Get Ready, The Minister of Finance Regulation on the 15% Global Minimum Tax to be Released This Month

JAKARTA. The government has announced that domestic regulations will be issued regarding the 15% global minimum tax provisions outlined in Pillar 2 of the international tax agreement.

According to Andi Maulana, Investment and Downstream Ministry staff, as quoted by Kontan.co.id, the regulation to be issued will be in the form of a Minister of Finance Regulation (PMK).

He explained that with the implementation of the global minimum tax, Indonesia must also anticipate its impact on investments that have been encouraged through tax incentives.

Tax Holiday Compensation to Be Prepared

One of the measures is to provide additional incentives outside of tax facilities to compensate for the loss of tax holidays. The details of the replacement facilities are still being formulated by the government.

Thus, even though the global minimum tax rate officially applies, it will not undermine Indonesia's attractiveness to investors.

For information, under the global minimum tax provisions outlined in the GloBE Rules of Pillar 2 of the global tax consensus, every multinational company falling within its scope will be subject to a minimum tax of 15%.

If a jurisdiction or country provides tax incentives to multinational companies that result in an effective tax rate below 15%, an additional tax, known as the Top-Up Tax, will be imposed on the difference. (ASP/KEN)