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a. G20
G20 is a multilateral cooperation forum established in 1999 consisting of 19 countries and the European Union (EU) with middle to high income ranging from developing to developed countries. G20 represents more than 2/3 of the world’s population, 75% of global trade, and 80% of global GDP. G20 has no permanent leader and the presidency function is held by one of the members for one year. Indonesia has been the G20 presidency since October 31, 2021 to November 16, 2022.
The G20 forum has two discussion tracks, namely the Finance Track and the Sherpa Track. The Ministry of Finance and Bank Indonesia are involved in the Finance Track discussions which include fiscal, monetary and real sectors policy, infrastructure investment, financial regulation, financial inclusion, and international taxation.
DGT plays an active role in the discussion of Issue Notes or draft Communiques related to international tax issues.
The international tax issues discussed are as follows.
b. Asia Initiative
Since the end of 2021, Indonesia has been actively involved in the formation of a regional initiative in the field of tax transparency and information exchange in the Asia region. Indonesia’s involvement in the process of 1) The International Tax Package, which
discusses the Two-Pillar Solution, aims to address the international tax issues arising from globalization and digitalization. Pillar One seeks to allocate the right to tax business profits from the residence country to the market location country without being based on a physical presence basis. Pillar Two seeks to address tax competition through the provision of low corporate tax rates or incentives. Pillar Two will ensure that entities of multinational companies pay a minimum of 15% tax in each country/jurisdiction where the company conducts its business activities.
2) Tax Policy and Development discusses the challenges of tax policy and administration faced by developing countries, specifically as a result of Covid-19. Domestic Resource Mobilization (DRM) needs to be strengthened and implemented consistently to increase revenue and promote sustainable growth.
The G20 ensures that there is ongoing support in the form of tax capacity building.
In this regard, the G20 has held a Ministerial Symposium on Tax and Development.
The relevant results of the activity are included in the G20/OECD Roadmap on Developing Countries and International Taxation published in October 2022.
3) Tax Policy and Gender Equality discusses gender equality and women’s empowerment in tax policy to support inclusive growth.
In January 2022, the G20/OECD Inclusive Framework on BEPS adopted the Tax Policy and Gender Equality report. The report analyzes various aspects of the approaches applied in different countries related to tax policy and gender that can serve as a basis for the G20 for further work in this area.
4) Tax Transparency discusses the global implementation of tax transparency and information exchange standards. The G20 supports the development of the implementation of tax transparency, including regional initiative such as the Asia Initiative.
The G20 also welcomes the Crypto-Asset Reporting Framework and the amendment of the Common Reporting Standard, which are integral additions to the global standard for automatic information exchange.
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Throughout 2022, Indonesia, represented by DGT, played a role in organizing or being actively involved in several Asia Initiative meetings, namely:
1) The 1st Asia Initiative Meeting
The meeting of the heads of tax authorities was held on February 16, 2022, in Jakarta as part of the Indonesia’s G20 Presidency 2022 Finance Track , which is one of the side events of the Finance Ministers and Central Bank Governors Meeting. Indonesia acted as the host, working with the Global Forum Secretariat, which is the initiator and secretariat of the Asia Initiative.
The meeting was held in a hybrid format led by Director General of Taxes Suryo Utomo, and attended by 49 delegates from 18 Asia jurisdictions and representatives from international organizations including the Global Forum OECD, the Asian Development Bank (ADB), the Study Group on Asian-Pacific Tax Administration and Research (SGATAR), and the World Bank Group.
The results of the 1st Asia Initiative Meeting are as follows: a) Director General of Taxes Suryo Utomo was elected as the Chair of the Asia Initiative 2022 and one of the Co-Chairs of the Asia Initiative 2023; b) the delegates agreed on two documents, namely the draft political declaration of the Asia Initiative and the governance proposal of the Asia Initiative.
2) Asia Initiative Ministerial Meeting and Signing Ceremony
The event was held on July 14, 2022, in Bali and was also part of the Indonesia’s G20 Presidency 2022 Finance Track. The Asia Initiative Ministerial Meeting and Signing Ceremony was attended by Finance Ministers and government officials at the ministerial level from 9 jurisdictions that were willing to sign the Bali Declaration.
It serves as a political agreement and commitment to join as members of the Asia Initiative. The jurisdictions that were willing to sign the Bali Declaration are Brunei Darussalam, India, Indonesia, Japan, South Korea, Maldives, Malaysia, Singapore, and Thailand. In addition, Hong Kong (SAR), Macau (SAR), Pakistan, and the People’s Republic of China also signed the Bali Declaration even though they were not present in person.
