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Controlled Foreign Corporation Determination Criteria and Tax Adjustments丨Indonesia Tax Guide 2025 (48)
Indonesia Controlled foreign companies 2025-03-22 09:08:45   Page view：265

This issue's introduction

Criteria for determining controlled foreign companies and tax adjustments



Chapter 10

Special Tax Adjustment Policy

Criteria for determining controlled foreign companies

The Ministry of Finance has the authority to assess dividends received by resident taxpayers from the following non-listed foreign companies:


(1) The taxpayer holds more than 50% of the shares of the enterprise;

(2) The taxpayer and other resident taxpayers hold more than 50% of the shares of the enterprise.


Controlled foreign corporation tax adjustment
Dividends will be deemed distributed 4 months after the deadline for filing the annual corporate income tax return of the controlled foreign corporation. If the controlled foreign corporation has no tax filing obligation or the country where it is located does not have a tax filing deadline, the dividends will be deemed distributed 7 months after the end of the tax year of the corporation.

Indonesian shareholders must declare the amount of deemed dividend distribution income in the current return for the tax year in which the dividend is deemed distributed.

The Indonesian government allows resident taxpayers to invest in offshore companies. In order to promote anti-tax avoidance management, the Indonesian Ministry of Finance has the right to determine the time and amount of dividend distribution obtained by resident enterprises when residents make overseas investments.

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