LTRO Discussed Tax Aspects of Corporate Actions

The Tax Counselor Team of the Large Taxpayers Regional Tax Office (LTRO) presented another episode of SINIAR 310 through its official YouTube channel at Monday, 27th October 2025. The episode featured the theme “Tax Aspects of Mergers, Consolidations, and Business Spin-offs.”

This podcast was hosted by Andik Tri Cahyono and featuresd Agung Adma Wijaya, a Tax Counselor, as speaker. In his opening remarks, Agung emphasized that corporate restructuring such as mergers, consolidations, and spin-offs were not merely business strategies but also had significant implications for tax obligations.

“Without proper understanding, the fiscal risk could be substantial,” Agung stated.

Agung explained the main legal provisions that governed asset transfers in restructuring, including Article 4 paragraph (2) of the Income Tax Law, Government Regulation Number 34 of 2016, and PER-8/PJ/2025 concerning the procedure for applying book value. He noted that, in principle, asset transfers constituted taxable income unless they met the requirements for exemption.

One of the key facilities discussed was the use of book value, a mechanism that allowed asset transfers in restructuring to be deferred from taxation because they did not result in immediate economic gain. This facility could only be applied if it had received prior approval from the DGT and was conducted as part of a legitimate business restructuring.

The podcast also covered various forms of restructuring—mergers, consolidations, spin-offs, and acquisitions—and their different tax treatments. In addition, the discussion highlighted the Tax Exemption Certificate (SKB) for Final Income Tax, as regulated under Minister of Finance Regulation Number 81 of 2024.

Concluding the session, Agung reminded taxpayers to always prepare clear business justifications and complete documentation for every restructuring process.

“The DGT would assess whether the restructuring was carried out for genuine business purposes or merely to avoid tax,” he asserted.

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