Insights

Indonesia Implements Global Minimum Tax Under BEPS 2.0 Pillar 2

Editorial Team 11 Apr 2025

An overview by PB Taxand, Taxand Indonesia

Indonesia has recently adopted the OECD/G20 BEPS 2.0 Pillar 2 Global Minimum Tax (GloBE) rules via MoF Regulation No. 136/2024, effective from January 1, 2025. The rules apply to Multinational Corporate Groups (MNCs) with annual consolidated turnover ≥ €750 million (met in 2 of the last 4 years), targeting Domestic Tax Subjects and Permanent Establishments.

Key Mechanisms Introduced include:

1. Income Inclusion Rule (IIR): Additional tax imposed on parent entities if group entities are taxed below 15%.
2. Undertaxed Payment Rule (UTPR): Applies when IIR is not enforced, effective from Jan 1, 2026.
3. Domestic Minimum Top-up Tax (DMTT): Imposes a top-up tax if Indonesian entities are taxed below 15%.

Experts from our Indonesian member firm PB Taxand have provided a more detailed examination of these regulations below, which aim to align Indonesia’s tax system with global efforts to combat base erosion and ensure a fair minimum level of taxation.

Read the full analysis here.

Article tags

Indonesia | Pillar Two | Tax