According to an update from the OECD, Indonesia deposited on 10 November 2022 an updated notification confirming the completion of its internal procedures for the entry into effect of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) for its covered agreement (tax treaties). The updated notification includes 6 covered agreements in addition to the 27 agreements previously notified. The 6 additional covered agreements include Indonesia's tax treaties with China, Hong Kong, Romania, Seychelles, Spain, and Thailand.
The notification confirming the completion of internal procedures is required because Indonesia has taken the reservation that for the MLI to become effective, Indonesia must first deposit such a notification. As such, the provisions of the MLI will generally apply for the 6 additional notified covered agreements:
- with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after 1 January 2023; and
- with respect to all other taxes, for taxes levied with respect to taxable periods beginning on or after 10 June 2023.
For Indonesia's own application of the MLI in respect of other taxes, however, the MLI will apply for other taxes levied with respect to taxable periods beginning on or after 1 January 2024.