PERENCANAAN PAJAK INTERNASIONAL - BAGIAN - 3

Summary

The transcript provides an overview of international taxation principles, highlighting non-taxable entities such as foreign diplomatic offices, international organizations, and foreign officials. It delves into various sources of taxable income, as defined by OECD guidelines, including income from assets, business activities, royalties, and pensions. It further explains the concept of fiscal domicile, which determines the tax obligations of foreign taxpayers, and outlines the importance of certificates of residence. Additionally, the transcript touches on dual residence situations and the tri-breaker rule, which helps resolve conflicting tax residency statuses across jurisdictions.

Takeaways

• 😀 Exemptions from tax subjects include foreign diplomatic missions, representatives, and international organizations.
• 😀 A foreign tax resident's status is determined based on the country where they reside and their beneficial ownership of income.
• 😀 Fiscal domicile refers to the country of residence for tax purposes, which determines the tax obligations for foreign taxpayers.
• 😀 A Certificate of Residence (CoR) is required for foreign taxpayers to prove their fiscal domicile status.
• 😀 A foreign taxpayer’s Certificate of Residence must be signed by an authorized official and valid for up to 12 months.
• 😀 The 'Dual Residence' concept refers to a situation where an individual or entity is considered a tax subject in multiple countries simultaneously.
• 😀 The 'Tri-breaker rule' helps resolve dual residence issues by prioritizing factors like permanent home, center of vital interests, and nationality.
• 😀 International tax law classifies income into 16 categories, including capital gains, salaries, and pensions.
• 😀 International taxation rules are outlined in the OECD's Model Tax Convention on Income and Capital.
• 😀 Foreign taxpayers must use a specific form (DGT) to ensure the proper documentation for their tax residency status under international agreements.

Q & A

What is excluded from being considered a tax subject according to the script?

The following are excluded from being a tax subject: foreign diplomatic missions, foreign officials and their staff, international organizations, and certain foreign entities under specific conditions.

What are some of the types of income categorized in international taxation as per the OECD Model Tax Convention?

The types of income categorized include: income from movable property, business income, income from shipping and aviation, income from special relationships between companies, dividends, interest, royalties, capital gains, income from independent personal services, salaries from employment, directors' remuneration, income of artists and athletes, pensions, government employee income, student income, and other types of income.

What is fiscal domicile and why is it important?

Fiscal domicile refers to the country where an individual or entity is considered a tax resident, determining the country's jurisdiction for taxation purposes. It is important for defining the tax obligations of foreign taxpayers, especially when they receive income from foreign sources.

How is the country of fiscal domicile determined for a foreign taxpayer?

For a foreign taxpayer who does not have a permanent establishment in Indonesia, the fiscal domicile is the country where the taxpayer resides and actually receives income, or where the effective management of the business is located.

What are the key requirements for a foreign taxpayer's domicile certificate?

A foreign taxpayer's domicile certificate must be filled out correctly and signed by the taxpayer, according to the customs of the partner country. It must be certified by an authorized official from the partner country's jurisdiction and submitted along with the tax report.

What is the maximum validity period for a foreign taxpayer's domicile certificate?

The domicile certificate for a foreign taxpayer is valid for a period not exceeding 12 months.

What is the dual residence concept in international taxation?

Dual residence refers to a situation where an individual or entity is considered a tax resident in both their home country and another country simultaneously due to cross-border transactions or activities.

What is the 'tri-breaker rule' in international taxation?

The tri-breaker rule is used to resolve cases of dual residence by applying a series of criteria: 1) Permanent home, 2) Center of vital interest (personal, family, and economic connections), 3) Habitual abode, 4) Nationality, and 5) Mutual agreement procedure between the countries involved.

How is 'center of vital interest' defined in the context of dual residence?

The center of vital interest refers to the place where an individual has the closest personal, family, and economic ties, including the location of their wealth and primary source of income.

What role does the mutual agreement procedure play in resolving dual residency issues?

The mutual agreement procedure allows the tax authorities of two countries to negotiate and resolve issues arising from a taxpayer being considered a resident of both countries under their domestic laws.