Financial Services Authority Regulation Number 25/POJK.03/2019 on Reporting Foreign Customer Tax Information to Partner Countries or Partner Jurisdictions

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 25/POJK.03/2019
CONCERNING
REPORTING OF FOREIGN CUSTOMER TAX INFORMATION TO PARTNER COUNTRIES OR PARTNER JURISDICTIONS BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS BOARD OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to realize a financial system that grows sustainably and stably, and to protect the interests of customers and the public, the Financial Services Authority, in accordance with its duties and authority, supports the Government of Indonesia in implementing programs to prevent tax evasion and avoidance; b. that as an effort to prevent tax evasion and avoidance, the signing of agreements for the automatic exchange of financial information is carried out between the Government of Indonesia and the governments of other countries or jurisdictions on a regional and global basis;
c. that in order to support the obligation to report financial information based on international agreements in the field of taxation as mandated in Law Number 9 of 2017 concerning the Determination of Government Regulation in Lieu of Law Number 1 of 2017 concerning Access to Financial Information for Tax Purposes into Law, it is necessary to regulate again the provisions regarding the submission of foreign customer tax information to partner countries or partner jurisdictions, with a new Financial Services Authority Regulation;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation concerning the Reporting of Foreign Customer Tax Information to Partner Countries or Partner Jurisdictions; Recalling:

1. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
2. Law Number 9 of 2017 concerning the Determination of Government Regulation in Lieu of Law Number 1 of 2017 concerning Access to Financial Information for Tax Purposes into Law (State Gazette of the Republic of Indonesia Year 2017 Number 190, Supplement to the State Gazette of the Republic of Indonesia Number 6112);

DECIDES:
To establish:
FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING REPORTING OF FOREIGN CUSTOMER TAX INFORMATION TO PARTNER COUNTRIES OR PARTNER JURISDICTIONS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are meant:

1. Financial Service Institutions, hereinafter abbreviated as FSI, are institutions that carry out activities in the Banking, Capital Market, and Insurance sectors, which meet the criteria in the automatic exchange of information agreement between the Government of Indonesia and the governments of partner countries or partner jurisdictions.
2. Commercial Banks are banks that carry out business activities conventionally and sharia, including branches of banks located outside the country.
3. Rural Credit Banks, hereinafter abbreviated as BPR, are banks that carry out business activities conventionally which in their activities do not provide services in payment transactions.
4. Sharia People's Financing Banks, hereinafter abbreviated as BPRS, are sharia banks which in their activities do not provide services in payment transactions.
5. Securities Companies are parties that carry out business activities as underwriters of securities, securities brokers, and/or investment managers.
6. Custodian Banks are Commercial Banks that have obtained approval from the Financial Services Authority to carry out business activities as custodians.
7. Life Insurance Companies are companies that conduct life insurance business as referred to in Law Number 40 of 2014 concerning Insurance.
8. Sharia Life Insurance Companies are companies that conduct sharia life insurance business as referred to in Law Number 40 of 2014 concerning Insurance.
9. General Insurance Companies are companies that conduct general insurance business as referred to in Law Number 40 of 2014 concerning Insurance, which market insurance products linked to investment.
10. Sharia General Insurance Companies are companies that conduct sharia general insurance business as referred to in Law Number 40 of 2014 concerning Insurance, which market insurance products linked to investment.
11. International Agreements in the Field of Taxation, hereinafter referred to as International Agreements, are agreements, in specific forms and names, which have become effective against the State of Indonesia regarding the automatic exchange of tax-related information to Partner Countries or Partner Jurisdictions.
12. Partner Countries or Partner Jurisdictions are countries or jurisdictions that are bound to the State of Indonesia in International Agreements.
13. Automatic Exchange of Financial Information is the activity of transmitting, receiving, and/or obtaining financial information related to taxation based on International Agreements carried out at specific times, periodically, systematically, and continuously on financial information obtained from FSIs.
14. Reporting FSI is an FSI that carries out activities in the banking, capital market, and insurance sectors.
15. Customer is a customer of the Reporting FSI.
16. Financial Account is an account managed by the Reporting FSI.

