Climate Risk of COVID-19 and Imperative Considerations in Business

Outbreak which spread rapidly in the beginning of 2020 as we called COVID-19 has been attacking many country economy all around the world. Nowadays company which has supply chains operation will be vulnerable, face slow economic turnover in their business or the worst possibility become stuck because they wouldn’t able to get their needs of stock, raw material, available worker and etc. There are 5 consideration which company needs before new normal economy started based on my research and analysis:

  • Strategic Cost and Efficiency
    Cost as business activator is pivotal key to evaluate business development. Companies, such as multinational company, using technology to enhance their strategic cost and build efficient system to maximize their profit and effective turnover. In Indonesia, specifically a few national company and mostly small business, still didn’t maximize their profit through technology and integrate it with strategic cost. If a company planning and implementing their strategic cost planning by technology properly, their business more likely be survived in this outbreak season.
  • Digitalization
    In recent implementation of automation business process, AI (Artificial Intelligent) specifically, has several or even massive change in some industry. The revolutionary come from how traditional work in a division is changing to simplicity with new pattern of work. Automation help and assist a lot of complex work become more easy to handle by unskill or semi-skill employee. Nowadays, a company could has a lack of concern aboutdevelop their employee if they have intention for moving to another company. Automation in business process could easier to use and understand with no high skill required.
  • Change Business Model
    Direct selling from store or outlet still become the main pattern of consumers behaviour to supply their daily needs. We knew, online marketplace already accelerate a change in shopping habits. Ongoing outbreak make this online marketplace grow faster and become the best option to solve this problem. In the end, online business model which no required or lack required face to face interaction will always grow, remembering high effeciency offered by this business model.
  • Making Backup Plan
    No doubt, backup plan always prepared by company to face uncertain condition in business through many strategy. But, in usual way, the worst scope of business still cover politic, social, and economic area, not cover this outbreak situation. Therefore, backup plan in this occasion could be raised other plan as emergency door for business to reach sustainbility in variety of condition.
  • Workplace Innovation
    Company would be face challenge such as how supply chain operation needs could process faster or even cut some points in supply chain, how to make efficiency from traditional interaction to advance interaction using technology, and devise simpler operation ways.

Based on profit orientation which company make and impact they give to the environment and society, investor will make a note about this outbreak. Investor will review their financial condition, potential, even failure in this condition. After normal, new business, depend on kind of product or services, will be considered deeper and more comprehensive to get funding from investor. Its because high cost in lack of digital implementation or harnessing AI  factor in company will guide to ineffeciency in the future, especially for unprepared company who doesn’t well prepare for upcoming uncertainty in economy and business ecosystem. Those 5 consideration will bring many imperative innovations in the future company through technology in system, procedures and workflow.


Implementasi Teknologi (Automasi) untuk Meningkatkan Profitabilitas Perusahaan

Era digital saat ini mendorong berbagai jenis industri untuk meningkatkan efektivitas dan efisiensi dalam penggunaan sumber daya yang dimiliki perusahaan. Sumber daya yang sering berpengaruh terhadap profitabilitas perusahaan saat ini adalah kondisi keuangan perusahaan (sumber), produk atau jasa yang ditawarkan, strategi pasar, sumber daya manusia (khususnya kemampuan manajerial) dan penggunaan teknologi pada perusahaan. Ada banyak faktor lainnya, namun keempat faktor tersebut adalah faktor yang mendominasi jika melihat keadaan perusahaan-perusahaan yang berkedudukan di Indonesia. Namun, pada saat ini automasi teknologi atau digital transformation pada perusahaan memegang kendali sangat penting bagi perusahaan untuk bertahan atau meningkatkan performa perusahaan secara keseluruhan. Mengapa automasi ini sangat penting, salah satu alasan vitalnya automasi dibutuhkan untuk meningkatkan profit perusahaan. Di sisi lain, generasi baru yang biasa disebut generasi native digital pada saat ini mendapatkan informasi terkait dengan produk atau jasa melalui platform digital. Sistem paperless, digital marketing dan strategi bisnis memanfaatkan digitalisasi sangat berperan besar pada profit perusahaan.