On the same occasion, Minister of Finance Sri Mulyani Indrawati chaired a high-level meeting attended by finance ministers and ministerial level state officials, to discuss the acceleration of tax transparency and EOI agenda in the Asian region. The result of the meeting was that the finance ministers and state officials present agreed that political commitment and support from jurisdictional leaders was needed as a signal of willingness to join in global transparency cooperation in order to fight tax evasion and illicit financial flows.
3) The 2nd Asia Initiative Meeting
As Chair of the Asia Initiative, Indonesia, represented by DGT, hosted a meeting of tax authority leaders from August 31 to September 2, 2022, in Bali. The Director General of Taxes, represented by Assistant to the Minister of Finance for Tax Compliance Affairs Yon Arsal, acted as the meeting leader.
Overall, the meeting was attended by tax authority leaders or their representatives from 14 countries/
jurisdictions as well as several delegations from international organizations that are partners of the Asia Initiative. The Asia Initiative officially welcomed two new members, Armenia and Mongolia, as well as a new partner, the Commonwealth Association of Tax Administrators (CATA). As of September 2, 2022, the Asia Initiative officially has 15 member countries/jurisdictions, namely Armenia, Brunei Darussalam, Hong Kong (China), India, Indonesia, Japan, South Korea, Macau (China), Maldives, Malaysia, Mongolia, Pakistan,
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4) The 3rd Asia Initiative Meeting
The meeting was held on November 8, 2022, in Seville, Spain, as part of the 2022 Global Forum OECD plenary meeting. The meeting was chaired by Director General of Taxes Suryo Utomo as the Chair of the Asia Initiative and was attended in person by delegates from 9 member jurisdictions of the Asia Initiative and delegates from representatives of 4 international organizations.
In the meeting, the Chair of the Asia Initiative presented the developments that had taken place after the 2nd Asia Initiative Meeting in September 2022, including the results of the steps that had been taken by the Chair of the Asia Initiative and the Global Forum Secretariat to invite Asia jurisdictions that are members of the Global Forum but are not yet members of the Asia Initiative.
Some of the things that were presented by the Global Forum Secretariat in the meeting are as follows:
a) Note on Progresses of the Asia Initiative in 2022 which contains notes on the progress that has been made since the launch of the Asia Initiative at the Global Forum Plenary Meeting in 2021; and b) outline of the Asia Initiative annual report and draft questionnaire that will be used as the basis for the preparation of the Annual Asia Initiative Progress Report for 2022.
On this occasion, the delegates welcomed Kazakhstan as a new member of the Asia Initiative by signing the Bali Declaration on October 14, 2022. This meeting also agreed on the appointment of the Revenue Secretary of the Government of India as Co-Chair of the Asia Initiative for the period 2023-2024 supporting the Director General of Taxes of Republic of Indonesia.
c. FTA
FTA is an international cooperation aimed at improving the effectiveness of the tax system and increasing tax compliance around the world.
On September 28-30, 2022, Director General of Taxes Suryo Utomo led the Indonesian delegation in the 15th FTA Plenary Meeting in Sydney, Australia. In the meeting, delegates from 46 countries agreed that FTA should continue to support the following priority areas: a) preparation for the implementation of the OECD’s Two-Pillar Solution; b) digital transformation to provide seamless tax administration; and c) support for capacity building for tax authorities in developing countries.
In 2022, DGT also participated in the FTA – Mutual Agreement Procedure (FTA MAP Forum).
This forum aims to strengthen cooperation between countries in resolving cross-border tax disputes and promote the use of the MAP mechanism to effectively resolve tax disputes.
One of the results of the FTA MAP Forum is that DGT implements multilateral MAP practices as stipulated in Presidential Regulation No. 55 of 2022 on Adjustments to Regulations in the Field of Income Tax. In addition, the FTA MAP Forum also conducts peer reviews that maintain the quality of the implementation of MAP between Indonesia and Tax Treaty partner countries/
jurisdictions.
In addition to participating in various international forums, in 2022 DGT also held various cooperation activities with non-donor partner countries, such as tax authorities of other countries and international organizations. These activities include assistance for official visits/meetings, study visits, workshops, FGD (Focus Group Discussion), etc.
