Jumat, Januari 11, 2019

Government to Introduce New Regulation on the Implementation of Foreign Tax Credits

The government recently issued Regulation of the Minister of Finance No. 192/PMK.03/2018 on the Implementation of Tax Credit for Foreign Income (“Regulation 192/2018”), which further increases the ease and legal certainty of foreign tax credits (Kredit Pajak Luar Negeri – “KPLN”) and which should eventually ensure capital export neutrality and prevent double taxation. Regulation 192/2018 replaces Decree of the Minister No. 164/KMK.03/2002 which addressed the same matters.
Regulation 192/2018 has been issued for several reasons, including: 1) Simplifying the processes involved in the reporting of foreign tax; 2) Determining countries from which foreign income is sourced; 3) Determining the types of incomes which are eligible to receive KPLN; and 4) Determining the limits of tax credits.
In essence, the following matters are specifically regulated under Regulation 192/2018: 1) The amount of foreign income tax which is allowed to be credited; 2) Credit for spouses which involves separate taxation; 3) Administrative requirements; 4) KPLN based on trust income; 5) Tax credits from dividends; and so forth.
For more on this story, see Hukumonline: “Ini Pokok-pokok Revisi Aturan Kredit Pajak Luar Negeri”.

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The government recently issued Regulation of the Minister of Finance No. 192/PMK.03/2018 on the Implementation of Tax Credit for Foreign Income (“Regulation 192/2018”), which further increases the ease and legal certainty of foreign tax credits (Kredit Pajak Luar Negeri – “KPLN”) and which should eventually ensure capital export neutrality and prevent double taxation. Regulation 192/2018 replaces Decree of the Minister No. 164/KMK.03/2002 which addressed the same matters.
Regulation 192/2018 has been issued for several reasons, including: 1) Simplifying the processes involved in the reporting of foreign tax; 2) Determining countries from which foreign income is sourced; 3) Determining the types of incomes which are eligible to receive KPLN; and 4) Determining the limits of tax credits.
In essence, the following matters are specifically regulated under Regulation 192/2018: 1) The amount of foreign income tax which is allowed to be credited; 2) Credit for spouses which involves separate taxation; 3) Administrative requirements; 4) KPLN based on trust income; 5) Tax credits from dividends; and so forth.
For more on this story, see Hukumonline: “Ini Pokok-pokok Revisi Aturan Kredit Pajak Luar Negeri”.

......