Berdasarkan riset yang dilakukan Mckinsey & Company menunjukkan bahwa perusahaan yang melakukan transformasi digital pada  perusahaan mereka cenderung mendapatkan profit lebih besar dari ekspetasi profit yang akan didapatkan. Salah satu dari 5 praktik transformasi digital pada riset tersebut menunjukkan bahwa perusahaan yang mengalokasikan pengeluaran operasional pada transformasi digital sangat mungkin untuk melampaui ekspetasi profit sebelumnya. Pembiayaan operasional untuk mengautomasi cara kerja di perusahaan telah cukup banyak dan gencar dilakukan oleh perusahaan multinasional dan nasional di Indonesia. Tidak hanya guna mencapai produktivitas dan daya saing yang lebih baik untuk mendapat profit yang lebih besar, automasi industri khususnya, memiliki dampak terhadap aspek vital pada perusahaan. Aspek tersebut meliputi aspek keuangan, sumber daya manusia, produk dan target pasar.

Pada praktiknya, efek dari adanya implementasi teknologi (automasi) pada perusahaan selalu berpengaruh kepada Standar Operasional Prosedur perusahaan (work flow) dan penyesuaian SDM terhadap cara kerja digital yang lebih menekankan kepada kemampuan menganalisis pasar, menentukan target pasar dan bagaimana advertising yang dibuat melalui media digital menjadi tepat sasaran. Dalam menentukan arah transformasi digital yang tepat, peran para eksekutif dan manajerial sangat penting dalam menentukan transformasi dan strategi digital. Sebagai pihak yang mengambil keputusan atas roda ekonomi perusahaan dan mengetahui detail kebutuhan dan keadaan perusahaan terkini, mereka dapat menentukan inovasi dan solusi melalui automasi teknologi sebagai modal dan alat penunjang profitabilitas perusahaan. Inovasi dan automasi teknologi tersebut pada akhirnya akan selalu mempengaruhi performa keuangan perusahaan.

Tech Multinational Corporation, Digital Business Tax

Many ways multinational corporation have done for making efficiency to operation, through internal policy, market strategies, expansion in another country, product improvement, innovation and tax planning. The last one strategy is the point, how multinational corporation in technology play it aggresively or safely. And, no doubt, tax saving is one way to maximize company’s profit significantly using grey area in a set of rule each country. In fact, the paramount problem for government is they can’t imposed taxes to some kind of technology multinational firm. This issue happened because currently these firms have no physical presence in some countries, but they have high income from the user there. No operation in the area, no tax compulsion fulfillment. For instance, Google, Amazon and Facebook. They have great impact in tax debated in Europe. These firms didn’t operate in United Kingdom and France, the underscore fact is they still operate through their users with no office there. Loss of high tax potential for a long time prompted government to make a pace, advance protocol to make this loss of tax potential could be taxable.

The unilateral solution has been implemented by these two countries, UK and France. Firstly, French imposed  tax to revenue from users in their country 3% for the digital platform. Also, UK have done similiar way followed French with rate 2%. This regulation making great impact which come from United States government and giant digital business as mentioned above. Negotiation from many country still occur until now. Especially to found multilateral solution together, and OECD have been worked to get tax solution. Universal solution for this kind of technology firm which can implement to all country through treaty. As a result, the movement of these countries were strict for some behalf.

