Introductions MAP

Introduction

• This MAP Guidance describes Indonesia's practice in relation to procedures for preventing or resolving taxation not in accordance with the provisions of the tax treaty. Indonesia has made efforts to strengthen the efficiency and effectiveness of the dispute resolution process and minimise incidences of unintended double taxation in light of recent experience and developments, in particular Action 14, Making Dispute Resolution More Effective (the Action 14 Report) of the Base Erosion Profit Shifting (BEPS) project. Indonesia has committed to implementing the minimum standard in respect of:

1. preventing disputes
2. availability and access to MAP
3. resolution of MAP cases
4. implementation of MAP agreements

• The MAP Guidance outlines the MAP process and the use of MAP under the relevant Indonesia Double Taxation Agreements.
• This MAP Guidance should be read in conjunction with the Regulation of the Minister of Finance Number PMK-172/2023 on The Implementation of the Arm’s Length Principles in Transactions Influenced by a Special Relationship.

Definition

Mutual Agreement Procedure, hereinafter referred to as MAP, is an administrative procedure that is stipulated in the Tax Treaty to resolve issues arising from the implementation of Tax Treaty, including transfer pricing issues.

Objectives Of MAP

A MAP request can be made when a person considers that the actions of one or both countries' tax administrations result or will result in taxation not in accordance with the relevant tax treaty. The person may request Competent Authority (CA) assistance under the MAP. The treaties require that the Taxpayer presents his case to the CA of which he is a resident or, if his case comes under non-discrimination provisions, to that of the CA of which he is a national.