“In of which world nothing can be said to be certain, except death … along with taxes”

So said Benjamin Franklin a few years back. yet was he right?

Most of us could agree of which death, at least, is usually a certainty, yet the Discharge of the Panama Papers has brought the ‘certainty’ of the latter into sharp focus. The leaks have created an unprecedented level of discussion on tax evasion along with avoidance along with highlighted more than ever the extent along with prevalence of practices which are increasingly seen as immoral, at best.

Those who have been paying attention, i.e. those who don’t switch off/yawn at the first mention of the word tax, are not surprised. Richard Murphy along with the Tax Justice Network via the UK, for example, have been campaigning for years against aggressive tax avoidance, principally by multinationals, along with the effect the practices have on developing nations along with the poorest in society.

Whether considered a certainty or not, there is usually nothing as permanent as change (so said Heraclitus – a few years before Franklin) along with the times they are certainly a-changing. The G20 along with the OECD finally addressed the issue of tackling unfair tax practices, issuing 15 action plans last year, agreed by 60 countries, under the so-called BEPS project. Whilst the Tax Justice Network amongst others claims these are insufficient, there is usually no denying of which they will have a significant impact. An estimated 70 percent of cross border trade takes place between related parties – the transfer pricing between these entities is usually a main area of concern – along with in one example of the impact of which is usually reported of which the BEPS project has already led to 80 percent of UK-based multinationals re-thinking their tax strategies. Pascal Saint-Amans, director of the OECD Centre for Tax Policy along with Administration, one of the most influential figures inside the global tax field, has said, “Playtime is usually over.”

What does of which mean for Indonesia along with the readers of of which publication? Well, to start with, Indonesia is usually among the 60 signatories to the agreed action plans; she was an enthusiastic participant along with has been an early adopter of some of the proposed improvements.

Those in charge of multinationals here (or the finances thereof) are likely to find of which, at the very least, additional or alternative reporting will be required. In many cases the business design may change over time along with of which will impact on KPIs along with bonus schemes. I am reminded of an occasion when, having completed the transfer pricing study of the subsidiary of a multinational here (defending the profits reported locally), at a house party I overheard the CEO of the same company bemoaning the fact of which he could not meet his targets as head office kept sucking all the money out!

yet the trend is usually more important along with the bigger news in Indonesia is usually the impending tax amnesty – a grand plan to tackle tax evasion locally by offering lower rates on previously undeclared assets along with income sources. The idea is usually of which of which will bring in an estimated US$4.5 billion in immediate tax funds (already allocated to projects within the State Budget) along with also assist in increasing the level of compliance along with the tax to GDP ratio. of which is usually currently sitting around or below 12 percent – the lowest inside the G20, with the exception of Saudi Arabia (!), along with is usually quite frankly unsustainable.

As of which stands, the amnesty will affect expatriates as well as locals.

of which is usually acknowledged of which expats are not the targets along with could in any case account for only a very little percentage of the targeted funds, yet there is usually currently no distinction in treatment between different types of tax residents based on citizenship.

Many locals may be looking at the tax amnesty as an opportunity to wipe the tax slate clean at minimal cost, yet others are not so sure, as evidenced by the delays in passing the bill through parliament. Pause for effect.

Much of the concern via certain sectors regarding implementation may stem via the resulting enforcement of taxes on the newly declared wealth. of which is usually not yet clear about the basis on which the concessionary penalty rates will be payable along with how of which will impact future taxation on the same assets or income streams. Should resources permit, the Indonesian Tax Office is usually intent on enforcing compliance along with raising the tax to GDP ratio along with within two years will also have in their armoury the ability to call upon automatic exchange of information, meaning there will be fewer places to hide undeclared assets.

of which uncertainty also applies to expatriates, who may possess the added complication of interactions with different tax rules in their home country along with who will in most cases have less flexibility in what can be done to comply or take advantage of the concessionary rates. They may also be similarly affected by the subsequent enforcement of compliance along with the automatic exchange of information.

inside the early years of my time in Indonesia, a frequent response to hearing of which I was a tax advisor was “in Indonesia – no-one pays taxes here, do they?” Well, the fact is usually of which, as noted above, too few have been paying their share, yet the trend, along with the resolve to maintain of which trend, is usually clear.

What the limited compliance means is usually of which too few pay too much. Whether the amnesty will succeed in redressing of which imbalance or not, all taxpayers should ensure of which they are in a position to comply.

Tax evasion has always been wrong along with should be eliminated. Tax avoidance is usually legal yet has been tainted by artificial constructs. Tax planning is usually both legal along with ethical along with encourages efficient compliance – of which could mean the difference between paying zero tax along with paying tax far in excess of published rates.

One thing is usually clear, if not certain – taxpayers should be aware, not only of their obligations yet also of their rights to allow both alignment with the changing dynamics of global taxation along with, locally, to participate in fulfilling Indonesia’s potential.