Tax

In every facet of the business, tax always comes into play – in a developing and emerging economy like Indonesia, tax can be somewhat of an unfamiliar glossary to investors.  The principle of taxation may be similar across the globe, but the tax laws and regulations vary very much from country to country.   Therefore, it is of paramount importance for every taxpayer especially business entities and individuals having multiple income sources to seek tax advice and conduct tax planning in advance to avoid un-necessary costs caught in surprise. 

At RSM, we are equipped and ready to serve your needs for tax planning and advice, from the mundane tax compliance advisory to complex transactional tax advisory. 

We are confident that you will be able to benefit from our tax advisory services as our team comprises a group of experienced tax professionals who possess deep local tax knowledge and have handled a wide range of tax cases with sharp and keen observations to future tax development. 

We are ready to discuss and understand your business structure or transactions under contemplation and help you identify relevant tax implications from Indonesia perspective as well as recommend measures to mitigate relevant tax risks.  We set apart ourselves in providing tax advisory as we don’t only provide theoretical responses to your queries but put strong emphasis in blending in the practical scenarios based on our extensive experience to make sure that you can based on which derive the best possible decision for your situation. 

Our business tax advisory team is ready to provide you with full range of services – such as:

• Tax advisory to understand the risks and their tax mitigation
• Indirect tax planning and transaction
• Tax planning, policy and advocacy
• Tax incentives options and best suitable for your business and activities
• Preparation and implementation of Standard Operating Procedures (SOP) of your operation to identify and mitigate any tax risks 

Is your approach to tax seamless globally?

With globalisation and increased cross-border activities, internationally active businesses are looking to align their global tax position with their overall business strategies and goals to maintain competitive advantage and provide value to shareholders. When you are operating across a range of global markets, it takes a huge amount of time and dedication to stay on top of the ever-increasing complexity of tax rules around the world.

RSM specialise in working with organizations that require in-depth, up-to-date knowledge of local rules allied to seamless co-operation between tax professionals in different jurisdictions. Our international tax consultants have the vast knowledge and experience to provide practical, value-added tax planning and cost-effective cross border solutions. We maintain strong professional standards with strong accountability, commitment towards our clients and projects.

Our international tax advisory services include:

• Cross-border tax advisory, and tax planning
• Base Erosion and Profit Shifting (BEPS) implementation – Pillar 1 and Pillar 2 impact and planning
• International tax (re)structuring
• Advice on application of tax treaties and its business implications
• Regional headquarters structures and substance rules
• Tax efficient structuring of employment packages
• International (cross-border) tax disputes, including Mutual Agreement Procedures (MAP)

When it comes to M&A deals, tax structuring is critical and fundamental, whether from the perspective of the purchaser or seller, value creation and protection is vital in a time of change, be it merger, acquisition, disposal, IPO or other refinancing.

Our team of M&A tax possess extensive experience having been involved in diversified and large M&A deals. We will work side by side with you to understand the underlying transaction and your objectives and develop the most efficient structure in terms of acquisition, ongoing operating model, and financing to achieve long-term sustaining value.

Leveraged on our global tax network, RSM can guide you through the M&A environment in a congruent manner. Having built close collaboration and synergies in other parts of our transactional services, and with external advisors in the field of M&A deals, we are able to offer pragmatic M&A tax and transaction solutions for you to cut through the complexity and achieve your ultimate goals without worry.

Tax due diligence 

Evaluating potential tax consequences of transactions related to acquisition of shares or business or assets has never been more important.  In the context of an acquisition, it is essential for potential buyers to identify the historical tax risks of a target, assess tax opportunities, understand the impact of risks and opportunities in the foreseeable future. Significant unrecorded tax liabilities and exposures might exist or arise from past practices adopted by the Target. In an equity deal, the Company will inherit not only the current tax liabilities but the tax history of the Target – therefore, it is critical to understand the tax history and potential additional tax liabilities. Moreover, having the right representations and warranties in the sale and purchase related documents is vital for a buyer to safeguard against potential risks even when the transaction is considered completed.     

At RSM, our team of tax due diligence professionals are ready to work together and represent you as one team in a full process of tax due diligence of a target company or business partner to create joint venture with, either onshore or offshore. 

