The agreement will not only affect Indonesia but also all countries. In addition, we are following it up and still have time for more detailed discussions since the agreement will come into effect in 2023.Bali (ANTARA) - The global agreement on minimum taxes for multinational companies will affect the incentive values given to business players, such as tax allowance or tax holiday, the Finance Ministry's tax compliance expert staff, Yon Arsal, stated.
“The agreement will not only affect Indonesia but also all countries. In addition, we are following it up and still have time for more detailed discussions since the agreement will come into effect in 2023,” Arsal noted during the media gathering of the Taxation Directorate General here on Thursday.
The Finance Ministry, Coordinating Ministry for Economic Affairs, and Investment Coordinating Board (BKPM) will review together the impacts of the global agreement on the tax incentives utilized for gaining traction among business players to invest in Indonesia, according to the staff.
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“Not only tax holiday and tax allowance, such a global tax consensus will also have an impact on other incentives. Of course, we will discuss and expect that we would not sacrifice our goals in boosting investment, although there might be any policies changed,” he highlighted.
The ministry’s Fiscal Policy Board Head, Febrio Kacaribu, earlier stated that as many as 136 G20 countries had agreed on the Two Pillar Solutions to meet the taxation challenges in digital economy.
One of the focus areas of the G20 forum continued to Indonesia’s Presidency in 2022 is the taxation reform by realizing the Two Pillar Solutions through Multilateral Convention, Kacribu revealed.
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“The first and second pillars will be stipulated in the multilateral convention to be signed in the middle of 2022 and will be effective in 2023. Hence, Indonesia’s G20 presidency in 2022 is crucial to help meet the target on time,” he expounded.
In the second pillar, multinational companies, with an annual gross turnover of EUR750 or more, will be charged a minimum tax rate.
The minimum tax aims to eliminate the unfair tariff competition among G20 countries.
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The second pillar, known as the Global Anti-Base Erosion (GLoBE) rules, aims to ensure that multinational companies be charged a minimum tax rate of 15 percent.
In addition, based on the OECD report, the second pillar will protect the right of developing countries to impose taxes on certain incomes — such as interests and royalties — to a minimum of nine percent.
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Translator: Sanya Dinda, Juwita Trisna
Editor: Fardah Assegaf
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