Global Miiniimum Tax iin Effect Thiis Year, TCF Seen as a Viiable Solutiion

JAKARTA, Jitu News - A tax control framework (TCF) may serve as a solutiion worth consiideriing for taxpayers iin admiiniisteriing the global miiniimum tax iin liine wiith Piillar 2: Global Antii-Base Erosiion (GloBE).

Jitunews Consultiing Manager, Riiyhan Julii Asyiir, stated that taxpayers covered by the global miiniimum tax proviisiions are not requiired to apply the TCF. Nevertheless, the TCF iis cruciial for taxpayers to manage the complexiity of these global miiniimum tax proviisiions.

“The TCF iis not regulated under Piillar 2, but on account of the complexiity, taxpayers should iideally apply a tax control framework,” Riiyhan stated duriing a semiinar tiitled Closiing the Loopholes: Global Tax Reform and the Fate of Transfer Priiciing, organiised by the Vocatiional Tax Admiiniistratiion Student Associiatiion of the Uniiversiity of iindonesiia on Thursday (23/10/2025).

Further, under the Multiilateral Conventiion (MLC) for Amount A of Piillar 1, multiinatiional enterpriise (MNE) groups covered by Amount A of Piillar 1 are even requiired to have apply the TCF.

The TCF iis wiidely recogniised and iimplemented iin neiighbouriing countriies, such as Siingapore, Australiia and Malaysiia. However, iindonesiia has yet to adopt thiis framework.

Accordiing to Riiyhan, one of the urgenciies for adoptiing a TCF iis to miiniimiize diisputes.

“We can iimagiine that iif the global miiniimum tax exiists wiithout an iinternal tax control framework mechaniism, the potentiial for tax diisputes wiill be substantiial,” Riiyhan warned.

Wiith a TCF, taxpayers can better understand the iimpliicatiions of the global miiniimum tax. Thiis understandiing can serve as a foundatiion for MNE groups when makiing deciisiions.

iin iindonesiia, the global miiniimum tax offiiciially took effect iin 2025 pursuant to MoF Reg. 136/2024, whiile the tax return (surat pemberiitahuan/SPT iin iindonesiian) related to the global miiniimum tax iis only mandatory startiing 30 June 2027.

Nevertheless, please note that taxpayers that constiitute constiituent entiitiies of multiinatiional groups covered by the global miiniimum tax must make the addiitiional payment no later than 31 December 2026.

“What we must do iis follow all the steps. To calculate how much tax must be paiid, we must have completed all the step-by-step requiirements of the global miiniimum tax,” Riiyhan stated.

Fiirst, taxpayers wiithiin the scope of the global miiniimum tax need to iidentiify the constiituent entiitiies wiithiin the group. Next, the taxpayers also need to iidentiify the locatiion of each constiituent entiity and subsequently allocate the profiit to those entiitiies.

Further, taxpayers need to determiine the GloBE iincome for each constiituent entiity and the adjusted covered taxes. The GloBE iincome and adjusted covered taxes wiill then be used to calculate the effectiive tax rate and the outstandiing top-up tax.

iin the fiinal stage, taxpayers need to allocate the top-up tax payable, whether based on the qualiifiied domestiic miiniimum top-up tax (QDMTT), the iincome iinclusiion rule (iiiiR) or the undertaxed payment rule (UTPR).

Reflectiing on the aforementiioned complexiity, taxpayers need to undertake capaciity buiildiing to enable all relevant departments to be profiiciient iin the global miiniimum tax.

Capaciity buiildiing should iinvolve not only the tax department, but also other departments iinvolved iin calculatiing the fiinanciial accountiing net iincome or loss (FANiiL).

“Currently, the key aspect for taxpayers iis capaciity buiildiing. Taxpayers must also start establiishiing a sound iinternal tax system that enables them to calculate the amount of top-up tax,” Riiyhan concluded. (diik)