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The Directorate General of Taxes Uses an International Automatic Exchange of Information System. This is How
Since 2018, the Indonesian Ministry of Finance Directorate General of Taxes has introduced the application of this system to exchange tax information with other countries.

The Directorate General of Taxes Uses an International Automatic Exchange of Information System. This is How

January 2024

The Automatic Exchange of Information (AEoI) system, which has been in place for taxpayers in Indonesia for about five years. Since 2018 the Indonesian Ministry of Finance Directorate General of Taxes introduced the application of this system to exchange tax information with other countries. Through the AEoI system, there is the potential to increase tax revenues from income tax (PPh) articles 25 and 29 for individuals (OP). This exchange of international tax data also involves the Indonesia Financial Services Authority (OJK) in its regulations.

The information and data collected by the AEoI system are as follows:

  • Name
  • Address
  • Date of Birth
  • Tax Identification Number (TIN) (where applicable)
  • Account Number (s)
  • The account balance(s) or value(s) as of the end of the calendar year or other appropriate period.
     

How is the AEoI system implemented in Indonesia?

AEoI serves as a corrective tool against taxpayers engaging in fraud through tax avoidance in their annual tax reports. These reports are submitted to tax authorities in each country, including Indonesia. AEoI facilitates access to financial information for tax purposes by introducing exceptions to the confidentiality aspect of all taxpayer accounts in financial institutions, both domestically (domestic financial institutions) and globally (foreign financial institutions). This aims to establish a more precise and accountable tax database.

Optimizing AEoI has the potential to boost state revenue from income tax collections. This is achievable because AEoI primarily targets financial information from taxpayers in both domestic and overseas financial institutions, closely linked to the growth of wealth or the economic capacity of the taxpayer.

Additionally, it is imperative to emphasize the importance of competent and integrity-driven tax officers who possess the necessary skills to enforce legal norms associated with AEoI. Adequate instruments and support systems are equally essential in facilitating the successful implementation of AEoI.
 

Please get in touch with Moores Rowland Indonesia for additional details on our services including tax advisory: contact-Jakarta@moores-rowland.com or contact-Bali@moores-rowland.com.

**By: Stefani W. Anggraeni — Marketing Communications Manager & Social Media Specialist