The Director General of Taxes issues guidelines for the implementation of Certificates of Domicile (Surat Keterangan Domisili/SKD) reviews for non-resident taxpayers (Wajib Pajak Luar Negeri/WPLN). These guidelines are outlined in Circular No. SE-35/PJ/2021 concerning Guidelines for the Implementation of Reviews on Certificates of Domicile of Non-Resident Taxpayers in Audits, Objections, and Reduction or Cancellation of Notices of Tax Assessment (SE-35/2021).
Prior to the issuance of this regulation, no review procedure for SKD WPLN was available in resolving SKD WPLN-related disputes. As such, this circular is intended to provide guidance and uniformity in the implementation of SKD WPLN reviews during the audits, objections, and reduction or cancellation of notices of tax assessment (Surat Ketetapan Pajak/SKP).
SE-35/2021 outlines two matters, i.e. formal review guidelines and materials pertaining to SKD WPLN during audits, objections, and reduction or cancellation of SKP.
Under this regulation, tax auditors and/or tax objection reviewers may conduct reviews on the fulfillment of formal provisions on SKD WPLN. Several formal provisions on SKD WPLN are to be taken into account throughout the review.
First, using the SKD WPLN format. Second, filled out correctly, completely, and clearly. Third, signed or given a sign equivalent to a signature by WPLN according to the prevalence in the Tax Treaty (Persetujuan Penghindaran Pajak Berganda/P3B) partner country or jurisdiction.
Fourth, ratified by a signature or given a sign equivalent to a signature by a competent authority according to the prevalence in the Tax Treaty partner country or jurisdiction. The ratification may be performed in the form of an electronic signature insofar as it is prevalent in the Tax Treaty partner country or jurisdiction.
Fifth, it is used according to the period stated in SKD WPLN. Sixth, there is a statement by WPLN that the Tax Treaty has not been abused. Seventh, there is a statement that the WPLN is the beneficial owner if so required in the Tax Treaty.
If SKD WPLN is received by the auditor in an audit or the tax objection reviewer in the objection process or the reduction or cancellation of SKP, said document may continue to be considered as the basis for the implementation of the provisions under the Tax Treaty insofar as the formal requirements are met.
In the event that SKD WPLN does not clearly state the validity period, WPLN through the tax withholder and/or collector can complete the submitted SKD WPLN. SKD WPLN is completed by providing additional explanation from the Competent Authority (CA) of the Tax Treaty partner country or jurisdiction concerning the validity period of SKD WPLN. In the absence of additional explanation, SKD WPLN is deemed not to meet the formal requirements.
The following two things are to be taken into account in the material review on SKD WPLN during audits, objections, and reduction or cancellation of SKP. First, there is no misuse of P3B. Second, the requirement as a beneficial owner is met if so required in the Tax Treaty. These two aspects are reviewed based on the Director General of Taxes Regulation stipulating the procedures for Tax Treaty implementation.
In the final section, this regulation urges that with the issuance of this circular, all work units within the Directorate General of Taxes are requested to supervise the implementation of this circular in their respective working areas. SE-35/2021 was enacted on 31 May 2021.