The governments of Indonesia and Singapore recently reached an agreement to update the Indonesia-Singapore tax treaty. The amendment introduces some changes to the tax rate for certain types of income, such as royalty and branch profit tax, and also regulates certain aspects that were not regulated in the previous tax treaty, such as capital gains and tax avoidance.
The Indonesian tax authority indicated that the amendment was made to adjust with the current landscape of international taxation and the latest economic developments.
What the Regulation Says
The amendment of the Indonesia-Singapore tax treaty was signed on 4 February, five years after the initial negotiation started. The tax treaty amendment has not been ratified by the government yet, so it is not in force. But we understand that the Indonesian tax authority hopes that the ratification process can be completed soon, so that the amendment can be immediately implemented.