FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 25 /POJK.03/2015

CONCERNING

SUBMISSION OF FOREIGN CUSTOMER INFORMATION RELATED TO TAXATION 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 maintain the stability of the financial system, the Indonesian government together with relevant agencies needs to coordinate regionally and globally; b. that the Financial Services Authority, in accordance with its duties and authority, is one of the agencies that needs to support coordination in order to realize a financial system that grows sustainably and stably and is able to protect consumer and public interests;
c. that one form of coordination as referred to in letter a is the exchange of financial information with other countries or jurisdictions in order to support the program of preventing tax avoidance;
d. that in order to exchange information for the prevention of tax avoidance, agreements are made between the Indonesian government and the governments of other countries or jurisdictions; e. that one of the agreements as referred to in letter d is an automatic information exchange agreement that has consequences for certain financial service institutions to periodically submit financial information of certain foreign customers to the partner country or partner jurisdiction through the Indonesian tax authority; f. that the submission of financial information as referred to in letter e must comply with statutory provisions; g. that based on the considerations as referred to in letter a, letter b, letter c, letter d, letter e, and letter f, it is necessary to establish a Financial Services Authority Regulation concerning the Submission of Foreign Customer Information Related to Taxation to Partner Countries or Partner Jurisdictions;

Recalling:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 8 of 1995 concerning the Capital Market (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
3. Law Number 21 of 2008 concerning Sharia Banking (State Gazette of the Republic of Indonesia Number 94, Supplement to the State Gazette of the Republic of Indonesia Number 4867);
4. 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);
5. Law Number 40 of 2014 concerning Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337, Supplement to the State Gazette of the Republic of Indonesia Number 5618);

DECIDING:
To establish a Financial Services Authority Regulation concerning the Submission of Foreign Customer Information Related to Taxation to Partner Countries or Partner Jurisdictions.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the following terms are defined as:

1. Financial Service Institution, hereinafter abbreviated as FSI, is an FSI as referred to in Law Number 21 of 2011 concerning the Financial Services Authority, which meets the criteria in the automatic information exchange agreement between the Indonesian government and the government of a partner country or partner jurisdiction.

2. Partner Country or Partner Jurisdiction is a country or jurisdiction bound to Indonesia in a convention on mutual administrative assistance in the field of taxation, an Intergovernmental Agreement (IGA) in the field of taxation, or other bilateral or multilateral agreements in the field of taxation.

3. Automatic Exchange of Information is the exchange of information regarding tax matters between the Indonesian Government and the government of a Partner Country or Partner Jurisdiction, which is carried out periodically at specific times, systematically, and continuously, with the type and method of information exchange regulated based on an agreement between Indonesia and the Partner Country or Partner Jurisdiction.

4. Foreign Company is:
   a. a legal entity established or domiciled in a Partner Country or Partner Jurisdiction; b. a branch office or representative office of a legal entity established or domiciled in a Partner Country or Partner Jurisdiction;
   c. a legal entity established or domiciled in Indonesia or outside Indonesia that is not a Partner Country or Partner Jurisdiction, which is owned by a taxpayer of a Partner Country or Partner Jurisdiction in the form of an individual or legal entity by at least a certain percentage stated in the Automatic Exchange of Information agreement; or
   d. a branch office or representative office of a legal entity established or domiciled in Indonesia or outside Indonesia that is not a Partner Country or Partner Jurisdiction, which is owned by a taxpayer of a Partner Country or Partner Jurisdiction in the form of an individual or legal entity by at least a certain percentage stated in the Automatic Exchange of Information agreement.

5. Foreign Customer is:
   a. for Commercial Banks, an individual customer or Foreign Company that meets specific criteria as regulated in the Automatic Exchange of Information agreement, which has an account and/or uses services at a Commercial Bank or a Commercial Bank conducting business based on Sharia Principles; b. for Securities Companies and Custodian Banks, an individual customer or Foreign Company that meets specific criteria as regulated in the Automatic Exchange of Information agreement, which has a securities account and/or uses services of a Securities Company and/or Custodian Bank directly (direct customer);
   c. for Life Insurance Companies and Sharia Life Insurance Companies, a policyholder or participant in the form of an individual or Foreign Company that meets specific criteria as regulated in the Automatic Exchange of Information agreement; and/or
   d. for FSIs other than those in numbers 5 letter a, letter b, and letter c, a customer that meets criteria according to the relevant tax agreement between the Indonesian government and the government of a Partner Country or Partner Jurisdiction, which will be further regulated in a Financial Services Authority Circular, and who is a taxpayer of a Partner Country or Partner Jurisdiction.

CHAPTER II

REPORTING

Article 2

(1) In the implementation of the Automatic Exchange of Information agreement, FSIs are required to submit reports to the Indonesian tax authority in the form of Foreign Customer information related to taxation to be forwarded to the tax authority of the Partner Country or Partner Jurisdiction. (2) The report as referred to in paragraph (1) is a report regarding Foreign Customer information who has an account balance or account value at least in accordance with the Automatic Exchange of Information agreement. (3) Foreign Customer information as referred to in paragraph (2) includes at least:
a. Customer information; and b. Customer financial information.

