Rekomendasi Aksi 4 bertujuan untuk membatasi erosi dasar yang menggunakan biaya bunga untuk mencapai pengurangan bunga yang berlebihan atau untuk membiayai produksi pendapatan yang dikecualikan atau ditangguhkan. Grup multinasional dapat mencapai hasil pajak yang menguntungkan dengan menyesuaikan jumlah utang dalam suatu entitas grup. Hal ini karena biaya bunga diperlakukan sebagai biaya yang dapat dikurangkan dari pajak di sebagian besar negara, namun setiap negara menerapkan pendekatannya sendiri untuk menentukan biaya apa yang dianggap sebagai bunga dan oleh karena itu dapat dikurangkan untuk tujuan perpajakan. Perbedaan akan terus terjadi antar negara mengenai beban bunga yang dapat dikurangkan dan negara-negara akan terus menggunakan definisi bunga mereka sendiri untuk tujuan perpajakan lainnya, misalnya untuk pemotongan pajak. Namun, dalam mengidentifikasi praktik terbaik untuk merancang peraturan guna mengatasi erosi dasar dan pengalihan keuntungan, terdapat manfaat bagi negara-negara yang menerapkan pendekatan yang konsisten terhadap hal-hal yang harus dicakup dalam peraturan tersebut, meningkatkan kepastian bisnis dan memastikan pendekatan yang koheren untuk mengatasi masalah ini di seluruh negara. Oleh karena itu, Aksi 4 Kerangka Inklusif OECD/G20 tentang BEPS mencoba meyakinkan negara-negara anggota mengenai praktik terbaik dan rekomendasi untuk mengatasi masalah tersebut.[1]
Referensi utama dari Aksi 4 didasarkan pada Laporan Pembaruan OECD 2016 berjudul Limiting Base Erosion Involving Interest Deductions and Other Financial Payments Action 4 yang merevisi laporan akhir tahun 2015 dengan judul yang hampir sama. Laporan Update 2016 dipisahkan menjadi dua, Bagian I laporan ini berisi teks laporan tahun 2015 yang menganalisis beberapa praktik terbaik dan merekomendasikan pendekatan yang secara langsung mengatasi risiko-risiko yang diuraikan di atas. Sementara itu, Bagian II, yang merupakan perbedaan dari Laporan tahun 2015, mencakup ringkasan panduan lebih lanjut mengenai elemen desain dan pengoperasian aturan rasio grup berdasarkan rasio bunga bersih/EBITDA grup di seluruh dunia. Laporan Update 2016 juga berfokus pada perhitungan beban bunga bersih pihak ketiga, penghitungan EBITDA grup dan pendekatan untuk mengatasi dampak entitas dengan EBITDA negatif terhadap pengoperasian aturan tersebut. Panduan lebih lanjut pada Bagian II sebenarnya tidak mengubah apa pun yang direkomendasikan dalam Bagian I, melainkan memberikan rincian tambahan untuk membantu negara-negara menerapkan suatu peraturan.[2]
Menurut laporan tersebut, permasalahan tersebut muncul karena grup multinasional dapat memperoleh hasil pajak yang menguntungkan dengan menyesuaikan jumlah utang dalam entitas grup. Pengaruh peraturan perpajakan terhadap lokasi utang dalam kelompok multinasional telah menciptakan kemudahan kelompok multinasional untuk melipatgandakan tingkat utang pada tingkat entitas kelompok individu melalui pembiayaan intra-grup. Selanjutnya, risiko BEPS di area ini dapat muncul dalam tiga skenario dasar. Pertama, Kelompok yang menempatkan tingkat utang pihak ketiga yang lebih tinggi di negara-negara dengan pajak tinggi. Kedua, Grup menggunakan pinjaman intra-grup untuk menghasilkan pengurangan bunga yang melebihi beban bunga pihak ketiga aktual grup. Terakhir, Grup yang menggunakan pendanaan pihak ketiga atau intra-grup untuk mendanai perolehan pendapatan bebas pajak. [3]
The use of third party and related party interest is perhaps one of the simplest profit-shifting techniques in international tax planning. The fluidity and fungibility of money make it a relatively simple exercise to adjust the mix of debt and equity in a controlled entity. In particular, the deductibility of interest expense can give rise to double non-taxation in both inbound and outbound investment scenarios. Parent companies are typically able to claim relief for their interest expense while the return on equity holdings is taxed on a preferential basis, benefiting from a participation exemption, preferential tax rate or taxation only on distribution. On the other hand, subsidiary entities may be heavily debt financed, using excessive deductions on intra group loans to shelter local profits from tax. Taken together, these opportunities surrounding inbound and outbound investment potentially create competitive distortions between groups who are operating internationally and those operating in the domestic market. The interest payments are deducted against the taxable profits of the operating companies while the interest income is taxed at comparatively low tax rates or not at all at the level of the recipient. This is despite the fact that in some situations the multinational group may have little or no external debt.[4]
