NEW PENSION AND OLD AGE SECURITY REQUIREMENTS

The Government of Indonesia has recently issued a series of regulations in an attempt to further regulate pension securities and amend the old age security programs in Indonesia, namely Government Regulation No. 45 of 2015 on the Management of the Pension Security Program (“GR 45/2015”) and Government Regulation No. 46 of 2015 as amended by Government Regulation No. 60 of 2015 on the Management of the Old Age Security Program (“GR 46/2015”).

UPDATE ON THE OBLIGATION TO USE RUPIAH AND EXEMPTIONS

As an update to our previous Newsletter regarding Regulation No. 17/3/PBI/2015 regarding the Obligation to Use Rupiah in the Territory of the Republic of Indonesia (“BI Regulation”), Bank Indonesia (“BI”) has issued an implementing regulation regarding the mandatory use of Rupiah under BI Circular Letter No. 17/11/DKSP (“Circular 17”).

BANK INDONESIA SETS A NEW LIMIT FOR PURCHASING FOREIGN CURRENCY (US$)

In an attempt to assist the stabilization of the Indonesian currency, Bank Indonesia (BI) changed the limit of the maximum value of foreign currency (US$) purchased through a spot transaction which is done without a specific purpose (underlying documents), from US$ 100,000 per month for each customer/foreign party to US$ 25,000 or equivalent per month for each customer.

“THIN CAPITALIZATION” BECOMES TAX UNFRIENDLY - NEW REGULATIONS

Under Article 18 (1) of Law No. 7 of 1983 on Income Tax (as lastly amended by Law No. 36 of 2008 – “Income Tax Law”), the Minister of Finance (“MOF”) is authorized to determine the debt to equity ratio (“DER”) of corporate taxpayers for the income tax calculation purposes.

CONSULTANCY SERVICES COMPANIES - NEW REGULATION

On 15 July 2015, the Indonesian Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) issued a circular letter on the new mechanism and procedures for obtaining Principle License applications, aimed particularly at businesses in the consultancy services sector, as an effort to boost investors’ commitment and investment realization (formally, Circular Letter No. 16 of 2015 concerning the New Mechanism and Procedures to Submit Foreign Investment Principle License Application at the Central One-Stop Integrated Services of BKPM for Consultation Services Other than Public Works Sector and Any Other Certain Business Sectors - “New Certain Business Sectors Mechanism”).