Digital business has a lot of biggest impact in social life in society, private behalf, and specifically giving income contribution to government in a country. This business has huge potential and will be more in the future. The question, what country will get the direct benefit for this business? Absolutely, the answer chiefly come from where the headquarter of the business is. Also, where this business has physical presence is the key of issue that already discussed for a long time, the subsidiary company. I think, the best strategy for a country to increase their income beside tax strategy is build the great business ecosystem. Many option could be take, for example a country might be decrease company’s tax rate, it will affect FDI (Foreign Direct Investment) to the country and might be get physical presence of the business there. This is why many country competed in tax rate. Based on OECD report since 2000, over 21% tax rate was diminished for increasing foreign investment. In the other side, it’s open chance to society to get a job, in return, government could be increase tax rate in individual with mulling other factor such as prosperity from their society. And many other strategies. One step ahead in policy is critical to prescribe direction a country to face challenges nowadays. Multilateral solution for tax would be one of the best offer to complement and enhance income strategy of a country in this digital business era.

How to Make Transfer Pricing Documentation in Indonesia

Indonesia has been issued The Minister of Finance (MoF) of Republic Indonesia Regulation No. 213/PMK.03/2016 and PER No. 29/PJ/2017. The MoF issued based on BEPS (Base Erosion and Profit Shifting) Action 13 which specifically regulate about Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting (CbCR). Based in BEPS Action 13, the format of CbCR Multinational Enterprise (MNE) Groups require such as information:

  1. List of Member of MNE, including their principal business activities each jurisdiction (specifically refer to Appendix F of MoF No. 123)
  2. Allocation of Income (specifically refer to Appendix G of MoF No. 123) each jurisdiction from all member of MNE

Company in Indonesia that must be provide transfer pricing documentation are based on criteria in link here.

Transfer Pricing Documentation (TPD) consist of some overview, analysis and explanation of transfer pricing method. Here’s some point in TPD:

  1. Executive Summary, consist of Purpose of Report and Summary of all conclusion analysis
  2. Scope of Report, consist of Coverage and Limitations
  3. Company Overview, consist of group overview, including ownership structure, business strategy and operation, and financial performance.
  4. Industry overview
  5. Function Analysis
  6. Transfer Pricing Regulation in Indonesia, consist of transfer pricing method that used by the company.
  7. Intercompany Transaction, consist of the analysis and application of transfer pricing method in the transaction.

Overall, TPD were used for examine implementation of arm’s length principle that MNE use between related parties transaction and third parties transaction.

Digital Money, The Investment of Digital World

Global transaction world recently full of digital transaction. Foreign exchange is one of easier option for making money as well as we known the value is depending on economy, politic, supply and demand of society environment. There’s too much payment gateway that our society can use it as an instrument of cashless payment which mean that digital transaction provide safety guarantees for society to save their money well. When we relate this phenomenon with any regulation in any country, we mostly found that our government do extensive in regulation for increase supervision on resident cash flow, including source of addition of assets that we have from our transaction.

Digital money, electronic cash (such as Bitcoin) offer unique solution for any investor who want to keep their money as well and don’t want pay tax for that transaction, especially when they got addition for assets undetectedly by bank or intermediaries. Each country have their own regulation to manage cash flow from their resident and detect it for economic and tax importance. In otherwise, the resident especially some kind of people don’t like to give contribution to their own country pass through tax. There’s no secret too for big company do the same thing, but usually they use individual name to do investment company importance (such as family business company for example). Digital money transaction is hard to tracing by government. This path using by individual, company or even political elite to hiding their assets in overseas, specifically in country which accept payment with digital money such as bitcoin, etc. This phenomenon was help this kind of investor to heap assest in digital as much as they could.

Digitalization is accepted easier and faster lately, dynamical of economic development was increase each second of time by invention and technology innovation. There’s make any different function from traditional transaction tracing to modern transaction tracing, here means automatically result of tracing by AI (Artificial Intelligence) to be threats for any government to control transaction of it, as how to tracing the transaction, built the international law between one country to the other country, and watch over all the network so any provider must be report the website whose used by society.

Based on data, people’s name that mentioned in Panama Papers case (2016) is mostly come from wealth class and famous people who have much money and have digital assets with high value. It’s show that much potensial of income tax or data that lost by government to trace. In government side, on the implemetation of built the frame structure for regulate the phenomenon is needed time and effort. One of the crucial thing in this case need investation for big data. Big data is one of many big corporation invest for because of the value in the future. It’s kind of big investation for government to take this phenomenon as an preparation for built the frame work structure for tracing any potential transaction related to digital transaction on people in their country, specifically Indonesia who doesn’t accept digital money such Bitcoin as tool of payment.