Therefore Action 4 focused on the use of all types of debt giving rise to excessive interest expense or used to finance the production of exempt or deferred income. In particular, this 2016 report established rules that linked an entity’s net interest deductions to its level of economic activity within the jurisdiction, measured using taxable earnings before interest income and expense, depreciation and amortization (EBITDA). This approach includes three elements: a fixed ratio rule based on a benchmark net interest/EBITDA ratio; a group ratio rule which may allow an entity to deduct more interest expense depending on the relative net interest/EBITDA ratio of the worldwide group; and targeted rules to address specific risks. As a minimum this should apply to entities in multinational groups. [5]
Fixed ratio rules premise that an entity should be able to deduct interest expense up to a specified proportion of EBITDA, ensuring that a portion of an entity’s profit remains subject to tax in a country. The underlying benchmark fixed ratio is determined by a country’s government and applies irrespective of the actual leverage of an entity or its group. Interest paid to third parties, related parties and group entities is deductible up to this fixed ratio, but any interest which takes the entity’s ratio above this benchmark is disallowed. The key advantage of a fixed ratio rule is that it is relatively simple for companies to apply and tax administrations to administer. On the other hand, a fixed ratio rule does not take into account the fact that groups operating in different sectors may require different amounts of leverage, and even within a sector groups may adopt different funding strategies for non-tax reasons. [6]
Therefore, to reduce the impact on more highly leveraged groups, the 2016 report also recommended that countries consider combining a fixed ratio rule with a group ratio rule. Combining this with the group ratio rule would allow an entity in a highly leveraged group to deduct net interest expense in excess of the amount permitted under the fixed ratio rule, based on a relevant financial ratio of the worldwide group. This means that the benchmark fixed ratio can be kept low and making sure the fixed ratio rule is effective in combating base erosion and profit shifting, while the group ratio rule compensates for the special case on highly leveraged groups. Regarding benchmark fixed ratio, the 2016 report recommended that countries set their benchmark fixed ratio within the corridor of 10% to 30%. However, it should be recognized that countries differ in terms of their legal framework and economic circumstances and, in setting a benchmark fixed ratio within the corridor which is suitable for tackling base erosion and profit shifting. Therefore, a country should therefore take into account a number of factors, including the following[7]:
- A country may apply a higher benchmark fixed ratio if it operates a fixed ratio rule in isolation, rather than operating it in combination with a group ratio rule.
- A country may apply a higher benchmark fixed ratio if it does not permit the carry forward of unused interest capacity or carry back of disallowed interest expense.
- A country may apply a higher benchmark fixed ratio if it applies other targeted rules that specifically address the base erosion and profit shifting risks to be dealt with under Action 4.
- A country may apply a higher benchmark fixed ratio if it has high interest rates compared with those of other countries.
- A country may apply a higher benchmark fixed ratio, where for constitutional or other legal reasons (example: EU law requirements) it has to apply the same treatment to different types of entities which are viewed as legally comparable, even if these entities pose different levels of risk.