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Date Venue/Media Activity
January 5, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries January 11, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries January 20, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries February 3, 2022 Teleconference FTA Tax Administration 3.0 Action 7 Knowledge Sharing Working Group February 16, 2022 Jakarta, Indonesia The 1st Asia Initiative Meeting
February 17, 2022 Teleconference Virtual Meeting Large Business and International Programme February 21, 23, 2022 Teleconference 40th Meeting of the Peer Review Group
February 22, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries
March 8, 2022 Teleconference International Tax Forum Meeting regarding Implementation of Pillar 1 and Pillar 2 between DGT and ATO
March 9, 2022 Teleconference General Assembly Meeting 2022 ATAIC
March 28—30, 2022 Teleconference WP10/GF Meeting on Crypto-Asset Reporting Framework (CARF) March 28, 30, 31,
April 1, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries March 29, 2022 Teleconference Meeting with National Tax Service of Korea (NTS)
March 29—30, 2022 Teleconference Steering Group Meeting
March 30, 2022 Teleconference 1st Virtual ATAIC Correspondent Meeting 2022
April 6, 2022 Teleconference Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) Wealthy Population Expert Group (WPEG) Session 3
April 21—22, 2022 Teleconference 56th Meeting of the Forum on Harmful Tax Practices (FHTP)
April 26, 2022 Teleconference FTA Large Business and International Programme (LBIP) / WP11 Joint Meeting May 10—12, 2022 Oil & Gas Tax Office
Jakarta, Indonesia A comparative study by the Uganda Tax Authority May 17, 2022 DGT Head Office,
Jakarta, Indonesia Comparative study by the Ministry of Finance of Bangladesh regarding internal compliance at DGT
May 17—20, 2022 DGT Head Office,
Jakarta, Indonesia Official visit and discussion regarding cooperation between IBFD and DGT May 20, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries
May 23, 2022 Teleconference Joint DGT-OECD Virtual Workshop on Tax Treaties: Permanent Establishment, Services, Royalties, and the Prevention of Treaty Abuse
May 23—25, 2022 Teleconference Joint DGT-OECD Virtual Workshop on Tax Treaties 2022
May 25, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries June 3, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries June 8—10, 2022 Jakarta, Indonesia CA meeting on APA/MAP between Indonesia and partner countries
June 10, 2022 Teleconference 1st Joint Peer Review Group and Automatic Peer Review Group Meeting DGT’s Participation in International Forums and Cooperation Activities with Non-Donor Partner Countries, 2022
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Date Venue/Media Activity
June 29, 2022 Teleconference Virtual ATAIC Workshop on Pillar One and Pillar Two June 30 — July 1, 2022 Teleconference 9th Global Forum Competent Authorities Meeting
July 12—17, 2022 Bali, Indonesia Plenary meeting to discuss technical preparations for the G20 main event and side events
July 6—8, 12, 2022 Teleconference 41st Meeting of the Peer Review Group
July 14, 2022 Bali, Indonesia Asia Initiative Ministerial Meeting and Signing Ceremony
July 13—16, 2022 Bali, Indonesia 3rd Finance and Central Bank Deputies (FCBD) dan 3rd Finance Ministers and Central Bank Governors (FMCBG) G20
July 19—23, 2022 Thailand CA meeting on APA/MAP between Indonesia and partner countries July 21, 2022 Teleconference 2nd Joint Peer Review Group and Automatic Peer Review Group Meeting
August 16—19, 2022 Jakarta, Indonesia Meeting between DGT and the South Korean tax authority (NTS) to share experiences regarding the implementation of the tax administration system
August 22, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries August 31 —
September 2, 2022 Bali, Indonesia The 2nd Asia Initiative Meeting September 5, 2022 DGT Head Office,
Jakarta, Indonesia Introductory meeting with the representatives of the Dutch Embassy September 5—7, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries
September 7, 2022 Teleconference JITSIC/TFTC Virtual Session on Cryptoassets
September 19—21, 2022 Teleconference The Third Conference of the Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF)
September 19—22, 2022 Jakarta, Indonesia Joint DGT-OECD Capacity Building on Transfer Pricing 2022: New Highlights of the OECD Transfer Pricing Guidelines 2022
September 22, 2022 Teleconference World Bank Conference on Global Tax Equity September 27, 2022 Sydney, Australia Bilateral meeting of DGT and ATO
September 28—30, 2022 Sydney, Australia 15th FTA Plenary Meeting
October 10—12, 14, 2022 Teleconference 42nd Meeting of the Peer Review Group
October 13, 2022 Teleconference 3rd Joint Peer Review Group and Automatic Peer Review Group Meeting October 13—14, 2022 Bali, Indonesia G20 Finance Ministers and Central Bank Governors (FMCBG)
October 25, 2022 Teleconference Coordination of preparations for the 12th Round of IEU-CEPA Working Group Small Medium Enterprises (WG SMEs) negotiations
October 26—28, 2022 Teleconference CA meeting on APA/MAP between Indonesia and partner countries
November 8—11, 2022 Sevilla, Spain 15th Global Forum Plenary Meeting, including The 3rd Asia Initiative Meeting and Steering Group Meeting
November 9—10, 2022 Teleconference Working Party 11 Meeting November 15—16, 2022 Teleconference Working Party 2 Meeting
November 20—22, 2022 Teleconference 57th Meeting of the Forum on Harmful Tax Practices
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Date Venue/Media Activity
10—16 Desember 2022 Teleconference Coordination Meeting of Pillar IV Indo-Pacific Economic Framework (IPEF) for Prosperity: Round 1
December 12, 2022 Jakarta, Indonesia Meeting with the United States Embassy December 13—14, 2022 Teleconference ESG Working Party 10
December 15—16, 2022 Paris, France Working Party 1 (WP-1) Meeting December 29, 2022 Teleconference ATAIC 2nd General Assembly Meeting Source: Directorate of International Taxation
2. Partnership with Donor Agencies
To support development plans, the Indonesian Government receives support from several donor agencies in the form of technical assistance. One of the areas supported by donor agencies is financial management, including increasing the effectiveness of state revenues from the taxation sector.