On the other hand, investation in digital world thrive significantly. Currently, people choose investation which give easy way to get the information about the investation, friendly to use (related to application or website), and have potensial of high return. Therefore, society start to have investation in digital world, in any kind of valuable thing  such as digital money which offer good return in the future.

Transfer Pricing Documentation Based on PMK 213/PMK.03/2016

Indonesia has been issued regulation about Transfer Pricing Documentation through Regulation Of The Minister Of Finance Of Republic Indonesia Number 213/PMK.03/2016 Concerning Type Of Documents And/Or Additional Information Which Must Be Advised By Taxpayer That Doing Transaction With Related Party And The Procedures Of Management. This regulation is needed to avoid BEPS (Base Erosion and Profit Shifting) that usually play by multinational company that associated in group company which operate around the world. The regulation is applying for fiscal year 2016 and required taxpayer to make 3 files that consist of:

  1. Master File
  2. Local File
  3. CbCR (Country by Country Report)

Master file must be contain about Business Group Structure that consist of Geographic Location of Business, Share Information and Ownership Scheme. The master file could make once for the attached of annual corporate income tax return for some fiscal year. Then, local file must be contain about Management Structure, Business Strategy, Operational Aspect, and Background of Business for identification and business operation explanation. This local file explain too about affiliated and non affiliated transaction information, and arm’s length principle information of company transaction with 5 these method:

  1. The comparable uncontrolled price method (CUP)
  2. The resale price method (RPM)
  3. The cost plus method (CPM)
  4. The profit split method (PSM)
  5. The transactional net margin method (TNMM)

Transfer Pricing Documentation (or called TP Doc) must be contain the explanation of using one of some arm’s length principle method. Here is the simple ilustration of using fair price for affiliated or non affiliated transaction.

There’s not all of company must be provide Transfer Pricing documentation. Here’s the criteria of company that doesn’t need to make transfer pricing documentation by observe this points:

  1. Doesn’t have affiliated transaction in current year
  2. Gross revenue < 50 billion in previous year
  3. Affiliated transaction of tangible good <20 billion in previous year
  4. Affiliated transaction of intangible good, services and interest < 5 billion
  5. In the current year, no have transaction with the other country that have tax tariff under tax tariff in the article 17 of Indonesia Income Tax Law

Implementasi Tarif Tax Treaty Berdasarkan PER-10 Tahun 2017

Tax treaty adalah perjanjian antara dua negara yang mengatur tentang perjanjian penghindaran pajak berganda antara negara yang satu dengan negara lainnya untuk dapat menentukan negara mana yang berhak memajaki penghasilan dari Wajib Pajak dengan memperhatikan time test (jangka waktu Wajib Pajak menetap di salah satu negara) dan jenis penghasilannya. Direktur Jenderal Pajak mengesahkan PER-10 Tahun 2017 tentang Tata Cara Penerapan Persetujuan Penghindaran Pajak Berganda yang berlaku mulai 1 Agustus 2017 lalu. Peraturan ini menyempurnakan PER-62 Tahun 2009 tentang Pencegahan Penyalahgunaan Persetujuan Penghindaran Pajak Berganda. Umumnya, tarif pajak yang dikenakan atas penghasilan yang diatur dalam tax treaty memiliki tarif pajak lebih rendah dibandingkan dengan tarif pajak yang diatur dalam Undang-Undang domestik. Oleh karena itu, untuk dapat memanfaatkan tarif pajak tax treaty, maka Wajib Pajak Dalam Negeri (WPDN) dan Wajib Pajak Luar Negeri (WPLN) perlu bekerja sama untuk memenuhi persayaratan administrative dan persyaratan tertentu untuk dapat menikmati tarif dari tax treaty. Berikut adalah poin-poin penting dari PER-10 Tahun 2017:

