As of 28 October 2026, the Indonesian Tax Authority released an analytical article examining the implications of the Global Minimum Tax (GMT) under the OECD/G20 Inclusive Framework on BEPS Pillar Two. Indonesia, as a signatory, is progressing toward domestic legislation to enforce a 15% effective minimum tax on multinational enterprises (MNEs) with consolidated revenues exceeding EUR 750 million. The article discusses how GMT neutralizes the incentive for jurisdictions to engage in a “race to the bottom” by offering ultra-low tax rates to attract investment. It outlines the mechanics of the Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR), and signals Indonesia’s intent to adopt a Qualified Domestic Minimum Top-up Tax (QDMTT) to preserve primary taxing rights over low-taxed domestic income.
Key Takeaways
- 15% Floor Reshapes Incentive Structures: Tax holidays and super-deductions that previously reduced effective rates below 15% will trigger top-up taxes, diminishing their attractiveness for inbound investment planning.
- QDMTT Priority for Indonesia: By implementing a QDMTT, Indonesia ensures top-up tax revenues are collected domestically rather than by foreign parent jurisdictions under the IIR.
- Compliance Burden Intensifies for MNEs: Affected groups must prepare for complex jurisdiction-by-jurisdiction effective tax rate (ETR) calculations, requiring enhanced data granularity and transfer pricing alignment.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement