Indonesia has also implemented Country-by-Country (CbC) reporting requirements as part of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan. The CbC reporting framework aims to increase transparency in international tax matters and prevent multinational corporations from shifting profits to low-tax jurisdictions.

In Indonesia, multinational corporations with a consolidated group revenue of at least IDR 11 trillion in the previous fiscal year are required to file a CbC report. The report must be submitted within 12 months from the end of the fiscal year to the Director-General of Taxes.

The CbC report should provide detailed information on the multinational group’s activities, profits, and taxes paid in each jurisdiction where it operates. This includes information on the identity and tax residency of the constituent entities of the multinational group, their business activities, and the amount of revenue, profit before income tax, income tax paid and accrued, and the number of employees in each jurisdiction.

Multinational groups with Indonesian entities that are required to prepare and file a CbC report must appoint a reporting entity to file the report on behalf of the group. The reporting entity should be the ultimate parent entity of the multinational group, unless:

• The ultimate parent entity is not required to file a CbC report in its jurisdiction of tax residence, or
• The tax authorities of the jurisdiction of tax residence of the ultimate parent entity have not entered into an agreement for the exchange of CbC reports with the Indonesian tax authorities.

In these cases, another constituent entity of the multinational group may be designated as the reporting entity.

The CbC report should be prepared in Indonesian or English and should follow the standard template provided by the Indonesian tax authorities. The report must also be accompanied by a sworn statement from the reporting entity.

Failure to comply with CbC reporting requirements in Indonesia may result in penalties. The penalty for non-compliance with the CbC reporting requirements is up to IDR 1 billion. Moreover, the Indonesian tax authorities may also exchange the CbC report with other tax jurisdictions where the multinational group operates.

In summary, Indonesia requires multinational groups with a consolidated group revenue of at least IDR 11 trillion to file a CbC report that provides detailed information on the activities, profits, and taxes paid by the multinational group in each jurisdiction where it operates. Failure to comply with CbC reporting requirements may result in penalties, and multinational groups should appoint a reporting entity to file the CbC report.