  1. WPDN di Indonesia yang memiliki transaksi dengan WPLN wajib menyampaikan SPT Masa PPh Pasal 26 dengan melampirkan bukti potong penghasilan Wajib Pajak Luar Negeri, Form DGT-1 atau Form DGT-2 dan COD (Certificate of Domicile) yang masih berlaku untuk periode pemotongan pajak, yaitu paling lama 12 bulan.
  2. Jika pajak yang dipotong Nihil (tidak dipotong pajak), WPDN tetap wajib membuat bukti pemotongan/pemungutan dan dilampirkan saat menyampaikan SPT Masa PPh Pasal 26 bersama dengan lampiran Form DGT-1 atau Form DGT-2 dan COD WPLN yang berlaku untuk periode pengenaan pajak.
  3. Jika terjadi kesalahan penerapan tax treaty atau COD disampaikan setelah WPDN menyampaikan SPT Masa PPh Pasal 26 untuk masa terutangnya pajak, WPLN tetap dapat diberikan Manfaat P3B melalui mekanisme Pengembalian Kelebihan Pembayaran Pajak yang seharusnya tidak terutang.
  4. Jika WPLN yang menerima penghasilan dari Indonesia tidak menerima manfaat dari tax treaty atau WPDN selaku pemotong/pemungut tidak menyampaikan SPT Masa atas pajak yang terutang, maka WPLN tetap dapat diberikan manfaat tax treaty melalui mekanisme Mutual Agreement Procedure (MAP).
  5. Format Form DGT-1 dan Form DGT-2 yang harus dibuat oleh WP terdapat pada lampiran PER-10 tahun 2017.

Era Keterbukaan Informasi Keuangan untuk Kepentingan Perpajakan

Sejak dikeluarkannya Undang-Undang No. 11 Tahun 2016 tentang Pengampunan Pajak dan PMK No. 118/PMK.03/2016 tentang Peraturan Pelaksaaan Undang-Undang No. 11 Tahun 2016 tentang Pengampunan Pajak (yang kemudian disempurnakan dengan PMK No. 165/PMK.03/2017), database internal Direktorat Jenderal Pajak terkait data harta dari Wajib Pajak semakin luas. Beberapa implementasi kebijakan dan peraturan baru berikut ini juga ikut mengungkapkan lokasi dan aliran harta serta sumber penghasilan dari Wajib Pajak yang selama ini ditutupi oleh Wajib Pajak:

  1. Munculnya Kasus Panama Papers yang mengungkap keberadaan harta Wajib Pajak yang selama ini disembunyikan dan tidak dilaporkan dalam SPT Tahunan.
  2. Double Taxation Conventions (DTC) atau Tax Information Exchange Agreements (TIEA) antara Indonesia dan negara lain.
  3. Automatic Exchange of Information (AEOI) Indonesia dengan dikeluarkannya Peraturan Pemerintah No. 1 tahun 2017 tentang Akses Informasi Keuangan untuk Kepentingan Perpajakan.
  4. Common Reporting Standard (CRS) yang diterbitkan oleh OECD dan disetujui oleh lebih dari 100 negara, dimana Indonesia akan mengimplementasikan standar pelaporan ini pada tahun 2018 dan diadopsi dalam Undang-Undang.

Beberapa poin di atas merupakan sumber informasi yang dapat diakses oleh Direktorat Jenderal Pajak untuk mengetahui Wajib Pajak yang belum patuh melaporkan kewajiban perpajakannya pada SPT Tahunan Orang Pribadi maupun Badan. Berdasarkan Pasal 4 ayat (2) dan Pasal 17 ayat (1) PMK No. 70 Tahun 2017 tentang Petunjuk Teknis Mengenai Akses Informasi Keuangan untuk Kepentingan Perpajakan, lembaga keuangan yang menjalankan usaha sebagai:

  • Lembaga Kustodian
  • LembagaSimpanan
  • Perusahaan Asuransi
  • Entitas Investasi

diwajibkan untuk melakukan pelaporan berupa informasi dari Wajib Pajak secara otomatis. Rekening keuangan Wajib Pajak yang wajib dilaporkan berdasarkan pada pasal 19 ayat (4) PMK No. 70 Tahun 2017 adalah sebagai berikut.

