Updates on Indonesia´s key technical guidance for APA and MAP procedures

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These new circular letters serve as technical guidance in the implementation of APA and MAP framework aligned with the implementation of the Arms’s Length Principle in PMK-172/PJ/2023 (“PMK-172”).

The detailed guidance outlines specific procedural steps of the implementation, particularly for tax authority.

Indonesia´s Tax Dispute Resolution Framework

Indonesia’s current tax dispute resolution framework provides taxpayers with multiple avenues, including appeals before the Tax Court, Judicial Review at the Supreme Court, as well as dispute‑prevention and dispute‑resolution mechanisms such as APA and the MAP. Endorsement and utilization of APA and MAP have continued to grow, increasing the need for clearer technical implementation guidelines.

While regulations providing a general framework for APA and MAP implementation in Indonesia are already in place, comprehensive operational guidelines have previously been limited.

These new circular letters aim to establish good governance in handling APA and MAP applications through uniform implementation, orderly administration, appropriateness and timeliness.

Key points for the implementation practice

The new circular letters, SE-17 and SE-18, outline several key points for the implementation practice.

Electronic submission

Taxpayers can use the Taxpayer Portal (Coretax) to submit APA and MAP application request. For APA, taxpayers are required to submit their applications primarily through Coretax. Direct submission to the Tax Office is permitted only in circumstances where electronic filing is not available. As for MAP, electronic submission is a filing option, alongside direct submission or postal delivery. The regulation on MAP provisions does not explicitly specify electronic filing as the preferred method for MAP requests.

Clarification on APA evaluation mechanism

APA evaluation will be conducted by the Tax Office where the taxpayer is registered, based on a nominative list from the Directorate of International Tax, and must be completed within four months after the CITR filing (or two months if extended).

If non-compliance with the APA provisions or material changes are identified, the case may be escalated to the Directorate of International Tax for review, which may lead to amendment or revocation of the APA.

Clarification on DGT’s alignment with the Tax Court Decision in MAP Negotiation

DGT’s stance in MAP negotiations based on SE-18 will be based on the prevailing Tax Court Decision. Once a Judicial Review decision is rendered, the DGT will adjust its position to reflect that outcome.

Detailed Internal Procedures and Emphasizing Deadlines

Both new circular letters provide detailed internal procedures for Directorate General of Taxes in administering APA and MAP applications, including the applicable deadlines set out under PMK‑172. Practical examples are also included, thereby enhancing procedural certainty and clarity for taxpayers.

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