Article 3

In order to submit reports as referred to in Article 2 paragraph (1), FSIs are required to:
a. identify:
1. customers; or
2. prospective customers,
to ensure that the customer or prospective customer meets the criteria for Foreign Customer or prospective Foreign Customer; b. request information and/or documents necessary for verification that the customer or prospective customer meets the criteria for Foreign Customer or prospective Foreign Customer;
c. request Foreign Customers and/or prospective Foreign Customers to submit written, voluntary consent statements, instructions, or powers of attorney to the FSI to provide Foreign Customer and/or prospective Foreign Customer information to the Indonesian tax authority to be forwarded to the tax authority of the Partner Country or Partner Jurisdiction; and
d. screen Foreign Customers who have an account balance or value at least in accordance with that established in the Automatic Exchange of Information agreement.

Article 4

In the event that a prospective Foreign Customer is unwilling to submit the consent statement, instruction, or power of attorney as referred to in Article 3 letter c, the FSI is required to:
a. explain the regulations regarding Automatic Exchange of Information; and b. refuse to establish a business relationship with such prospective Foreign Customer.

Article 5

(1) In the event that a Foreign Customer is unwilling to submit the consent statement, instruction, or power of attorney as referred to in Article 3 letter c, the FSI is required to:
a. explain the consequences to the Foreign Customer if unwilling to provide information according to the Automatic Exchange of Information Agreement; b. request the Foreign Customer to submit a written objection statement; and
c. not serve new transactions related to the account of such Foreign Customer.
(2) The cessation of new transaction services as referred to in paragraph (1) letter c is excluded for transactions:
a. to fulfill obligations previously agreed upon between the Foreign Customer and the FSI; b. for account closure;
c. to fulfill obligations based on statutory provisions.

Article 6

The submission of Foreign Customer information reports by FSIs to the tax authority as referred to in Article 2 can be done:
a. through the Financial Services Authority; or b. directly to the tax authority.

Article 7

(1) The submission of Foreign Customer information reports as referred to in Article 6 paragraph (1) letter a must be submitted at the latest 60 days before the reporting deadline to the tax authority of the Partner Country or Partner Jurisdiction based on the Automatic Exchange of Information agreement. (2) In the event that the reporting deadline for Foreign Customer information falls on a holiday, the reporting is carried out on the next working day.

Article 8

In order to submit reports as referred to in Article 6 paragraph (1) letter a, the FSI is required to submit to the Financial Services Authority the name of the responsible officer for the reporting of Foreign Customer information.

Article 9

(1) FSIs may delegate the implementation of reporting obligations as referred to in Article 2 to other FSIs that are selling agents and/or custodians.
(2) The delegation of reporting implementation as referred to in paragraph (1) is carried out based on a written agreement.
(3) The delegation of reporting implementation as referred to in paragraph (1) does not eliminate the responsibility of the FSI delegating the reporting implementation as referred to in Article 2 and Article 3.

CHAPTER III

SANCTIONS

Article 10

FSIs that violate the provisions as referred to in Article 2, Article 3, Article 4, Article 5, and/or Article 8 are subject to administrative sanctions in the form of warnings or written notices.

CHAPTER IV

CLOSING

Article 11

Further provisions regarding this Financial Services Authority Regulation are regulated in a Financial Services Authority Circular.

Article 12

This Financial Services Authority Regulation takes effect on the date of its enactment.

In order for everyone to know it, order the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta
On 4 December 2015

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY,

[signed]
MULIAMAN D. HADAD

Enacted in Jakarta
On 11 December 2015

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

[signed]
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 291

A copy in accordance with the original
Director of Law 1
Department of Law

[signed]
Sudarmaji

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 25 /POJK.03/2015

CONCERNING

SUBMISSION OF FOREIGN CUSTOMER INFORMATION RELATED TO TAXATION TO

PARTNER COUNTRIES OR PARTNER JURISDICTIONS

I. GENERAL

In order to maintain the stability of the financial system, coordination is carried out with other countries both regionally and globally. One of these coordinations is intended to support efforts to prevent tax avoidance, tax evasion, and to increase the compliance of Indonesian citizens domiciled in other countries in fulfilling Indonesian tax regulations, and vice versa. The form of coordination carried out to support efforts to prevent tax avoidance is in the form of exchanging taxpayer financial information with other countries.

This activity is initiated by an agreement between the Indonesian government and the government of a Partner Country or Partner Jurisdiction, namely the government of a country that has committed to preventing tax avoidance by taxpayers through bilateral or multilateral agreements. The Indonesian government's commitment to efforts to prevent tax avoidance and tax evasion has been ratified with Presidential Regulation of the Republic of Indonesia Number 159 of 2014 dated 17 October 2014 concerning the Ratification of the Convention on Mutual Administrative Assistance in Tax Matters.

Country agreements to support tax avoidance require each of the tax authorities of the countries concerned to submit information on taxpayers of a Partner Country or Partner Jurisdiction who are in their country. One of the important parties in the submission of this information is the Financial Service Institution (FSI) that serves as a place for storage or investment and financial service provision for customers who are taxpayers of a Partner Country or Partner Jurisdiction.