  1. Sektor Perbankan : bagi orang pribadi adalah agregat saldo paling sedikit 1 miliar dan bagi badan tanpa adanya saldo minimum untuk dilaporkan (semua badan wajib dilaporkan tanpa memandang jumlah dari saldo badan di perbankan).
  2. Sektor Perasuransian : paling sedikit pertanggungan 1 miliar.
  3. Sektor Perkoperasian : paling sedikit agregat saldo 1 miliar.
  4. Sektor Pasar Modal : tanpa batasan saldo minimum (semua wajib dilaporkan)

Kewajiban lembaga keuangan untuk melaporkan harta dari Wajib Pajak tersebut menyulitkan Wajib Pajak untuk menyembunyikan harta dan melakukan penghindaran pajak atas penghasilan yang diterima, tidak dikenakan pajak dan tidak dilaporkan di dalam SPT Tahunan. Mendukung akses informasi keuangan Wajib Pajak tersebut, perkembangan implementasi FATCA (Foreign Account Tax Compliance Act) Amerika Serikat untuk mengatasi upaya penghindaran dan pengelakan pajak yang menyembunyikan harta pada offshore financial center mendorong OECD untuk menerbitkan peraturan Common Reporting Standard (CRS) untuk mengatasi hal yang serupa. Perbedaannya, CRS lebih bersifat umum dibanding FATCA karena disesuaikan dengan kebutuhan setiap negara partisipan. Keterbukaan informasi Wajib Pajak dari sisi peraturan nasional maupun internasional telah mempersempit ruang gerak Wajib Pajak untuk menyembunyikan harta maupun penghasilannya di negara lain untuk tidak dikenakan pajak, sehingga saat ini era keterbukaan informasi Wajib Pajak untuk kepentingan perpajakan telah dimulai.

Tax Haven sebagai Tempat Pengalihan Penghasilan

Tax haven adalah istilah bagi negara yang menerapkan terif pajak yang tergolong rendah dibandingkan dengan negara lain. Bahkan, beberapa negara tax haven memberikan fasilitas pajak berupa tarif 0% bagi siapa saja yang ingin berinvestasi di negara tax haven. Tarif 0% atas offshore income dan profit dapat dijumpai di beberapa negara seperti Caymand Island, British Virgin Island dan kota Panama. Istilah tax haven di Indonesia cukup meluas setelah kasus Panama Papers dan Paradise Papers mencuat ke publik. Umumnya, perusahaan multinasional menginvestasikan dana mereka untuk membuat perusahaan Special Purpose Company (perusahaan yang didirikan karena memiliki tujuan khusus) dan memiliki seluruh kontrol perusahaan tersebut di negara tax haven. Hal tersebut dimaksudkan untuk mendapatkan keuntungan dari fasilitas perpajakan dan perlindungan hukum di negara tax haven.

Perusahaan multinasional biasanya mengalihkan penghasilan mereka ke negara tax haven untuk melakukan penghematan beban pajak (tax saving) dan memperbesar keuntungan grup perusahaan tersebut secara global. Metode lain yang digunakan untuk memperbesar penghasilan grup perusahaan multinasional adalah dengan melakukan perubahan skema transaksi lintas negara melalui negara tax haven. Penghasilan dialihkan ke negara-negara tax haven, sementara biaya-biaya dialihkan ke negara yang memiliki tarif pajak tinggi. Skema tersebut menyebabkan beberapa perusahaan mengalami kerugian atau memiliki penghasilan yang kecil secara fiskal meskipun perputaran pendapatan perusahaan tersebut sangat tinggi. Tidak jarang biaya-biaya yang dibebankan kepada beberapa perusahaan dalam grup di negara dengan tariff pajak tinggi adalah biaya-biaya perusahaan yang berdiri di negara tax haven.