- A country may apply different fixed ratios depending upon the size of an entity’s group.
To ensure that countries apply a fixed ratio that is low enough to tackle BEPS, while recognizing that not all countries are in the same position, the recommended approach includes a corridor of possible ratios of between 10% and 30%. The report also includes factors which countries should take into account in setting their fixed ratio within this corridor. The approach can be supplemented by a worldwide group ratio rule which allows an entity to exceed this limit in certain circumstances and deduct interest up to the level of the net interest/EBITDA ratio of its worldwide group.[8]
The implementation of Action 4 according to OECD, as at mid-2019, a number of OECD and Inclusive Framework member states have adopted interest limitations rules or are in the process of aligning their domestic legislation with the recommendations of Action 4. In 2019, all EU Member States apply an interest cap that restricts a taxpayer’s deductible borrowing costs to generally 30 percent of the taxpayer’s EBITDA. Various other countries have also taken steps to limit interest deductibility such as but limited to Argentina, India, Malaysia, Norway, South Korea or some are in the process of aligning their domestic legislation with the recommendations of Action 4 such as Japan, Peru and Vietnam.[9]
In Indonesia the implication of BEPS Action 4 might be closely related with Article 18 Paragraph 1 Income Tax Law. Later on, the Ministry of Finance has released Minister of Finance Regulation No.169/PMK.03/2015 (The 2015 MFR) regarding determination of the ratio between debt and capital of the company for purposes of calculating income tax. According to an article “Tinjauan Komprehensif atas Peraturan Pembatasan Interest Deductions and Other Financial Payments di Indonesia” on Journal of Applied Accounting and Taxation, Indonesia’s regulation related with Action 4 or the 2015 MFR actually in line with recommendations in Action 4. The original aspects in the Action 4 according to the article comprise 10 aspects, but the article simplifies it into 7 and Indonesia’s regulation relates with 6 aspects. Even though there are different approaches on some aspects between Indonesia’s regulation and Action 4 Recommendation, it represents Indonesia’s point of view on each aspect. The differences show regulations in Indonesia are still modest, making it easier for taxpayers and potential investors to fulfill their tax obligations with a relatively low tax compliance cost. The definition of elements used in Indonesia already meets the definition used in general. Likewise, the definition of interest deductions and other financial payments and the purpose of these regulatory restrictions have followed the currently developing capital structure instruments. [10]
Then it could be summarized that Action 4 recommendations aim to limit base erosion that use of interest expense to achieve excessive interest deductions or to finance the production of exempt or deferred income. Action 4 itself recommends an approach that includes three elements: a fixed ratio rule based on a benchmark net interest/EBITDA ratio; a group ratio rule which may allow an entity to deduct more interest expense depending on the relative net interest/EBITDA ratio of the worldwide group; and targeted rules to address specific risks. As a minimum this should apply to entities in multinational groups. Indonesia might not yet fully align its regulation with Action 4 since Indonesia released related regulation at the same time of 2015 report being released and until now the 2015 MFR still in effect without any amending. Although there are similarities of 2015 MFR with Action 4 aspect and also the discussion of interest deduction has been raised years before, it is still unidentified that the 2015 MFR is being influenced by the discussion of action 4. Proved by the difference approach between Indonesia 2015 MFR and Action 4 Recommendations.
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[1] OECD (2016), Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 – 2016 Update: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264268333-en.
[2] Ibid
[3] Ibid
[4] OECD (2016), Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 – 2016 Update: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264268333-en.
[5] Ibid
[6] Ibid
[7] OECD (2016), Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 – 2016 Update: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264268333-en.
[8] Ibid
[9] https://www.oecd.org/tax/beps/beps-actions/action4/
[10] Nurul Ismah dan Agustin Setya Ningrum (2020), Tinjauan Komprehensif atas Peraturan Pembatasan Pemotongan Bunga dan Pembayaran Keuangan Lainnya di Indonesia , Jurnal Akuntansi Terapan dan Perpajakan Vol. 5, No.1, Maret 2020, 70-84