Technical assistance from donor agencies is realized in various forms of collaboration, including training, seminars, workshops, research/studies, technical assistance, focused group discussions (FGD), and comparative study visits.
In 2022, there were four foreign direct grant donors, namely:
a. Japan International Cooperation Agency (JICA), Japan;
b. Agence Française de Développement (AFD), France;
c. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Germany; and
d. Australia Indonesia Partnership for Economic Governance (AIPEG)/Indonesia-Australia Cooperation Program for the Economy (Prospera) including Australian Taxation Office (ATO).
Donor Agencies Activity/Theme
JICA a. Survey Report on Big Data/AI in Tax Administration
b. Initial meeting in the context of organizing training for capacity development in the fields of tax collection, investigation, and compliance
c. Tax Collection Seminar
d. Public Complaint Management Seminar e. HR Management Seminar
f. Initial meeting to collect survey data for the implementation of a pilot project for the use of big data in tax administration
AFD a. Workshop on Tax Aspects in the Informal Economy b. Workshop on Tax Gap for Improving Tax Compliance
c. Workshop on Effective Data Processing and Implementation of AEOI d. Workshop on Knowledge Management in Tax Administration e. Workshop on Business Process Reengineering
f. Workshop on Change Management and Evaluation of Organizational Effectiveness for Improving the Quality of Tax Services
Foreign Direct Donor, 2022
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Apart from direct grants, DGT also received planned grants from the World Bank through the Public Financial Management Multi Donor Trust Fund (PFM MDTF) Phase III project. Throughout 2022, Certified Professional Trainer activities have been carried out to support Renewal of Core Tax Administration System and a Technical Workshop on Strengthening Capacities of Heads of Tax Offices.
The majority of donor recipients at DGT expressed satisfaction with the technical assistance provided by donor
Donor Agencies Activity/Theme
GIZ a. Technical training and assistance in risk management
b. Development and implementation of enterprise data transformation c. IBFD Online Course: Fundamental of Transfer Pricing
d. Training of DMBOK Fundamentals e. IHT CFA Level 1 Preparation
f. Training of Professional Management Project (PMP) Exam Guide g. IHT Quantitative-based Risk Management (Level 3)
h. Talend Data Governance System for DGT’s Team
i. Analyze the Effectiveness of the DRM Supported Training Programs on BKF and DGT;
j. General training of Crypto Currency
k. Capacity building training on Hadoop Data Warehouse l. Training of Data Science: Web Scraping
m. International Tax Conference 2022 n. Training of Basic Financial Modeling
o. Change Management Team Coaching Certification AIPEG/Prospera/
ATO a. Training and certification in User Experience (UX) b. Training in Women in Leadership
c. International Tax - BEPS Inclusive Framework Pillar 1/2 d. Core Tax workshop with Ramsey Beydoun (ATO) e. Virtual assistant study visit
f. Transfer pricing in financial transactions g. Large taxpayers compliance at ATO and DGT h. Enterprise Change Management at ATO and DGT
i. ATO/Large Market Compliance/Approach to Transfer Pricing j. Study visit to the RTO in East Java
k. International Tax Conference 2022
l. Annual meeting of the Technical Team for Service Digitalization (3C Team) m. Accreditation of the Tax Administration Diagnostic Assessment Tool (TADAT) n. Discussion meeting of the development of technical competence assessment tools o. Joint training on Law Enforcement in Handling Tax Crime Batch I—V
p. TAM Data Migration
q. FGD National Fiscal Transaction Ecosystem r. FGD Taxable Enterprises Centralization
s. Opening training for Business Process and Master Trainers
t. Data Interoperability dissemination with ministries/institutions and local governments u. Consignment of DGT SIKKA Renewal for the PSIAP Team in 2022—2024
v. Finalization of the development and testing of Electronic Certificates on CTAS w. Development of CTAS Interface with the Ministry of Finance’s ICT management x. Workshop on the Future DGT Organization (end-state)
y. Consignment of Check Point for Adjustment of 16-Digit NPWP and Branch NPWP Removal with DGCE z. FGD Taxation Digitalization Ecosystem
Source:
• Directorate of Internal Compliance and Apparatus Transformation
• Directorate of Tax Dissemination, Services, and Public Relations
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