Indonesian Government Issues Long-Awaited Decree On Beneficial Ownership
On March 1st, President Joko Widodo signed the Presidential Decree No. 13/2018 on beneficial ownership, which enables authorities to identify the beneficial owners of firms and cooperatives, among other institutions.
The decree will help to curb money laundering and terrorism funding practices.
Experts have said it will also provide a legal basis for the tax authority to otain additional data in its pursuit of recalcitrant taxpayers who benefit from their ownerships of corporations.
The new rule will require institutions like corporations, foundations, cooperatives, limited partnerships and firm federations to submit the identities of their respective beneficial owners to the authorities. They will also be required to update this information annually.
The deputy chairman of the Financial Transaction Reports and Analysis Center (PPATK) Dian Ediana Rae has said that the decree is also part of Indonesia’s efforts to join the Automatic Exchange of Information (AEOI), a global initiative to fight tax evasion and tax avoidance.
Before the issuance of the decree, Dian said the PPATK had only been able to identify the beneficial owners of companies through numerous investigation processes. Now, those who directly and indirectly receive benefits from corporations will be known from the start.
The decree is part of Indonesia’s efforts to comply with the requirements set by the Global Forum, a team under the Organisation for Economic Cooperation and Development (OECD) that supervises the implementation of the AEOI.
The country is set to fully participate in the AEOI by September this year, which will enable its tax office to exchange data on the financial accounts of taxpayers with other tax authorities under the OECD.