Indonesia Implements New Double Tax Avoidance Regulations

Enhanced Compliance Measures for Foreign Taxpayers

The Directorate General of Taxes (DJP) under the Ministry of Finance has officially announced the implementation of Minister of Finance Regulation No. 112/2025, which updates the procedures for applying Double Tax Avoidance Agreements (P3B). This new regulation introduces an updated format for the DGT Form that foreign taxpayers must use when claiming benefits under P3B agreements.

Key Changes in Tax Procedures

The new regulation represents a significant update in Indonesia's tax administration practices, particularly affecting foreign entities operating in the country. Key aspects of the change include:

1. Updated DGT Form format that must be used by foreign taxpayers
2. Enhanced documentation requirements for P3B claims
3. Streamlined procedures for tax benefit applications
4. Improved compliance measures for international taxpayers

Implications for Foreign Investors

The introduction of the new DGT Form format requires foreign investors to adapt their tax compliance procedures. While this change may require initial adjustments, it is expected to lead to more efficient tax administration in the long term. The DJP's move is part of broader efforts to modernize Indonesia's tax system while maintaining compliance with international tax standards.