BCAA Indonesia - USA on CBCR

Director General of Taxes, Robert Pakpahan, as Authorized Officer (Competent Authority) Indonesia and Assistant Deputy Commissioner International, Internal Revenue Service of the United States, Theodore Setzer as US Authorized Officer, has signed the BCAA (Bilateral Competent Authority Agreement)  on CBCR  (Country by Country Report) on 13 June 2018. By signing BCAA, Indonesia and the United States can periodically exchange Country Reports as a way to reduce the risk of the Base Erosion and Profit Shifting (BEPS).

The Per-Country Report Exchange is part of BEPS Action 13, which is one of the four minimum actions that are mandatory for jurisdictions committed to implementing the BEPS Project issued by the G20 and OECD.  Pursuant to DGT website, multilaterally, Indonesia has signed the Multilateral Competent Authority Agreement (MCAA) on CbCR on January 26, 2017. Currently, the MCAA on CbCR has been signed by 69 (sixty nine) countries / jurisdictions. Meanwhile, the number of countries that already have a Qualifying Competent Authority Agreement (QCAA) for the exchange of Country Reports with Indonesia is 52 (fifty two) countries / jurisdictions. The United States alone is not a party to the signing of the MCAA on CbCR, so the exchange of Country Reports with the United States will be implemented on a bilateral basis under the BCAA on CBCR.

The signing of BCAA on CBCR between Indonesia and the United States was conducted on the sidelines of the 29th Meeting of the Peer Review Group (PRG Meeting) on 11-14 June 2018 in Vaduz, Liechtenstein.

Brief summary of BCAA Indonesia - US :

1. Each Competent Authority (CA) intends to exchange with other CA annually on an automatic basis.
2. It is intended to be first exchanged with respect to fiscal years of MNE groups commencing on or after January 1, 2016.  Such CbC Report is intended to be exchanged  as soon as possible and no later than 18 months after the last day of the fiscal year of the MNE group to which the CbC Report relates.
3. CbC Reports with respect to  fiscal year  commencing on or after January 1, 2017 are intended to be exchanged as soon as possible and no later than  15 months after the last day  of the fiscal year  of the MNE groups  to which CbC Report relates. 
4. The CAs intend to exchange the CbC Report automatically through a common scheme in Extensible Markup Language (XML).
5. Information exchanged by means of the CbC Report should be used by the tax administration for assessing high level transfer pricing risks, base erosion and profit shifting related risk, and where appropriate, for economic and statistical analysis. 
6. The information should not be used by the tax administration as a substitute for a detailed transfer pricing analysis of individual transactions and prices based on a full functional analysis and full comparability analysis.   

The full text of BCAA can be downloaded here.