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15 March 2018

Indonesia issues debt-to-equity ratio implementing regulation

Indonesia's Director General of Taxation (the DGT) has issued DGT Regulation No. 25/PJ/2017 (PER-25) providing implementing regulations on Indonesia's thin capitalization rules by applying a 4:1 debt-to-equity ratio (DER). The primary rules for DER are contained in Minister of Finance Regulation No. 169/PMK.010/2015 (PMK-169). PER-25 provides some clarity on the implementation of thin capitalization rules in Indonesia and includes an obligation to report the DER calculation and private overseas loan details to the DGT as part of the company's income tax return.

A Global Tax Alert, attached below, provides additional details.

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Document ID: 2018-0576

 

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