Our team members specialising in tax due diligence and transactional advisory are committed to work together and adhere to our principle and methodology of due diligence project management: 

• Efficient planning and coordination of deliverables.
• Identifying the issues early and communicating them to the company will better ensure timely program delivery.
• Coordinating with the other advisors (legal or financial) to ensure a smooth deliverance. 

You can place your trust in us as we help you identify the tax risks of a target, in both retrospective and prospective terms.  Not just dwelling at the surface, we assess the risks and inform you on the likelihood of occurrence so you may base on the analysis derive the best decision to approach and negotiate a deal.   

In a standard tax due diligence process, we typically look at a target’s tax affairs for the three most recent open tax years focusing on:

• The status of tax filing, payment and reporting of tax returns to the tax authorities.
• Identifying the potential tax exposures on:
• Corporate Income tax
• Employee income tax
• Withholding tax on expenses
• VAT (including self-assessed VAT)
• Land and Building tax, and/or other regional taxes if any.
• Determining of any areas of disagreement / dispute with relevant authorities having stake in company’s tax affairs

We also undertake necessary discussion and Q&A with the management to understand the Target’s business activities and tax affairs.  Through the process and reviewing of the data, we are also able to comment on any unusual transactions which may create future tax liabilities. 

Tax (re)structuring

Whenever it comes to merger and acquisition deal, tax structuring is critical and fundamental for both buy-side and sell-side. Value creation and protection is vital in a time of change, be it merger, acquisition, disposal, IPO or other refinancing. 

At RSM, our team of M&A tax professionals possess extensive experience having been involved in diversified and large M&A deals. We will work side by side with you to understand the underlying transaction and your objectives and develop the most efficient structure in terms of acquisition, ongoing operating model, and financing to achieve long-term sustaining value. 

Leveraged on our global tax professional network, RSM can guide you through the M&A environment in a congruent manner.  Having built close collaboration in other parts of our transactional services, and with external advisors in the field of M&A deals, we are able to offer pragmatic M&A tax and transaction solution for you to cut through the complexity and achieve your ultimate goals without worry.

Buy-side support

We can help potential buyer to map out a tax efficient structure, for acquisition and ongoing:

• Find tax efficient (and operationally & legally feasible) acquisition structure with the aim of:
• Mitigating transactional taxes
• Achieving ongoing tax efficiency (lower effective tax rate)
• Tax efficient profit repatriation
• Tax efficient carve-out
• Tax efficient future exit
• Considering seller’s tax situation and objection –seller’s tax consideration should be respected to an extent that it helps to achieve deal acceptance and harmonisation

Sell-side support

We can develop and evaluate a tax efficient deal primarily focusing on:

• Pre-closing restructuring / carve-out planning
• Minimising transactional taxes
• Minimising taxation on repatriation of sales proceeds
• Anticipating buyer’s tax structuring needs

In today's era of tax transparency, robust tax compliance is no longer a choice, but a necessity. With international agreements such as Automatic Exchange of Financial Account Information (AEoI) and Common Reporting Standard (CRS), financial information of individuals and companies can be easily accessed by tax authorities. Therefore, companies or individual must ensure they comply with all applicable tax regulations.

Robust tax compliance is crucial not only to avoid penalties and sanctions but also to maintain reputation and stakeholder trust. Companies with a good reputation in tax compliance will be more trusted by investors, customers, and business partners. On the other hand, companies that fail to comply with tax regulations can suffer significant financial and reputational losses.

To achieve robust tax compliance, companies must have effective systems and processes in place to manage tax. This includes having skilled tax teams, using advanced tax technology, and conducting regular tax audits. By doing so, companies can ensure they comply with all applicable tax regulations and avoid unintended tax risks.

We aim to deliver advice and solutions that are sensitive to the client situation and future, innovative, creative, and yet, robust to withstand revenue authorities´ scrutiny and challenge.  For any proposed course of action, we explain in detail the value it will deliver, its practical implications, and the likelihood of success.

