Indonesia’s Directorate General of Taxes (“DGT”) issued Announcement No. PENG-4/PJ/2026 (“Announcement”) on 10 August 2026 concerning the implementation of self-certification requirements under the Common Reporting Standard (“CRS”) framework.
The CRS is a global framework that facilitates the automatic exchange of account holder tax residency information among financial institutions across jurisdictions. This enables tax authorities to identify assets held offshore by their residents. In Indonesia, these obligations are implemented through Reporting Financial Institutions (“RFI”), which are mandated to identify their account holders and report relevant information to the Directorate General of Taxation (DGT).
This article is particularly relevant for RFIs such as banks, custodial institutions, investment entities, specified insurance companies, and other RFIs. Specifically, they should review their self-certification, entity-classification, and supporting documentation processes.
The Announcement does not introduce a new self-certification procedures as it has been regulated under Minister of Finance Regulation No. 108 of 2025 (“MoF Reg 108/2025”). Nevertheless, the Announcement is significant because it specifically restates several requirements relating to the collection, verification, documentation, and maintenance of valid self-certifications, while also providing model self-certification forms for individuals, entities, and Controlling Persons.
Self-Certification under the Existing CRS Framework
Under MoF Reg 108/2025, RFIs are required to submit accurate and complete Financial Account information and carry out identification procedures in accordance with the CRS.
For new financial accounts, RFI must obtain a self-certification from the prospective account holder as a separate part of the account-opening documentation. The self-certification is then used, together with other information available to the RFI, to determine the account holder’s Country of Residence for CRS purposes.
Obtaining the document alone is not sufficient. The RFI must also assess whether the information contained in the self-certification is reasonable by comparing it against information obtained or already available during the account-opening process. This includes, where relevant, information contained in the institution’s know your customer and anti-money laundering records (“KYC and AML records”).
MoF Reg 108/2025 also prescribes requirements for a self-certification to be considered valid. Among other things, the document must be signed or otherwise affirmed by the account holder or its authorised representative, properly dated, and contain the information required under the regulation.
The RFI must retain the relevant documentation so that the self-certification and the identification procedures supporting it can be evidenced where required.
Where a Financial Asset is sold through a sales agent, the identification process may be carried out by that agent. However, the relevant identification documents, self-certification, and other account-holder information must be provided to the RFI. The involvement of an intermediary therefore does not eliminate the need for the RFI to maintain the documentation supporting its CRS obligations.
The Entity Classification in This Matter
The CRS obligations applicable to an RFI are contingent upon the identity of its account holder. The majority of account holders are either individuals or entities that are financial institutions. In such cases, standard identification procedures would be applicable. Where the account holder is neither an individual or financial institutions entity, it falls into a third category, the Non-Financial Entity (“NFE”). This category carries the additional self-certification requirements at the centre of the Announcement.
NFE is, broadly, any entity that does not itself qualify as a “Financial Institution” for CRS purposes, meaning it is not a bank, custodial institution, investment entity, or specified insurance company.
NFEs are further divided into Active NFEs, which derive the majority of their income and assets from active trade or business operations, and Passive NFEs, whose income is predominantly passive in character, such as dividends, interest, rents, royalties, or capital gains, and which most commonly take the form of a holding company or any other investment vehicle with no substantive trading activity of its own.
The Announcement reinforces the “look-through” approach for Passive NFEs, which requires self-certification from the Controlling Person / Beneficial Owner to identify the individual benefiting from the account.
What the Announcement Practically Means for Reporting Institutions
The Announcement stresses particular emphasis on several aspects of the self-certification process that RFIs should consider when assessing their existing CRS compliance procedures.
- Self-certification should be treated as a different part of the CRS onboarding process.
For new financial accounts, the self-certification must be obtained separately from the account-opening documentation. RFIs should therefore ensure that their onboarding processes clearly capture the required CRS certification rather than relying solely on general customer information collected during account opening.
- The information provided in the self-certification must be reviewed rather than merely collected.
The Announcement restates the requirement to assess the reasonableness or validity of the self-certification using information available during the onboarding process, including relevant KYC and AML records. If information contained in the self-certification is inconsistent with other information available to the RFI, the institution may need to clarify before relying on the certification. The practical implication is that RFIs should be able to demonstrate that the information provided by the account holder was subject to further review.
- Third, entity classification should receive appropriate attention during onboarding.
An incorrect classification may affect whether the RFI is required to identify and obtain information concerning the Controlling Persons behind an entity. This is particularly relevant for Passive NFEs, where the CRS requires the institution to look beyond the entity itself. RFIs should therefore ensure that the basis for classifying an entity as a Financial Institution, Active NFE, or Passive NFE is properly understood and consistently applied.
- Fourth, supporting documentation should be properly maintained.
The Announcement stresses the importance of maintaining valid self-certifications and the documentation relating to the identification process. Institutions may struggle to demonstrate the reasonableness of certifications if they cannot show how information was reviewed.
Conclusion
The Announcement does not fundamentally change Indonesia’s CRS self-certification requirements as it has been regulated under MoF Reg 108/2025. Its importance lies in the DGT’s specific emphasis on how valid self-certifications are obtained, checked, documented, and maintained.
For RFIs, the key takeaway is that, CRS compliance does not end when a self-certification form is collected. Institutions should also ensure that the correct certification has been obtained, that the information has been appropriately reviewed, that entity classifications are properly determined, and that the supporting documentation can be readily evidenced.
For further information, please contact:
MetaLAW, Legal & Tax Consultant, Jakarta, Indonesia
general@metalaw.id
