With the increasing volume of cross-border transactions continues to increase, tax avoidance practices have grown more sophisticated. A prevalent form of tax avoidance involves the abuse of Double Taxation Avoidance Agreements (DTAAs) or profit shifting to jurisdictions with lower tax rates.
In addressing these challenges, the Director General of Taxes (DGT) can no longer rely solely on voluntary disclosures from taxpayers. Instead, international tax transparency has become a critical element for the comprehensive identification of tax-related information. In response, the DGT has issued consolidated regulations that unify several previous provisions concerning information exchange, namely through the Minister of Finance Regulation Number 39 of 2027 on Procedures for the Exchange of Information Based on International Agreements and the Director General of Taxes Regulation Number 10/PJ/2025 (PER-10/2025).
Furthermore, tax information exchange must be conducted pursuant to international agreements, which may take the following forms:
- Double Taxation Avoidance Agreements (DTAAs) or Tax Treaties;
- Tax Information Exchange Agreements (TIEA);
- Convention on Mutual Administrative Assistance in Tax Matters;
- Multilateral or Bilateral Competent Authority Agreements;
- Intergovernmental Agreements (IGA); or
- Other bilateral or multilateral agreements.
Referring to Article 3, paragraph (2) of PER-10/2025, there are three types of tax information exchange can be conducted with partner countries, namely:
- Exchange of Information on Request (EoIR);
- Spontaneous Exchange of Information (SEoI);
- Automatic Exchange of Information (AEOI).
According to Article 1, paragraph (7) of PER-10/2025, EoIR refers to the exchange of information conducted upon request by authorized officials in Indonesia to their counterparts in partner countries, or vice versa, regarding specific tax issues. The scope of information includes:
- Identification and ownership details of beneficial owners;
- Accounting information;
- Banking information;
- Tax-related information;
- Other relevant information.
Moreover, according to Article 1, paragraph (8) of PER-10/2025, SEoI is an information exchange initiated proactively by authorized officials in Indonesia by providing information considered relevant for the tax interests of partner countries directly, without a prior request. The scope of information includes:
- Transactions or activities between Indonesian taxpayers and taxpayers in partner countries;
- Information related to domestic tax regulations and their implementation;
- Other information deemed beneficial for tax purposes.
Automatic Exchange of Information (AEOI), as described in Article 1, paragraph (9) of PER-10/2025, involves periodic, systematic, and ongoing exchange of tax information conducted by authorized officials at predetermined intervals. The scope of information includes:
- Data related to tax withholding;
- Other tax-related information in accordance with international agreements.
It is expected that the implementation of these regulations will enhance tax transparency, thereby reducing opportunities for cross-border tax avoidance. Additionally, the tax authorities’ database for auditing cross-border transactions will be significantly strengthened.
However, it is important to emphasize that all information exchanged under these schemes is confidential. Therefore, every unit within the DGT that receives exchanged information must follow established procedures for safeguarding, confidentiality, storage, reporting, and oversight. Such information may only be used within the scope of the DGT’s official duties and functions.
With proper implementation, tax information exchange will serve as a strategic instrument in establishing a more equitable, transparent, and fiscally just tax system.
By Olina Rizki Arizal – Partner
TBrights is a tax consultant in Indonesia that is currently an Integrated Business Service in Indonesia that can provide comprehensive tax and business services.
Refrence:
1. T he Minister of Finance Regulation Number 39 of 2027 on Procedures for the Exchange of Information Based on International Agreements.
2. The Director General of Taxes Regulation Number 10/PJ/2025 (PER-10/2025).
