Indonesia has been in the headlines with its 2022 G-20 presidency from December 2021 through November 2022. During its presidency, Indonesia was supportive of international community tax initiatives such as carbon tax policies and the global minimum tax. Domestically, the Indonesian government introduced tax reforms to update its tax systems and align its tax policies with international standards. In an article published in Tax Notes International, Baker McKenzie’s Ria Muhariastuti and Harizka Rizal discuss the Indonesian government’s efforts to reform its tax policies to meet international standards.
On 20 December 2022, the Indonesian government issued Government Regulation No. 55 of 2022 on the Adjustment of Regulations in the Field of Income Tax (“GR 55/2022”). This regulation is one of a series of government regulations issued in December 2022 as the implementing regulations of Law No. 7 of 2021 on Tax Regulation Harmonization (“HPP Law”). Several regulations related to income tax (i.e., GR 18/2009, GR 23/2018, and GR 30/2020) are no longer valid, and have been consolidated through the issuance of GR 55/2022. GR 55/2022 mainly provides confirmation and a detailed explanation of income tax provisions under the HPP Law. These include income tax on benefits-in-kind, anti-tax avoidance measures, and international tax agreements.