Cross border transaction (transaksi lintas batas) yang melibatkan banyak negara umumnya sangat sulit untuk disentuh oleh Kantor Pajak, khususnya untuk melakukan pemajakan atas penghasilan yang diterima oleh perusahaan grup. Perbedaan hukum perpajakan setiap negara menjadi salah satu kesulitan bagi aparat pajak untuk mengidentifikasi penghindaran pajak (tax avoidance) atau pengelakan pajak (tax evasion), sehingga masing-masing negara mengatur mengenai Transfer Pricing Documentation dan Controlled Foreign Company Rules (CFC Rules) bagi transaksi pihak-pihak yang memiliki hubungan istimewa seperti perusahaan grup.

Transformation of Taxation in Indonesia

Indonesia has been started transformation of tax policy in this year. After Tax Amnesty program, Indonesia made new regulation for prevent tax avoidance and increase tax compliance of taxpayer in transfer pricing, controlled foreign company and treaty shopping with these regulation:

  1. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 213/PMK.03/2016 Concerning Type Of Documents And/Or Additional Information Which Must Be Advised By Taxpayer That Doing Transaction With Related Party And The Procedures Of Management.
  2. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 70/PMK.03/2017 Concerning Technical Guide for Financial Information Access to Tax Interests.
  3. Regulation Of Director General of Taxes Number 10/PJ/2017 Concerning Procedures For The Application Of Double Taxation Provisions.
  4. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 107/PMK.03/2017 Concerning The Determination of Dividend and the Calculation of the Calculation by Domestic Taxpayer on Capital Participation in Overseas Enterprises Other than Business Entities Selling Stock in the Stock Exchange, as we known as CFC Rules.
  5. Circular Letter Number 20/PJ/2017 Concerning Monitoring Taxpayer After Tax Amnesty Period.

According to all the new regulation, Indonesia has been used the performance of the regulation to increase the extra effort of Directorate General of Tax. Tax revenue of Indonesia’s state is the main point of the extra effort. The government using implementation all of new regulation that enacted recently for fulfill the target.

Automatic Exchange of Information is one of the regulation that can be support tax amnesty for assests declaration. It will be one system to increase compliance of taxpayer in Indonesia that the most of rich people in Indonesia invest or save their current and non current assets overseas. Thus, the income of Indonesia’s Taxpayers can be taxable in Indonesia. The reasons of the non compliance system of taxpayers always related to the tax tariff in Indonesia. Meanwhile the comparison of the tax tariff in Indonesia and the other country is sufficient significant. For example is tax tariff in ASEAN country, Indonesia is the one that have high tax tariff than the other country, such as Singapore, Thailand and Hongkong.

In the classical bureaucrat, without contraprestation to the taxpayers which paying tax, here some factor the taxpayers don’t want to pay tax to the government:

  1. Untrusted to the government to manage money in Indonesia, for example because of influence of negative news that taxpayers listen from media (TV, radio or newspaper) about the civil servant that do corruption, thus taxpayers don’t trust to government in Indonesia for manage country’s finance.
  2. Non-Contraprestation for taxpayers and nothing benefit that taxpayers can get from pay tax to the country. No direct reward for the taxpayers is according to The Law of The Republic of Indonesia Concerning General Provisions and Procedures of Taxation Article 1 point 1 “Tax is compulsory contribution to the state which owed by an individual or corporate that is forced by Law, with no direct reward, and used for state purposes for the maximum prosperity to the peoples.” This article explain about the taxpayers didn’t get direct reward if paying tax.
  3. The rules of thinking of taxpayers, for example is when the taxpayer hear or know about multinational firm that play any method to don’t paying tax with the actual amount (like do tax avoidance and tax evasion), the other local business firm can thinking that avoid paying tax is an unusual thing and it can be influence their tax compliance.