Wednesday, 11 December 2019 | 06:36 WIB

Assessment of the Implementation of the Indonesian MAP

Assessment of the Implementation of the Indonesian MAP (special)

JAKARTA, NETRALNEWS.COM - Indonesia, along with six other jurisdictions (Russia, Hong Kong, Saudi Arabia, Brazil, China, and Bulgaria), have been assessed by the Forum on Tax Administration (FTA) Mutual Agreement Procedure (MAP) for the implementation of the MAP on 26-28 June 2019.

In the MAP Peer Review, there are 21 evaluation elements that are grouped into four parts, namely part A Preventing Disputes consists of two assessed elements, part B Availability and Access To MAP consists of ten elements that are assessed, part C Resolution of MAP Cases consisting of six elements assessed, and the D Implementation of MAP Agreement section that consists of three elements being assessed.

John Hutagaol, Director of International Taxation and also head of the Indonesian delegation in the FTA MAP Forum, explained that the purpose of this peer review is to assess whether the implementation of MAP in each jurisdiction has met international best practice requirements with reference to minimum standards and standards implementation of BEPS Item 14 MAP. If all the jurisdictions of the Inclusive Framework on BEPS which currently reaches 129 jurisdictions have implemented the minimum standards, they will encourage the realization of effectiveness and efficiency in implementing MAP globally. This is the ideal condition that we want to realize together, besides providing legal certainty for taxpayers, something that taxpayers covet and tax authorities also want in the era of openness for tax purposes.

Furthermore, John added that the assessment of the implementation of the MAP has two stages, for the first stage it has begun since the end of 2016 and is planned to end in 2021. The second stage has already begun in mid-2018.

Given the large number of jurisdictions, they are grouped into batches, and for this first stage, Indonesia together with six other jurisprudents are grouped in the seventh batch.

Regarding the implementation of the MAP assessment, John explained that there are many benefits for each tax authority, among others we can find out what other jurisdictions have done in the implementation of MAP, meaning that there is transparency among tax authorities so that mutual respect arises among fellow tax authorities, getting valuable input for improvement and improvement in the implementation of MAP.

He continued that from the results of his observations, there is no one jurisdiction that has been perfect in the implementation of MAP, even jurisdictions such as the United States, Japan, Germany, China and Australia need to make repairs and then they will be reassessed at the second stage to find out the pogress or follow up repairs.

John said the scope of the overall improvement according to the recommendations of the FTA MAP Forum for each jurisdiction is different from each other because the taxation system and policies are different. "I am optimistic that each jurisdiction such as Saudi Arabia, Russia and Indonesia has a high commitment to meet the minimum standard requirements in the implementation of MAP, and this is a global consensus that must be respected and implemented to respond to the global challenges in taxation in the era of openness for taxation purposes," he said.

Regarding the assessment of Indonesia, John explained that the implementation of MAP in Indonesia had been going well, and to meet the minimum standard requirements there were several improvements that we would make especially needing to improve or update regulations governing the provisions of Roll Back. Actually, this has been regulated in the current PMK, but it needs to be more detailed according to the recommendations of the FTA MAP Forum Secretary.

John is optimistic that Indonesia can meet the recommendations of the FTA MAP Forum on the second phase of the assessment because the Directorate General of Tax of the Ministry of Finance from 2017 to 2024 is implementing a large tax reform program that also includes tax policy, so that the policy improvement process can be carried out thoroughly.