Four variable that affects globalization o Tax certainty
1. Interdependency International tax cooperation & collaboration
2. Cross-borderless: flow of services is increasing, Indonesia is active, has top tax regulation in ASEAN investing, sizing of equities are not the priority o Tax treaties UMKM can also be the main producer because o International community of globalization. Increase competitiveness o Group of 20 3. International transactions o Inclusive framework on BEPS (15) 4. Universal norms and values o Global forum on transparency and 5. Global business players exchange of information 6. International cooperation and collaboration to o Forum on tax administration maintain harmony o Regional community 7. Taxation issues o Study group on Asian tax administration a. Double taxation & non-taxation: and research Economic distortion as an individual o Asia-pacific economic cooperation b. Aggressive tax planning o ASEAN tax forum c. Harmful tax competitions Promoting transparency for tax purposes d. Hybrid mismatch arrangement: different o Exchange of information (EoI) by request kinds of contract o Automatic EoI i. In doing partnership in o Simultaneous EoI Singapore, there is o Law No. 9 of 2017 concerning Access of transparency; utilizing the Financial Account Information for tax purposes amount of tax liability Common approaches dealing with BEPS Information & Communication Technology (ICT) Digital economy 1. Disruption & mindset 1. Coherence 2. New business models & arrangements a. Hybrid Mismatch arrangements 3. Start-up, over the top, Airbnb, financial b. CFC rules technology, cryptocurrency, and bitcoin c. Interest deductions 4. Peer-to-peer economy d. Harmful tax practices 5. Digital economy 2. Substance 6. Life cycle of technology obsolescence a. Preventing tax treaty abuse 7. Huge investment b. Avoidance of PE status 8. Big data management: c. Transfer pricing intangibles a. Analytic d. Transfer pricing: risks & capital b. Predictive e. Transfer pricing: high risk transactions c. Prescriptive 3. Transparency 9. Taxation issues a. Methodologies and data analysis a. Division of taxing rights b. Mandatory disclosure rules b. Tax administrative complexity Mandatory for WP and its promoter. c. Low tax compliance…. Promoter is people who makes ethics for Global Economic Growth the continuity of tax 4 world economic pillars: USA, PRC, EU, Japan c. TP documentation and CbC reporting Sliding economic growth d. Dispute resolution Modernized tax administration CBCR, MAP (Mutual Agreement Procedure) More taxation revenue to finance the economic Multilateral instrument recovery programs: fiscal stimulus, government Tax certainty expenditure, government private partnership 1. Domestic remedies: objection and appeal FATCA: foreign entities to IRS, OVDP, Tax 2. Dispute resolution MAP; dispute prevention Amnesty APA (Advanced Pricing Agreement) Strategic Policy towards The Fragile International 3. Tax education & counseling Taxation Landscape > problem arises: asymmetric 4. Level playing field information 5. Non-discrimination o International tax cooperation & collaboration 6. Building trust: corruption eradication, public o Promoting transparency for tax purpose services & infrastructures, and services Expedite… improvement o Common approaches dealing with BEPS Base Erosion and Profit Shifting