Improve Government Tax Treaty

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Tax treaty is an agreement the two countries or more by dividing the right to impose a tax on an income that comes from a country that gained population of other countries. Government tax treaty.Upaya repair mechanisms are believed able to reduce fraud in order to increase revenues. Tax treaty is improved through the Director General of Tax Regulation No. PER-61 / PJ / 2009 and AS-62 / PJ / 2009 which came into force since January 1, 2010. "This sistem.Manfaatnya improvements can increase revenues". However, Prima refused to mention the potential increase in revenue over the implementation of the new policy.

P3B tax treaty or an agreement between two states or more by dividing the taxing rights on an income that comes from a country that gained population lain.Prima state further said, the old rules for a tax treaty is actually harming the Directorate General of Taxes and the taxpayer burden. He said the Directorate General of Taxes are often faced with various problems such as double taxation (double taxation), tax evasion (tax avoidance), and tax evasion (Tax Evasion), especially from foreigners who do business both passive and active in Indonesia.

Prima said, technically, a tax treaty is very useful, especially to examine proportional income tax from taxpayers who do business or invest and bring in revenues in a country. P3B or a tax treaty is needed because there are differences among different state taxation principle. United States, for example, using other sources of income as a criterion of tax payment. In addition, there is also the principle of residence (residence) and nationality (citizenship). He stated that if a U.S. citizen working in Indonesia, there is a possibility he's suffered double taxation. For pay-Ten Fourty (U.S. tax system) to its obligations as citizens and taxpayers as well as a source of income Indonesia from Indonesia. With this P3B change, he continued, there are rules of proportional distribution of taxes to be paid to the taxpayer Indonesia and America. In addition to improvements in the mechanisms P3B, Directorate General of Tax Administration to also update the filling of residency certificate (SKD). "Form was now more complete.

This is not retroactive, so before January 1, the old form is still valid. The types of income stipulated in the tax division of the tax treaty covers income from immovable property, business profits, international aircraft and shipping, as well as passive income, both dividends, interest, or royalties. Apart from capital gains, income-free employment, and income-related employment. This includes income as a director, artist, and sportsman, retired, students, and administration tasks. Tax treaty is not always effective in preventing attempts of tax evasion and avoidance. This is because the exchange of information between countries sometimes do not go up. Also because of lack of effectiveness of the correction necessary adjustments in the partner country transfer pricing and taxation consultancy.

Agreement with Mauritius Terminated

Meanwhile, Indonesia to stop double taxation avoidance agreement (P3B) or a tax treaty with the international Mauritius.Perjanjian discontinued since January 1, 2005. No longer valid because there's no rule that could lead to treaty abuse (abuse of the rules).

Tax treaty is also needed to remove barriers in international trade and investment, and optimize welfare because resources are efficiently allocated. Indonesia currently has with 58 countries P3B namely Australia, Bangladesh, Brunei Darussalam, India, Japan, Jordan, North Korea, South Korea, Kuwait, Malaysia, Mongolia, New Zealand, Pakistan, Philippines, Qatar, Saudi Arabia.

Then Singapore, Sri Lanka, Syria, Taiwan, Thailand, China, United Arab Emirates, Vietnam, Algeria. Then Canada, Egypt, Mexico, Seychelles, South Africa, Sudan, Tunisia, the United States, Venezuela, Austria, Belgium, Bulgaria, Czech, Danish, Finnish. In addition, France, Germany, Hungary, Italy, Luxembourg, Netherlands, Norway, Poland, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and Uzbekistan. With the improvement of this Reality Tax in Indonesia could expect more prosperous and rising standard of living people.