PMK 136/2024: Global Minimum Tax

In late December 2024, the government issued new global minimum tax imposition regulations. Through the Minister of Finance Regulation (Peraturan Menteri Keuangan / PMK) Number 136 of 2024 regarding the Imposition of Global Minimum Tax Under International Agreements, the government regulates that a minimum tax will be levied on multinational companies operating in Indonesia with certain criteria.

This move aligns with international agreements, particularly Pillar 2 Amount B of the OECD's framework (OECD, 2021). As of October 31, 2021, the OECD reported that 135 tax jurisdictions had joined the Global Anti-Base Erosion Rules (GloBE). The GloBE aims to ensure that large multinational companies pay a minimum level of tax in the jurisdictions where they operate.

Although the agreement was reached in 2021, Indonesia only finalized its provisions on the global minimum tax at the end of 2024. The new regulations, consisting of 16 Chapters and 74 Articles, are detailed and comprehensive. Below is an overview of the PMK 136/2024 structure:

No.	Chapter	Article
1	Chapter I: General Provisions	Article 1
2	Chapter II: Scope	Articles 2 – 3
3	Chapter III: Global Anti-Base Erosion Rules (GloBE) Provisions Part One: General Part Two: Determination of Effective Tax Rate Part Three: Top-up Tax Part Four: Substance-based Income Exclusion Part Five: De Minimis Exclusion Part Six: Minority-Owned Constituent Entities	Articles 4 – 13
4	Chapter IV: Top-up Tax Under the Income Inclusion Rule (IIR) Part One: Application of Top-up Tax Under the IIR Part Two: Allocation of Top-up Tax Under the IIR Part Three: IIR Offset Mechanism	Articles 14 – 16
5	Chapter V: Top-up Tax Under the Under-Taxed Payments Rule (UTPR) Part One: Application of Top-up Tax Under the UTPR Part Two: Allocation of Top-up Tax Under the UTPR	Articles 17 – 18
6	Chapter VI: Computation of GloBE Income or Loss Part One: Financial Accounts Part Two: Adjustments to Determine GloBE Income or Loss	Articles 19 – 29
7	Chapter VII: Computation of Adjusted Covered Taxes Part One: Adjusted Covered Taxes Part Two: Covered Taxes Part Three: Allocation of Covered Taxes From One Constituent Entity to Another Constituent Entity Part Four: Mechanism to Address Temporary Differences Part Five: The GloBE Loss Election Part Six: Post-filing Adjustments and Tax Rate Changes Part Seven: Additional Current Top-up Tax	Articles 30 – 39
8	Chapter VIII: Corporate Restructurings and Holding Structures Part One: Application of Consolidated Revenue Threshold to Group Mergers and Demergers Part Two: Constituent Entities Joining and Leaving a Multinational Enterprise (MNE) Group Part Three: Transfer of Assets and Liabilities Part Four: Joint Ventures Part Five: Multi-Parented MNE Groups	Articles 40 – 44
9	Chapter IX: Tax Neutrality and Distribution Regimes Part One: Ultimate Parent Entity That Is a Flow-trough Entity Part Two: Ultimate Parent Entity Subject to Deductible Dividend Regime Part Three: Eligible Distribution Tax Systems Part Four: Effective Tax Rate Computation for Investment Entities Part Five: Investment Entity Tax Transparency Election Part Six: Taxable Distribution Method Election	Articles 45 – 50
10	Chapter X: Currency Translation	Article 51
11	Chapter XI: Top-up Tax Under Domestic Minimum Top-up Tax (DMTT)	Articles 52 – 53
12	Chapter XII: Safe Harbors Part One: General Part Two: Permanent Safe Harbor Part Three: CbCR Safe Harbor During Certain Periods Part Four: Application of CbCR Safe Harbor in Certain Periods to Certain Entities and Groups Part Five: UTPR Safe Harbor During Certain Periods Part Six: Simplified Calculations Safe Harbor for Non-Material Constituent Entities Part Seven: Safe Harbor Implementation Compliance Test	Articles 54 – 64
13	Chapter XIII: Administration	Articles 65 – 66
14	Chapter XIV: Initial Period Provisions of GloBE Implementation Part One: Tax Attributes During Certain Periods Part Two: Exclusion from the UTPR of MNE Groups in the Initial Phase of International Activities Part Three: Exclusion for the First Year of MNE Groups Included in GloBE Coverage Part Four: Exemption from Sanctions	Articles 67 – 70
15	Chapter XV: Delegation of Authority	Article 71
16	Chapter XVI: Concluding Provisions	Article 72

This article provides a brief overview of PMK Number 136 of 2024. The next article will delve into the specific provisions outlined in PMK 136/2024. If you have any questions, Ideatax is here to assist.

Relevant Provisions:

Law of the Republic of Indonesia Number 7 of 1983 regarding General Provisions and Tax Procedures as amended by Law of the Republic of Indonesia Number 7 of 2021 regarding Harmonization of Tax Regulations.
Government Regulation Number 55 of 2022 regarding Adjustment of Income Tax Regulations.
PMK Number 136 of 2024 regarding the Imposition of Global Minimum Tax Under International Agreements.

References

OECD2021Tax Challenges Arising from Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two) Paris OECD