The exchange of information between the Indonesian government and the tax authorities of Partner Countries or Partner Jurisdictions carried out by the competent authority in Indonesia is implemented based on the Indonesian government's commitments, including: the Convention on Mutual Administrative Assistance in the Field of Taxation, Intergovernmental Agreement (IGA) in the Field of Taxation, or other Bilateral or Multilateral Agreements in the Field of Taxation.

This exchange of information includes 3 (three) types, namely: Exchange of information based on request, spontaneous exchange, and automatic exchange. The similarity of these three types of Information Exchange is the existence of a country agreement as the basis, while the differences are in:

1. exchange of information based on request, there is a request for specific taxpayers first;
2. spontaneous exchange, one country takes the initiative to report specific taxpayers;
3. automatic exchange of information, the submission of taxpayer financial information not based on request or initiative, but based on the fulfillment of taxpayer criteria in the agreement between countries, carried out through an agreed system, submitted periodically and continuously.

Furthermore, Automatic Exchange of Information is the exchange of financial information of FSI customers who are taxpayers of a Partner Country or Partner Jurisdiction who are in Indonesia to be submitted to the tax authority of the Partner Country or Partner Jurisdiction concerned, and vice versa for Indonesian taxpayers who are FSI customers in a Partner Country or Partner Jurisdiction whose financial information will be submitted to the Indonesian Tax Authority.

Automatic Exchange of Information can be carried out with a voluntary statement from the taxpayer customer of a Partner Country or Partner Jurisdiction. Country agreements in order to carry out Automatic Exchange of Information include, among others: the method of conducting due diligence, the type of information exchanged, the reporting period (periodic), and the time of report submission. Submission of financial information is carried out through an agreed system and is carried out continuously.

The Government has established Minister of Finance Regulation Number 125/PMK.010/2015 dated 7 July 2015 which allows FSIs to submit customer financial information who are taxpayers of a Partner Country or Partner Jurisdiction to the tax authority in Indonesia and the tax authority in the Partner Country based on voluntary written consent from the taxpayer customer of the Partner Country or Partner Jurisdiction concerned, to the FSI.

To support the government and FSIs in the process of submitting FSI customer information who are taxpayers of a Partner Country or Partner Jurisdiction so that they continue to comply with statutory provisions, it is necessary to regulate the submission of such customer information in the framework of the Automatic Exchange of Information Agreement between Indonesia and Partner Countries or Partner Jurisdictions.

II. ARTICLE BY ARTICLE

Article 1

Clear enough.

Article 2

Paragraph (1)
What is meant by "Indonesian tax authority" is the Directorate General of Taxes (DJP).

Paragraph (2)
What is meant by account value includes, among others, the cash value of insurance contracts, or annuity value or surrender value.

Paragraph (3)
Letter a
Customer information includes, among others, information regarding names and account numbers.
Account numbers include, among others:

1. accounts for Banks;
2. insurance policies for Life Insurance Companies and Sharia Life Insurance Companies; and/or
3. sub-account numbers for Securities Companies and Custodian Banks.

Letter b
Clear enough.

Article 3

Letter a
Clear enough.

Letter b
Information and/or documents requested include, among others, correspondence address in the Partner Country or Partner Jurisdiction, tax identification number of the Partner Country or Partner Jurisdiction, and other information and/or documents according to the Automatic Exchange of Information agreement which will be further regulated in a Financial Services Authority Circular.

Letter c
Written consent/instruction/power of attorney statements from Foreign Customers need to be obtained so that the provision of information to the tax authority complies with statutory regulations regarding customer data confidentiality.

Letter d
What is meant by value includes, among others, the cash value of insurance contracts, or annuity value or surrender value.

Article 4

Regulations regarding Automatic Exchange of Information include, among others:
a. submission of Foreign Customer information to the Partner Country or Partner Jurisdiction; b. the importance of consent/instruction/power of attorney statements to be able to submit Foreign Customer information to the Partner Country or Partner Jurisdiction.

Article 5

Paragraph (1)
What is meant by "transaction" is financial transactions, including:
a. deposits, withdrawals, transfers, account opening or contract creation for banking customers; b. account opening, buy transactions or transfers for capital market customers;
c. new policy closure for life insurance companies and Sharia life insurance companies.

Paragraph (2)
Letter a
Examples of fulfilling obligations previously agreed upon include, among others:

1. insurance premium payments;
2. loan installment payments.

Letter b
Clear enough.

Letter c
Examples of fulfilling obligations based on statutory provisions include, among others:

1. fulfillment of tax obligations;
2. implementation of execution of court decisions.

Article 6

Clear enough.

Article 7

Clear enough.

Article 8

Clear enough.

Article 9

Clear enough.

Article 10

Clear enough.

Article 11

What is meant by further provisions includes, among others:
a. appointment of responsible officers; b. procedures for reporting Foreign Customer information;
c. Foreign Customer information that must be reported.

Article 12

Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5773