Multinational companies within the scope of the global minimum tax (GMT), or Pillar Two, need to start preparing for the calculation and reporting obligations for the 2025 tax year. Preparations should begin before year-end to identify potential additional tax liabilities and assess whether the Safe Harbour mechanisms can be used.
Indonesia’s global minimum tax rules are set out in Minister of Finance Regulation (PMK) No. 136 of 2024 on the Imposition of Global Minimum Tax Based on International Agreement. The regulation took effect on January 1, 2025, and provides the basis for implementing the Global Anti-Base Erosion (GloBE) rules for the 2025 tax year for multinational enterprise groups (MNE groups) that meet the scope requirements, namely those with consolidated gross revenue of at least EUR 750 million in at least two of the four tax years preceding the relevant tax year.
Under the rules, MNE groups are subject to a minimum effective tax rate of 15% in each jurisdiction. If the effective tax rate (ETR) in a jurisdiction is below 15%, an additional tax liability, or top-up tax, may arise under the GloBE mechanism.
Accordingly, companies within the scope of Pillar Two need to look beyond the statutory corporate income tax rate applicable in a country and also consider the ETR calculated under the GloBE rules.
Safe Harbour
Companies within the scope of Pillar Two are not necessarily required to perform a full GloBE calculation in every jurisdiction. PMK 136/2024 provides safe harbour mechanisms that can simplify the calculation and, if all requirements are met, reduce the additional tax payable in a jurisdiction to zero.
One mechanism relevant during the transition period is the transitional country-by-country report (CbCR) safe harbour. This mechanism includes three tests: the de minimis test, simplified ETR test, and routine profits test.
There are also provisions for the permanent safe harbour and specific provisions concerning the undertaxed profits rule (UTPR) safe harbour. However, using a safe harbour does not mean that an MNE group is exempt from its Pillar Two obligations. Companies must still ensure that all requirements are met and comply with the relevant reporting obligations.
In principle, the safe harbour is also applied on a jurisdiction-by-jurisdiction basis. In other words, successfully applying a safe harbour in one country does not automatically mean it can be applied in another jurisdiction.
Data quality is a critical factor, particularly for companies using the transitional CbCR safe harbour. The CbCR data and financial statements used in the assessment must meet the prescribed requirements.
Companies also need to consider tax incentives or facilities received by entities in Indonesia. Incentives that affect tax expenses may have an impact on the ETR and, ultimately, on the safe harbour tests and GloBE calculations.
2025 Tax Year
For groups coming within the scope of the rules for the first time in the 2025 tax year, companies need to carry out the relevant calculations and tests during 2026 to determine whether any additional tax is payable and whether the safe harbour mechanisms can be used.
If additional tax is payable for the 2025 tax year, payment must be made within the deadline stipulated in PMK 136/2024. Additional tax for the 2025 tax year must be paid no later than December 31, 2026. Reporting obligations, meanwhile, need to be distinguished between the tax return (SPT) relating to additional tax and the GloBE information return (GIR) and notification.
For the first year an MNE group falls within the scope of Pillar Two, certain reporting deadlines are extended. Companies need to pay attention to the special rules applicable in the first year before determining their compliance schedule. For subsequent tax years, reporting deadlines will revert to the normal periods stipulated under the regulations.
Technical Rules
The Directorate General of Taxes (DGT) has also issued Regulation of the Director General of Taxes No. PER-6/PJ/2026. The regulation sets out procedures for exercising rights and fulfilling GMT obligations, including procedural requirements relating to forms and reporting.
With these technical rules in place, companies within the scope of Pillar Two need to ensure that their systems and data are ready to meet the relevant administrative obligations. Preparations include identifying the MNE group, mapping constituent entities, collecting financial and tax data, calculating the ETR for each jurisdiction, and assessing eligibility for the safe harbour.
Companies also need to determine the relevant obligations, including the domestic minimum top-up tax (DMTT) and provisions concerning the income inclusion rule (IIR) and undertaxed profits rule (UTPR), depending on the circumstances of each group.
Year-End Preparations
With the 2025 tax year still ongoing, companies have time to project their ETR based on current data and identify jurisdictions that may have an ETR below 15%. This is important because once the books are closed, the opportunity to correct data quality issues and ensure that all information required for the GloBE calculation is complete will become increasingly limited.
There are at least several initial steps MNE groups should take. First, perform the GloBE calculation for the 2025 tax year and test whether the Safe Harbour can be used. If additional tax remains payable after all calculations have been completed, payment must be made no later than December 31, 2026. Second, prepare the reporting obligations separately. The SPT for GloBE purposes for the 2025 tax year is generally due no later than April 30, 2027, while the deadline for the first year may be extended to June 30, 2027.
Meanwhile, the GIR for the first year must be submitted no later than June 30, 2027. The Notification requirement follows the rules on the party responsible for filing and does not apply separately to a party that has already fulfilled its GIR filing obligation. Third, companies should begin preparing ETR projections for the 2026 tax year so that potential top-up tax liabilities and the use of Safe Harbour can be anticipated at an early stage.
Pillar Two compliance is not solely the responsibility of the tax function. GloBE calculations require financial and tax data from various entities within the group, making coordination between the group parent and subsidiaries, as well as across functions, an important part of compliance preparations.
For multinational companies within the scope of the rules, readiness before the 2026 year-end is critical to ensuring that global minimum tax calculations, payments, and reporting can be completed in accordance with the applicable requirements.
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Writer: Yunianto Kurniawan | Editor: Thomas Rizal
