Coordinating Minister for the Economy to Review Criteria for Corporations Subject to Global Minimum Tax

Jakarta, investortrust.id — Coordinating Minister for the Economy Airlangga Hartarto announced that the government will delve into the application of the global minimum tax, or GMT, regulations to ensure it does not disrupt existing tax incentives for investors.

The government, through the Ministry of Finance, issued Minister of Finance Regulation No. 136 of 2024 concerning the imposition of the global minimum tax on December 31, 2024. These provisions will take effect in the 2025 tax year.

"We need to look first at the criteria for multinational corporations," said Airlangga, after attending the national deliberation of the Indonesian Chamber of Commerce and Industry (Kadin) at the Ritz Carlton Hotel, Jakarta, Thursday, January 16, 2025.

He hopes that the implementation of GMT will not interfere with the tax incentives already provided by the government, such as tax holidays. "We must ensure that what has been given is not taken advantage of by other countries," he said.

Previously, Head of the Fiscal Policy Agency Febrio Kacaribu stated that according to the issued regulations, GMT will be effective in the 2025 tax year. This GMT regulation is part of Indonesia's accession to the OECD under pillar two and has received support from over 140 countries. Currently, more than 40 countries have implemented these provisions starting in 2025.

"This initiative aims to minimize unhealthy tax rate competition by ensuring that multinational companies with a global consolidated turnover of at least 750 million euros pay a minimum tax of 15% in the countries where they operate. This provision does not affect individual taxpayers and MSMEs," he said.

The implementation of the global minimum tax underscores the government's commitment to creating a healthy and competitive investment climate. With this policy, tax no longer becomes the primary factor in determining investment destinations.

"With this provision, tax avoidance practices, such as through tax havens, can be prevented. We welcome this agreement as it is very positive in creating a fairer global tax system," he said.