The Taxation Of Offshore Indirect Transfer-A Toolkit Case Study

A world without boundaries driven by the rapidly growing business, has blurred the boundaries of jurisdiction between countries. With the rapid development of technology and the efforts of each country to become more open to capital inflows from other countries, it has encouraged the business world to create new schemes in running its business, where the presence of physical forms in a country becomes irrelevant. A legal entity or an individual may control and have control over an immovable asset in another country without having to be present in that country. In its development, the transfer of control over immovable assets in a country can even occur outside the territory of the location of the immovable assets. Furthermore, various immovable
One of the schemes that needs to get the attention of the Directorate General of Taxes is Indirect Transfers of Immovable Assets (Land and Building) With Nominee Usage. Where in this transaction the ownership of land and buildings is represented by the bond between Indonesian local residents and foreign citizens, furthermore this bond representing the ownership of immovable assets in the form of land and building may be traded further outside the jurisdiction of Indonesia by the foreign citizens holders of the notes to other foreign citizens or other institutions. This transaction is characterized as indirect transfers of immovable assets, although not directly regulated in the Discussion draft: The Taxation of Offshore Indirect Transfer- A Toolkit. The practice of Indirect Transfers of Immovable Assets (Land and Building) With Nominee Usage also needs to be addressed properly by the Directorate General of Taxes. Considering the magnitude of potential taxes arising from indirect transfers of immovable assets and the increasingly supportive global economic conditions of this practice, the Directorate General of Taxation needs to formulate a comprehensive policy to optimize tax revenue from this scheme and create equal treatment of asset transfers