Selasa, Juni 15, 2021

Govt. Revises Provisions on the Utilization of Book Value for Business Expansions

The Minister of Finance ("Minister") recently issued the second amendment to Regulation of the Minister No. 52/PMK.010/2017 on the Utilization of Book Value for Transfers and the Gaining of Assets During Mergers, Consolidations, Expansions and the Acquisition of Businesses through the enactment of Regulation of the Minister No. 56/PMK.010/2021 ("Amendment").
Under the Amendment, the types of business expansions that are permitted to utilize book value now include the following: 1) Separation of one domestic corporate taxpayer whose capital is divided into shares through the transfer of some of said assets and related liabilities to one or more domestic corporate taxpayer whose capital is divided into shares. This action should be carried out without the formation of any new business entity and without the liquidation of the previous business entity and is defined as a business split, as addressed under various regulations on value-added tax; or 2) Any series of actions aimed at separating the businesses of two or more domestic corporate taxpayers whose capital is divided into shares through the transfer of some of the assets and liabilities of the separated businesses and the combining of the separated businesses into one business entity without the liquidation of the previous business entity.
The above taxpayers which are permitted to use book value during any business expansions break down as follows: 1) Taxpayers that are state-owned enterprises (badan usaha milik negara - "BUMN") and that receive additional Republic of Indonesia capital participation (penyertaan modal Negara Republik Indonesia) if the expansion in question relates to the establishment of a BUMN holding company; or 2) Corporate taxpayers that engage in business separations in connection with the restructuring of BUMN under the following conditions: a) Said restructuring must be initiated by the start of the 2021 tax year at the latest; b) Any related transfer of assets should not be carried out through asset sales, purchases or exchanges; and c) All such restructuring and asset transfers must first be approved by the Minister of State Owned Enterprises.
The Amendment has been in force since 4 June 2021.

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The Minister of Finance ("Minister") recently issued the second amendment to Regulation of the Minister No. 52/PMK.010/2017 on the Utilization of Book Value for Transfers and the Gaining of Assets During Mergers, Consolidations, Expansions and the Acquisition of Businesses through the enactment of Regulation of the Minister No. 56/PMK.010/2021 ("Amendment").
Under the Amendment, the types of business expansions that are permitted to utilize book value now include the following: 1) Separation of one domestic corporate taxpayer whose capital is divided into shares through the transfer of some of said assets and related liabilities to one or more domestic corporate taxpayer whose capital is divided into shares. This action should be carried out without the formation of any new business entity and without the liquidation of the previous business entity and is defined as a business split, as addressed under various regulations on value-added tax; or 2) Any series of actions aimed at separating the businesses of two or more domestic corporate taxpayers whose capital is divided into shares through the transfer of some of the assets and liabilities of the separated businesses and the combining of the separated businesses into one business entity without the liquidation of the previous business entity.
The above taxpayers which are permitted to use book value during any business expansions break down as follows: 1) Taxpayers that are state-owned enterprises (badan usaha milik negara - "BUMN") and that receive additional Republic of Indonesia capital participation (penyertaan modal Negara Republik Indonesia) if the expansion in question relates to the establishment of a BUMN holding company; or 2) Corporate taxpayers that engage in business separations in connection with the restructuring of BUMN under the following conditions: a) Said restructuring must be initiated by the start of the 2021 tax year at the latest; b) Any related transfer of assets should not be carried out through asset sales, purchases or exchanges; and c) All such restructuring and asset transfers must first be approved by the Minister of State Owned Enterprises.
The Amendment has been in force since 4 June 2021.

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