CHAPTER II
REPORTING
Article 2
(1) Reporting FSIs are required to submit reports containing financial information in accordance with International Agreements for each Financial Account identified as a Financial Account that must be reported to the Indonesian tax authority. (2) Reporting FSIs as referred to in paragraph (1) include:
a. FSIs in the banking sector:
1) Commercial Banks;
2) BPRs; and
3) BPRSs;
b. FSIs in the capital market sector:
1) Securities Companies; and
2) Custodian Banks; and
c. FSIs in the insurance sector:
1) Life Insurance Companies and Sharia Life Insurance Companies; and
2) General Insurance Companies and Sharia General Insurance Companies.
(3) Financial Accounts as referred to in paragraph (1) include:
a. accounts, for Commercial Banks, BPRs, and BPRSs; b. sub-accounts for securities, for Securities Companies and Custodian Banks; and
c. insurance policies, for Life Insurance Companies, Sharia Life Insurance Companies, General Insurance Companies, and Sharia General Insurance Companies.
(4) Reports as referred to in paragraph (1) contain financial information that at least includes:
a. identity of the holder of the Financial Account; b. Financial Account number;
c. identity of the Reporting FSI;
d. balance or value of the Financial Account; and e. income related to the Financial Account.
(5) In the event that there are no Financial Accounts that must be reported in one calendar year, the Reporting FSI is still required to submit a nil report to the Indonesian tax authority.
(6) Reporting FSIs are required to submit reports as referred to in paragraph (1) and paragraph (5) online with an electronic mechanism through the foreign customer information submission system provided by the Financial Services Authority. (7) Reporting FSIs that violate the provisions as referred to in paragraph (1), paragraph (5), and/or paragraph (6) are subject to administrative sanctions in the form of written reprimands or written warnings by the Financial Services Authority.

Article 3
(1) Customers of FSIs for:
a. Commercial Banks, BPRs, and BPRSs are individual customers or entities that meet certain criteria as regulated in the Automatic Exchange of Financial Information agreement, who have accounts and/or use services at Commercial Banks, BPRs, or BPRSs; b. Securities Companies and Custodian Banks are individual customers or entities that meet certain criteria as regulated in the Automatic Exchange of Financial Information agreement, who have sub-accounts for securities at and/or use services of Securities Companies and/or Custodian Banks directly; and/or
c. Life Insurance Companies, Sharia Life Insurance Companies, General Insurance Companies, and Sharia General Insurance Companies are policyholders who are individuals or entities that meet certain criteria as regulated in the Automatic Exchange of Financial Information agreement.
(2) In the event that there is no policyholder as referred to in paragraph (1) letter c, the Customer is the insured or participant of the insurance policy owned by the policyholder.

Article 4
(1) Reporting FSIs must appoint 1 (one) responsible official for the submission of reports as referred to in Article 2.
(2) The responsible official may appoint 1 (one) implementing officer who is tasked only with submitting reports if necessary.
(3) The appointment of an implementing officer does not transfer the responsibility of the responsible official for the submission of reports as referred to in Article 2 paragraph (1).

Article 5
(1) To obtain access rights to the foreign customer information submission system as referred to in Article 2 paragraph (6), Reporting FSIs must register themselves in the foreign customer information submission system provided by the Financial Services Authority. (2) Registration as referred to in paragraph (1) is carried out online by including:
a. a letter of application for system registration; b. information on the responsible official;
c. information on the implementing officer, in the event that the responsible official appoints an implementing officer as regulated in Article 4 paragraph (2); and
d. documents or other information if necessary.
(3) In the event of a change in the responsible official and/or implementing officer, the Reporting FSI must submit information regarding the identity of the new responsible official and/or implementing officer. (4) Registration as referred to in paragraph (1) does not eliminate the obligation of the Reporting FSI to register itself with the Indonesian tax authority as regulated in statutory provisions.

Article 6
(1) Reporting FSIs must identify the Partner Country or Partner Jurisdiction of the reporting destination that is the responsibility of the Reporting FSI.
(2) Identification as referred to in paragraph (1) is carried out based on information on the Partner Country or Partner Jurisdiction of the reporting destination that:
a. is announced by the Indonesian tax authority; and b. has been recorded in the foreign customer information submission system.
(3) Reporting FSIs must submit a letter of statement of the list of Partner Countries or Partner Jurisdictions online in the foreign customer information submission system.

Article 7
(1) Submission of reports through the foreign customer information submission system as referred to in Article 2 is carried out no later than 60 (sixty) days before the deadline for the end of the financial information exchange period between the Government of Indonesia and the government of the Partner Country or Partner Jurisdiction. (2) If the deadline as referred to in paragraph (1) falls on a holiday, the submission of reports must be carried out no later than on the next working day. (3) Reports through the foreign customer information submission system are declared to have been submitted when the Reporting FSI has received proof of report submission. (4) Proof of report submission as referred to in paragraph (3) is issued through the foreign customer information submission system.

Article 8
(1) Reporting FSIs carry out corrections in the event of errors in information in reports that have been submitted through the foreign customer information submission system.
(2) Correction of errors in information in reports as referred to in paragraph (1) is carried out based on:
a. requests from the Indonesian tax authority; and/or b. initiative of the Reporting FSI.
(3) Correction of errors in information in reports is submitted online through the foreign customer information submission system.
(4) Correction of errors in information in reports as referred to in paragraph (2) letter a can only be submitted no later than 1 (one) year after the end of the financial information exchange period between the Government of Indonesia and the government of the Partner Country or Partner Jurisdiction. (5) Correction of errors in information in reports as referred to in paragraph (2) letter b can only be submitted no later than 60 (sixty) days before the deadline for the end of the financial information exchange period between the Government of Indonesia and the government of the Partner Country or Partner Jurisdiction.

