Technical Guidance for the Implementation of Mutual Agreement Procedure

This circular follows the prior issuance of Ministry of Finance (MOF) Regulation Number 49/PMK.03/2019 (PMK-49) and DGT Regulation No PER-16/PJ/2020 (PER-16) relating to MAP. 

Processes for MAP implementation

SE-49 is largely focused on the DGT’s internal processes for MAP implementation from the receipt of the initial MAP request through to MAP resolution or cancellation. The processes that SE-49 addresses include, the:

• Handling of a MAP request by the taxpayer’s tax office who has received a MAP request
• Documentation to be used internally by the DGT during the MAP process
• Establishment of a MAP Reviewer Team to review the MAP request
• Composition of the MAP Reviewer Team, its duties, and procedures that the MAP Reviewer Team should follow in implementing its duties
• Establishment of a MAP Negotiator team and its duties
• Duties of the MAP Discussion Committee

Method of communication with the Competent Authority of the Tax Treaty Partner

To provide additional clarity on how the DGT may communicate with the Competent Authority of the Tax Treaty Partner during the MAP process, SE-49 outlines that the Competent Authority of the Tax Treaty Partner may also communicate with the DGT via email or facsimile to initialize MAP discussions, negotiate a MAP, or withdraw a MAP request.  These methods of communication are in addition to the usual methods of communication by mail, in person or by courier.

Timeline for withdrawal of MAP for non-responsive Competent Authority of the Tax Treaty Partner

Where the DGT has issued a MAP implementation request to the Competent Authority of the Tax Treaty Partner and that Competent Authority has not responded within 8 months to this request, SE-49 states that the DGT will then automatically cancel its request for MAP implementation.  As such, the MAP process will be cancelled.  This situation may only arise where the MAP has been initialized by an Indonesian taxpayer with the DGT.