OJK and Tax Authority Collaborate on PSAK 117 Implementation

Coordination for Tax Adjustment

The Financial Services Authority (OJK) has been coordinating with the Directorate General of Taxes (DJP) to prepare for adjustments in tax regulations following the mandatory implementation of PSAK 117 for all insurance and reinsurance companies. This new accounting standard becomes effective for quarterly financial reports starting in 2025.

Implementation Timeline

Ogi Prastomiyono, Head of Insurance, Guarantee, and Pension Fund Supervision at OJK, stated that the new tax regulations related to PSAK 117 are expected to be implemented starting from the 2026 tax year. This timeline allows for proper alignment between the financial reporting and tax compliance requirements.

Impact on Insurance Sector

The implementation of PSAK 117 represents a significant change in financial reporting for insurance companies, requiring them to adopt new accounting practices that better reflect their financial positions and performance. The coordination between OJK and DJP is crucial to ensure a smooth transition and to minimize potential disruptions to the industry.