TaxPrime Newsletter: Global Minimum Tax (GMT) Regulation under PMK-136/2024
Indonesia has officially implemented the Global Minimum Tax (GMT) under PMK-136/2024, effective 1 January 2025, aligning with the OECD/G20 Pillar Two GloBE Rules. This regulation ensures that Multinational Enterprise (MNE) Groups meet a minimum Effective Tax Rate (ETR) of 15% in every jurisdiction where they operate. The scope of GMT applies to MNE Groups with consolidated revenue exceeding EUR 750 million in at least two of the four preceding fiscal years. If an MNE’s ETR falls below 15%, a top-up tax is imposed, following a priority order: Qualified Domestic Minimum Top-Up Tax (QDMTT) in the jurisdiction where the entity operates, followed by the Income Inclusion Rule (IIR) at the Parent Entity’s jurisdiction, and finally, the Undertaxed Profits Rule (UTPR) for other jurisdictions. To ease compliance in the first three years, Indonesia has introduced transitional safe harbor provisions, allowing entities to qualify for exemptions based on CbCR data through three simplified tests.
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