Our services in this area include:

• Preparation and filing of monthly and annual tax returns for corporate tax, withholding tax, employee income tax, and value added tax
• Review of clients´ compliance to assess tax exposures
• Preparing and filing company income tax returns and tax computations for clients such as specialised industries including fund managers, trusts, investment companies, real estate, construction, shipping, manufacturing and trading companies
• Assisting clients with withholding tax compliance
• Working closely with the company in responding to queries raised by the tax Office
• Applying for local tax incentives and advance tax rulings

Rapid globalisation has led to an increasingly dynamic business environment which resulted in significantly more complex business transactions. Tax authorities from various jurisdictions have been actively collaborating to ensure equitable assignment of taxable profit for cross-borders transactions. In such a backdrop where change is the only constant, it is vital that companies engage in comprehensive tax planning to optimize tax savings and mitigate risk. 

Our Corporate tax team is committed to assist businesses in fulfilling their tax compliance obligations, while identifying company tax risks and tax planning opportunities that may arise. With a working culture centred on providing “speedy, personalised and pro-active” services to our clients, we are also committed to deliver quality tax compliance and advisory services to our clients and adding value to businesses.

Our team has extensive experience in tax dispute resolution procedures at every stage in Indonesia. All our tax professional in dispute resolution are equipped with relevant licenses to represent the client in every stage of disputes.  

Whether your tax issues involve income taxes, transfer pricing, indirect taxes or other taxes, our team can help. RSM has assisted several clients in tax disputes resolution at tax audit, objection, appeal, and civil review applications. 

We assist companies, professionals and high net worth individuals to protect against, prepare for, and respond to challenges by the various tax authorities.

We are experienced in stages of the tax dispute – from pre-transaction analysis and documentation to tax litigation in the court. We work with you to help lessen the likelihood of a challenge or audit before a dispute arises and to resolve matters that ultimately become the subject of a dispute.

Our approach is designed to cut through the complexity of dealing with tax disputes through effective strategies for their mitigation and management including resolution via the litigation process.

To navigate your tax disputes – our team uses also AI to mapping the complex and asymmetric tax decision made by each of stage disputes. This AI can help our client before deciding to proceed with proper options of dispute: 

• Identify the same cases for earlier fiscal years and their output
• Understand the likelihood of the cases based on available cases decided at each stage by the court

Based on the above output – we can assist client to formulate the strategies to secure the disputes.  

Our assistance to the tax dispute resolution includes:

• Tax audit assistance
• Tax objection assistance
• Tax appeal assistance
• Tax civil review assistance – both application or to respond to the authority’s application
• Transfer pricing tax dispute assistance
• Other tax dispute assistance – including preparing responses to tax office queries.

Globally, transfer pricing has captured the attention of tax authorities who are keen to ensure their fair share of global tax revenues. In the last decade, transfer pricing has evolved into one of the most challenging tax issues faced by tax professionals. With its potential to have a significant impact on the effective tax rate, organizations must pay close attention to their transfer pricing policies, documentation, and reporting. With the onset of domestic transfer pricing, these issues are not limited to multinational enterprises alone, but impact businesses in the domestic space as well. The developments on the policy front, including the prescription of harmonised tax law regulations has the potential to impact the transfer pricing policy of the businesses.

Our team assists Indonesian and Multi-National Corporations develop and implement economically justifiable transfer pricing policies and documentation. Our team have significant experience in transfer pricing matters and have worked on developing and implementing solutions for clients in several sectors related to complex transfer pricing issues. We help businesses in developing and implementing effective transfer pricing strategy and policies as well as in preparation of transfer pricing documentation (including for meeting CbCR requirements). We also have extensive experience in transfer pricing dispute management and in assisting clients with Advance Pricing Agreements (APA), both unilateral and bilateral.

Our transfer pricing services include:

• Transfer Pricing Documentation – we assist businesses to design and implement a suitable compliance policy with an appropriate level of documentation.
• Transfer Pricing Planning & Supply Chain Structuring – we help in developing and implementing economically viable Transfer Pricing policies including policy support for business restructuring and price setting.
• Litigation Support / Transfer Pricing Controversy Management – we help clients develop strategies and appropriate documentation to support and manage the tax audit/appeal proceedings.
• Advance Pricing Arrangements – we can assist preparing a robust Transfer Pricing policy aligning with business and commercial substance along with deciding on various documents and information that need to be shared with tax authorities during negotiating and implementation of an APA program.