regulates that there are two mechanisms of financial information exchange for tax purposes. First, information exchange is done automatically. Second, tax information exchange is conducted based on request.
Automatic information exchange is conducted with officials in Participant Jurisdiction and/or Reporting Destination Jurisdiction (as many as 83 jurisdictions) authorized to conduct Information Exchange. Meanwhile, information exchange based on request is conducted with officials in Foreign Jurisdictions that are bound (112 jurisdictions) with Indonesia in an International Agreement authorized to carry out Information Exchange.
Three institutions are required to submit reports containing financial information, including financial services institutions (FSIs) that carry out activities in the banking, capital market, and insurance sectors as stipulated in the Law on the Financial Services Authority, other financial services institutions (Other FSIs) as stipulated in the Law on the Financial Services Authority and other entities whose business activities are as Custodian Institutions, Depository Institutions, Certain Insurance Companies, and/or Investment Entities.
Subsequently, the report containing the financial information is reported by the Financial Services Institution to the Financial Services Authority for further reporting to the Directorate General of Taxes. Meanwhile, other Financial Services Institutions and other entities submit their reports directly to the Directorate General of Taxes.
Related to the substance of reporting. PMK 70/2017, as last amended by PMK 47 of 2024, among others, regulates that the financial data report for tax purposes at least contains information related to the identity of the Financial Account Holder, Financial Account number, identity of the reporting financial institution, balance or value of the Financial Account and income related to the Financial Account. If there are no Financial Accounts that must be reported in a calendar year, the reporting financial institution is still required to submit a nil report under the provisions.
That's a brief overview of the automatic exchange of information. If you need further consultation related to AEOI procedure, Ideatax is ready to help.