Article 9
(1) In the event of technical disturbances in the foreign customer information submission system at the deadline for report submission so that the Reporting FSI cannot submit reports through the foreign customer information submission system, the Financial Services Authority notifies the Reporting FSI regarding the occurrence of technical disturbances in writing through:
a. letters; b. the foreign customer information submission system; or
c. electronic mail according to the electronic mail address at the time of registration.
(2) Reporting FSIs are required to submit reports online no later than 1 (one) working day after the Financial Services Authority notifies that the technical disturbance as referred to in paragraph (1) has been resolved. (3) Reporting FSIs that violate the provisions as referred to in paragraph (2) are subject to administrative sanctions in the form of written reprimands or written warnings by the Financial Services Authority.

Article 10
(1) Reporting FSIs notify in writing to the Financial Services Authority about bankruptcy conditions occurring in the Reporting FSI so that it cannot submit reports and/or corrections of errors in information in reports until the deadline for report submission and/or correction of errors in information. (2) The Financial Services Authority informs the mechanism for report submission as referred to in paragraph (1) after coordinating with the Indonesian tax authority.

CHAPTER III
CLOSING
Article 11
At the time this Financial Services Authority Regulation takes effect:
a. Financial Services Authority Regulation Number 25/POJK.03/2015 concerning the Submission of Foreign Customer Information Related to Taxation to Partner Countries or Partner Jurisdictions (State Gazette of the Republic of Indonesia Year 2015 Number 291, Supplement to the State Gazette of the Republic of Indonesia Number 5773); and b. Financial Services Authority Circular Letter Number 16/SEOJK.03/2017 concerning the Submission of Foreign Customer Information Related to Taxation in the Framework of Automatic Exchange of Information Between Countries Using the Common Reporting Standard, are revoked and declared invalid.

This copy is in accordance with the original
Director of Law 1
Law Department signed
Yuliana

Article 12
This Financial Services Authority Regulation takes effect from the date of its promulgation.
To ensure that everyone knows it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Determined in Jakarta on October 15, 2019
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO
Promulgated in Jakarta on October 16, 2019
ACTING MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
TJAHJO KUMOLO
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2019 NUMBER 188

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 25/POJK.03/2019
CONCERNING
REPORTING OF FOREIGN CUSTOMER TAX INFORMATION TO PARTNER COUNTRIES OR PARTNER JURISDICTIONS

I. GENERAL
In order to realize a financial system that grows sustainably and stably and to protect the interests of customers and the public, the Government of Indonesia implements, among other things, programs to prevent tax evasion and avoidance. This is done to increase the compliance of Indonesian citizens residing in other countries or jurisdictions with the fulfillment of Indonesian tax regulations and vice versa. Support from the Financial Services Authority for the program to prevent tax evasion and avoidance is carried out through regulation and supervision of FSIs that play a significant role in the implementation of this program. The Government of Indonesia and the governments of Partner Countries or Partner Jurisdictions have committed to preventing tax evasion and avoidance by taxpayers through the signing of bilateral or multilateral agreements. The commitment of the Government of Indonesia referred to has been ratified through the determination of Presidential Regulation of the Republic of Indonesia Number 159 of 2014 concerning the Ratification of the Convention on Mutual Administrative Assistance in Tax Matters. These bilateral or multilateral agreements require the competent authorities to carry out automatic exchange of information on taxpayers from each country or jurisdiction. The commitment of the Government of Indonesia regarding automatic exchange of information consists of Bilateral/Multilateral Competent Authority Agreements on Automatic Exchange of Financial Account Information, Intergovernmental Agreements for Foreign Account Tax Compliance Act/FATCA, or other bilateral or multilateral agreements in the field of taxation. In realizing the commitment of the Government of Indonesia, cooperation from various parties is needed. One party that plays an important role in the information exchange process is the FSI, which is the place where the savings, investments, or financial service services of taxpayers who are its customers are stored. FSIs in Indonesia are required to report the financial information of their customers who are taxpayers of Partner Countries or Partner Jurisdictions located in Indonesia to be submitted to the tax authority of the Partner Country or Partner Jurisdiction concerned through the tax authority in Indonesia. The same applies vice versa for Indonesian taxpayers who are customers of financial service institutions in Partner Countries or Partner Jurisdictions. The Government of Indonesia has established Law Number 9 of 2017 concerning the Determination of Government Regulation in Lieu of Law Number 1 of 2017 concerning Access to Financial Information for Tax Purposes into Law, which allows for the implementation of automatic exchange of financial information. In the aforementioned Law, the Indonesian tax authority is given the authority to access customer financial information of FSIs for tax purposes. Provisions of statutory provisions regulating customer confidentiality are also exempted, for tax
purposes. Thus, the aforementioned Law also serves as a legal "umbrella" for FSIs in submitting customer financial information who are taxpayers of Partner Countries or Partner Jurisdictions to the tax authority in Indonesia. The implementation of the aforementioned Law is further regulated in Minister of Finance Regulations (PMK). The preparation of the aforementioned PMK also refers, among other things, to the Common Reporting Standard (CRS). Although it has been regulated in the Law and PMK, technical support is needed for the implementation of automatic information exchange so that information reporting from Reporting FSIs can be carried out electronically through a system built by the Financial Services Authority. Such reporting needs to be regulated in a Financial Services Authority Regulation as a legal basis, however, the imposition of sanctions for violations of the Financial Services Authority Regulation is carried out without disregarding the provisions in the Law and PMK, so that there is legal certainty and harmonization and prevents overlapping sanctions. To support the Government of Indonesia and FSIs in the implementation of automatic exchange of financial information and the obligation to report financial information based on international agreements in the field of taxation, it is necessary to regulate the reporting of foreign customer tax information to partner countries or partner jurisdictions.

