On 8 December 2025, MetaLaw has contributed to the Mondaq Legal 500 Intelligence Comparative Guide on Tax Avoidance 2025 specifically in the Indonesia Chapter, published by Mondaq Legal 500 Intelligence which has been analysing law firms across the world.
Under this publication, MetaLaw provides an overview of tax avoidance in Indonesia, which was covered through several questions in a Q&A format.
This publication answers topics describing the current condition of tax avoidance in Indonesia, which includes questions regarding specific tax avoidance provisions, compliances, and trends. The issues discussed in this publication mainly focuses on:
- The legal framework governing tax avoidance in Indonesia, including the bilateral/multilateral instruments, outlining the distinction between lawful tax planning and prohibited tax avoidance practices under Indonesian tax laws and regulations.
- The role and authority of the Directorate General of Taxes (DGT) in identifying, challenging, and recharacterizing tax avoidance arrangements, including its investigatory, assessment, enforcement powers, and cooperation in relation to tax enforcement.
- The transactions categorized as tax avoidance, including transfer pricing, thin capitalization, offshore special purpose vehicles, tax havens, controlled foreign companies, the reporting of consistent losses, and base erosion and profit shifting, along with an explanation of the relevant Indonesian laws and regulations governing the applicable thresholds for tax avoidance.
- Specific matters that must be carefully considered to avoid violations of anti-tax avoidance regulations in activities such as the transfer of assets abroad, the transfer of income streams, securities transactions, land transactions, trade, and cross-border tax planning.
- The scope of tax assessments from both civil law and criminal law perspectives, including an explanation of the enforcement mechanisms under each legal regime as applied to individuals and foreign companies, as well as their extraterritorial applicability beyond the jurisdiction of Indonesia.
- Several risk mitigation measures to avoid violations of tax avoidance rules, including recommendations on records and documentation, requests for affirmation, guidance, or clarification from the Directorate General of Taxes, the application of the arm’s length principle, and considerations regarding the location of a special purpose vehicle (SPV) in a tax haven, along with practical guidance on tax compliance.
- Dispute resolution mechanisms available to taxpayers, including objections, appeals before the Tax Court, judicial review, and the strategic considerations and alternative scenarios in managing tax avoidance disputes with the tax authority.
- The intersection between Indonesia’s tax avoidance regime and cyber law, including the digitalisation of tax administration, cross-border cooperation between tax authorities, the taxation of digital and crypto-asset transactions, and the other provisions of tax that related to crypto-assets.
- Recent developments in Indonesia’s tax avoidance regime in response to the digital economy, including measures to optimise value-added tax on digital and cross-border transactions, mandatory income tax collection by e-commerce platforms, and the potential impact of recent changes within the Ministry of Finance on the enforcement approach of the Directorate General of Taxes.
The publication of this Mondaq Legal 500 Intelligence by MetaLaw provides answers to the current frequently asked questions in relation to the tax avoidance in Indonesia.
For further information, please contact:
MetaLAW, Legal & Tax Consultant, Jakarta, Indonesia
general@metalaw.id
