Implementing the MAP Outcome

• Director-General of Taxes follows up the MAP outcome by issuing Decree of Director General within one month since:

1. the acceptance of written notification from the Competent Authority of the Tax Treaty Partner that Mutual Agreement is implementable; and
2. the delivery of the written notification to the Competent Authority of the Tax Treaty Partner that the Mutual Agreement is implementable.

Scope for Granting Relief

• In the event that the Indonesian CA concludes that an action has led to taxation not in accordance with the provision of the tax treaty (and that the MAP request is admissible and justified), the Indonesian CA will first consider if the issue can be resolved on a unilateral basis. In this case, the Indonesian CA may grant relief, under the treaty's provisions, without the need to enter into a bilateral discussion with the other tax authority.
• In the event that the Indonesian CA cannot resolve the issue unilaterally, then Indonesian CA will take up the matter with the CA of the treaty partner. If discussions between the CAs provide adequate evidence to satisfy the Indonesian CA that an adjustment made by the other tax authority is in accordance with the tax treaty, for instance, it was required in order to comply with the arm's length principle, the Indonesian CA will grant a corresponding adjustment.
• In the event that the CAs can establish that the primary adjustment was excessive (a non- arm's length amount), they will agree to a course whereby the primary adjustment is reduced, and the remaining adjustment is relieved in an amount that reflects an arm's length result. In case, however, the Indonesian CA remains dissatisfied, there's no obligation on it to grant relief.

Methods for Granting Relief

• As stipulated in the relevant Tax Treaty, any agreement reached during MAP will be implemented notwithstanding any time limits in the domestic laws.

Relief may be granted through recalculating the tax payable, for instance, by amending the Notice of Tax Assessment; amending the Objection Decision; amending the Deduction or Cancellation of Incorrect Notice of Tax Assessment; or refunding the tax should not have been payable (in case of withholding tax).