II. ARTICLE BY ARTICLE
Article 1
It is clear enough.

Article 2
Paragraph (1)
What is meant by "Indonesian tax authority" is the Directorate General of Taxes (DJP).
Paragraph (2)
Letter a
Commercial Banks as Reporting FSIs include sharia business units.
Letter b
It is clear enough.
Letter c
Life Insurance Companies and General Insurance Companies as Reporting FSIs include sharia units.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.
Paragraph (6)
Instructions for using the foreign customer information submission system can be obtained in the system.
Paragraph (7)
It is clear enough.

Article 3
It is clear enough.

Article 4
Paragraph (1)
What is meant by "responsible official" is an official who is responsible for the submission of reports.
Paragraph (2)
It is clear enough.
Paragraph (3)
It is clear enough.

Article 5
Paragraph (1)
It is clear enough.
Paragraph (2)
Letter a
It is clear enough.
Letter b
Information on the responsible official includes, among other things, name, position, and electronic mail address.
Letter c
Information on the implementing officer includes, among other things, name, position, and electronic mail address.
Letter d
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.

Article 6
Paragraph (1)
It is clear enough.
Paragraph (2)
Information on the Partner Country or Partner Jurisdiction of the reporting destination announced by the Indonesian tax authority, among other things, consists of a list of reporting destination jurisdictions. Identification of Partner Countries or Partner Jurisdictions is carried out, among other things, by matching the country or jurisdiction of domicile for tax purposes of the Customer with the list of reporting destination jurisdictions announced by the Indonesian tax authority. Paragraph (3) What is meant by "letter of statement" is a letter of statement that can be downloaded in the foreign customer information submission system.

Article 7
Paragraph (1)
The deadline for the end of the information exchange period is in accordance with the International Agreement.
Example:
The deadline for the end of the information exchange period between the Government of Indonesia and the government of Country A is on September 30 every year. For the 2020 reporting period, the Reporting FSI submits the report no later than on August 1, 2020. Paragraph (2) What is meant by "holiday" is Saturday, Sunday, national holidays, days off for the implementation of general elections, or national collective leave. Paragraph (3) It is clear enough. Paragraph (4) Proof of report submission can be downloaded through the foreign customer information submission system and/or via electronic mail.

Article 8
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
Correction of errors in information in reports as referred to in this paragraph is carried out through the correction module in the foreign customer information submission system.
The deadline for the end of the information exchange period is in accordance with the International Agreement.
Example:
The deadline for the end of the information exchange period between Indonesia and Country X is on September 30 every year.
FSI A submits a report containing financial information as of December 31, 2019 through the foreign customer information submission system on July 31, 2020.
On October 4, 2020, the DJP notifies that there is incorrect information regarding the reporting destination country in the report submitted by FSI A in July 2020. FSI A can submit corrections for the report

means online through the foreign customer information reporting system no later than September 30, 2021.

Paragraph (5)

The deadline for the end of the information exchange period according to International Agreements.

Example:

The deadline for the end of the information exchange period between Indonesia and Country X is September 30 of each year.

LJK A submits a report containing financial position information as of December 31, 2019, through the foreign customer information reporting system on July 1, 2020.

On July 22, 2020, LJK A discovers information errors related to Customer balances in the report submitted by LJK A on July 1, 2020. LJK A can submit corrections to the aforementioned report online through the foreign customer information reporting system no later than August 1, 2020.

Article 9

Clearly sufficient.

Article 10

Clearly sufficient.

Article 11

Clearly sufficient.

Article 12

Clearly sufficient.

SUPPLEMENT TO THE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6403