Provisions on the Disclosure of Financial Information for Taxation Purposes Revised

Offering a rapid response to public concerns regarding the minimum threshold for financial-account disclosure, the Ministry of Finance (“Ministry”) has issued Regulation No. 73/PMK.03/2017 (“Regulation 73/2017”) on the Amendment to Ministry Regulation No. 70/PMK.03/2017[1] on Technical Guidelines for Access to Financial Information for Taxation Purposes (“Regulation 70/2017”).
 
In a nutshell, Regulation 73/2017 revises a number of provisions which relate to the following areas:
 

1.	The minimum thresholds for reported financial accounts;
2.	Electronic requests for data; and
3.	The delegation of technical regulations.

 
 
Minimum Thresholds for Reported Financial Accounts
 
Regulation 70/2017 had initially set out a number of different minimum thresholds for financial accounts which were required to be reported by financial-service institutions, other service institutions and other entities (collectively referred to as “Reporters”), either through the Automatic Exchange of Information (“AEoI”) mechanism or through the domestic disclosure of financial information mechanism.[2]
 
In terms of the AEoI mechanism, Regulation 70/2017 had required the reporting of all financial accounts, as well as subsequent exchanges of information, with the exception of preexisting financial accounts (i.e. any accounts which were opened prior to 30 June 2017) which were owned by single foreign entities and which had total values amounting to ≤ USD 250,000.[3] Regulation 73/2017 basically sets out the same stipulations, however it also clarifies that this exception also applies to all preexisting financial accounts on condition that they do not exceed the abovementioned financial threshold on the following dates:
 

1.	30 June 2017;
2.	31 December 2017; and
3.	31 December of each subsequent year after 2017

 
In terms of the domestic disclosure mechanism, Regulation 70/2017 originally set a threshold of IDR 200 million for the reporting of various types of financial accounts. However, this threshold was deemed to be unsupportive of the lower- and middle-class sections of the economy. Moreover, such a low threshold would have meant that the number of financial accounts that would have had to have been scrutinized by the tax authorities would have been simply overwhelming, i.e. somewhere in the region of 2.3 million accounts.[4]
 
As a result of this dilemma, Indonesia’s Minister of Finance, Sri Mulyani, ultimately decided to increase the minimum threshold up to IDR 1 billion, a figure which has now been incorporated under Regulation 73/2017. Details of the various types of financial accounts which are now required to be reported through the domestic disclosure mechanism and their thresholds are set out in the table below:[5]
 

Financial Sector	Regulation 70/2017	Regulation 73/2017
Banking	1. Financial accounts owned by individuals with total values amounting to ≥ IDR 200 million or its equivalent; or 2. Financial accounts owned by entities (without any minimum total value).	1. Financial accounts owned by individuals with total values amounting to ≥ IDR 1 billion or its equivalent; or 2. Financial accounts owned by entities (without any minimum total value).
Insurance	Insurance policies with insurance coverage amounting to ≥ IDR 200 million or its equivalent.	Insurance policies with insurance coverage amounting to ≥ IDR 1 billion or its equivalent.
Cooperatives	Financial accounts owned by individuals or entities with total values amounting to ≥ IDR 200 million or its equivalent.	Financial accounts owned by individuals or entities with total values amounting to ≥ IDR 1 billion or its equivalent.
Capital Market and Futures Trading	Any financial accounts owned by individuals or entities (without any minimum total value).	Any financial accounts owned by individuals or entities (without any minimum total value).

 
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