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Recent Developments

The Government of Indonesia recently issued a new regulation on determination of a permanent establishment. In the new regulation, the government provides details to determine whether a foreign individual/body has a permanent establishment in Indonesia.

Implications for Taxpayers

The new regulation provides details on how to determine whether a foreign individual/body has a permanent establishment in Indonesia. Therefore, now there is a clearer guideline for a foreign individual/body to determine whether it has a permanent establishment or not.

If a foreign individual/body in Indonesia meets the criteria of a permanent establishment, the foreign individual/body is required to obtain a tax ID number. In addition, if it meets the criteria of a taxable entrepreneur for VAT purposes, the foreign individual/body must register itself to be a taxable entrepreneur for VAT purposes.

What the Regulation Says  

On 1 April, the Government of Indonesia issued Minister of Finance Regulation No. 35/PMK.03/2019 on Determination of Permanent Establishment ("MoF Regulation 35"). The regulation came into force on the issuance date.

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