Analysis of Controlled Foreign Company (CFC) Rules In Indonesia To Prevent Tax Avoidance Practises

Nova Ratu Pietraya Sari, Ning Rahayu

2018

Abstract

To counter deferral tax payment as one of tax avoidance scheme, some countries have a set of rules called CFC (Controlled Foreign Company) rules. On July 26 2017, Indonesia issued the latest regulation on CFC rules which is Minister of Finance Regulation (MFR) number 107. This research aims to analyze how the newest CFC rules in Indonesia, MFR No. 107/MFR.03/2017, can be used to counteract tax avoidance practices and what are the constraints in implementing these newest CFC rules in Indonesia. This research conducted with qualitative approach. Data collection using literature research and interview. This research concluded that the latest CFC rules in Indonesia, MFR No. 107/MFR.03/2017, can be used to counteract tax avoidance practices by already improve the deemed dividend mechanism, has covered provision on indirect ownership, has covered provisions on trusts, and has covered provisions on foreign tax credit. The constraints in implementing CFC rules in Indonesia, MFR No. 107/MFR.03/2017, are the scope about CFC is too extensive so it become ineffective to implemented, complication in detecting indirect ownership and joint ownership, complication in obtaining data and information on supervisory process by Directorate General of Taxes (DGT), and the lack of awareness about CFC issue by DGT officials.

Paper Citation

in Harvard Style

Sari N. and Rahayu N. (2018). Analysis of Controlled Foreign Company (CFC) Rules In Indonesia To Prevent Tax Avoidance Practises.In Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium, ISBN 978-989-758-339-1, pages 838-846. DOI: 10.5220/0007021908380846

in Bibtex Style

@conference{jcae symposium18,
author={Nova Ratu Pietraya Sari and Ning Rahayu},
title={Analysis of Controlled Foreign Company (CFC) Rules In Indonesia To Prevent Tax Avoidance Practises},
booktitle={Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium,},
year={2018},
pages={838-846},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0007021908380846},
isbn={978-989-758-339-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the Journal of Contemporary Accounting and Economics Symposium 2018 on Special Session for Indonesian Study - Volume 1: JCAE Symposium,
TI - Analysis of Controlled Foreign Company (CFC) Rules In Indonesia To Prevent Tax Avoidance Practises
SN - 978-989-758-339-1
AU - Sari N.
AU - Rahayu N.
PY - 2018
SP - 838
EP - 846
DO - 10.5220/0007021908380846