Minister of Industrial Affairs Enforces Mandatory SNI on Glazed Ceramic Tableware
Minister of Industrial Affairs Enforces Mandatory SNI on Glazed Ceramic Tableware
On March 27, 2025, the Minister of Industrial Affairs issued Regulation No. 14 of 2025 on the Enforcement of Mandatory Indonesian National Standard (“SNI”) on Glazed Ceramic Tableware (the “Regulation”). This Regulation replaces the Minister of Industrial Affairs Regulation No. 48 of 2018 on the Enforcement of SNI on Ceramic Tableware. The Regulation was enacted on April 25, 2025 and will come into force 6 (six) months following its enactment.
We set out below the key highlights of the Regulation.
♦ Mandatory SNI and its Scope
The Regulation mandates the application of SNI 7275:2022 on Glazed Ceramic – Tableware for all glazed ceramic tableware on a mandatory basis. Specifically, the Regulation applies to glazed ceramic tableware falling under Harmonized System codes (the “HS Code”) ex. 6911.10.00 and ex. 6912.00.00. For clarity, glazed ceramic tableware refers to dishes and utensils used for serving and eating meals at the table (i.e., plates and drinking cups) that are specifically made out of glazed ceramic. The Regulation further affirms that the enforcement of SNI 7275:2022 shall apply to both locally made and imported glazed ceramic tableware.
♦ Procedures for Acquiring SNI
The following is a brief overview of the procedures for acquiring SNI 7275:2022:
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- Submission of Applications
The submission is carried out electronically through the Ministry of Industrial Affairs’ online system called the National Industrial Information System (in Indonesian, Sistem Informasi Industri Nasional or “SIINas”). Through SIINas, applicants must submit the necessary information and supporting documents that are relevant for acquiring the SNI 7275:2022 certification.
- Submission of Applications
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- Conformity Assessments
A conformity assessment consists of (i) an audit of the production process and quality management system, and (ii) quality testing in accordance with the provisions of the SNI 7275:2022 certification. The audit and quality testing of the glazed ceramic tableware shall be performed by a Product Certification Agency and a testing lab.
- Conformity Assessments
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- Affixation of SNI Mark
Once the glazed ceramic tableware is confirmed to meet the applicable requirements, the SNI Mark and an electronic label shall be affixed to the product, subject to prior approval from the relevant officials of the Ministry of Industrial Affairs.
- Affixation of SNI Mark
♦ Applicant Requirements
In order to obtain the certification under SNI 7275:2022, an applicant must own a brand for the glazed ceramic tableware and possess the appropriate business licensing in the industrial sector, specifically within the scope of the KBLI number 23931 (Porcelain Household Goods Industry), and/or the KBLI number 23932 (Clay/Ceramic Household Goods Industry). For foreign applicants, they are similarly required to have their own brand for the glazed ceramic tableware and operate their business in the glazed ceramic tableware sector. This may be evidenced by the relevant business license(s) issued in their home country or by a statement letter from the relevant authorities in the country of the applicant.
However, since the application for the SNI 7275:2022 certification is submitted through SIINas which is only accessible to the Indonesian citizens, foreign applicants are required to appoint a representative in Indonesia (a “Local Representative”). The Local Representative will submit the application on their behalf using the Local Representative’s SIINas account.
AKSET
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Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Ministry of Immigration and Corrections: New Regulation Strengthens Immigration Oversight
On February 7, 2025, the Minister of Immigration and Corrections issued Regulation No. 2 of 2025 on Immigration Oversight and Administrative Immigration Actions (the “Regulation”). The Regulation takes effect as of March 7, 2025 and replaces the Minister of Law and Human Right No. 4 of 2017 on Immigration Oversight Procedures (the “Previous Regulation”).
The Regulation introduces major improvements in immigration oversight and administrative actions. It is designed to address modern challenges by integrating technological advancements, enhancing institutional collaboration, and reinforcing national sovereignty and public security.
We set out below key highlights of the Regulation.
♦ Definition and Key Terms
The Regulation refines key definitions and expands the scope of operational procedures in immigration management. While the Previous Regulation provided concise definitions primarily focused on the movement of people and basic oversight procedures, the Regulation introduces more detailed descriptions of Indonesian travel documents (Dokumen Perjalanan Republik Indonesia or the “DPRI”), visas, residence permits, and the roles of guarantors. These expanded definitions provide a clearer framework for managing immigration functions while maintaining the fundamental concepts established under the Previous Regulation.
♦ Immigration Oversight Procedures
Unlike the Previous Regulation which provided general guidelines for administrative and field oversight, the Regulation establishes clearer and more detailed procedures. A key addition is the introduction of supporting tools for administrative oversight as specified in Article 4(3) of the Regulation. These include devices for biometric identification, passenger and crew profile information, digital forensics, data analysis, and other tools that enhance the effectiveness of immigration supervision.
♦ Oversight Procedures for Indonesians and Foreign Citizens
The Regulation provides distinctions in the oversight procedures for both Indonesians and foreign citizens. It establishes more structured and accountable processes compared to the Previous Regulation.
For Indonesians, oversight is divided into administrative and field measures. On the administrative side, authorities now follow specific procedures for collecting and verifying data related to the DPRI applications, travel records, the list of individuals subject to travel bans, as well as the collection of photographs and fingerprints. On the other hand, field oversight is conducted when a citizen applies for or uses a DPRI, registers as a dual citizen, crosses Indonesian borders, or acts as a guarantor for foreign nationals.
For the administrative oversight of foreign citizens, it may be carried out by collecting information and data regarding foreign citizens that use immigration services, being or in the process of detention, in the process of criminal procedures, on the list of travel bans, and collection of photographs, and fingerprints. Further, the Regulation stipulates that field oversight is implemented upon the occurrence of specific triggers, including:
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- the submission of a visa application;
- entry into or exit from Indonesian territory;
- the granting of a residence permit; and
- the individual’s presence and engagement in activities while in Indonesia.
Field inspections also include thorough checks of identity and documents, monitoring of activities, and verifying that foreign nationals are doing what they said they would do in Indonesia. Importantly, immigration officials now have clear authority to conduct covert surveillance, enter premises by force if necessary, and use physical restraint to manage security risks.
♦ Establishment of Supervision Team
The Regulation introduces the Foreigners Supervision Team (Tim Pengawasan Orang Asing or the “Team Pora”) as a dedicated supervisory task force. The Team Pora is established at the central, provincial, regency/city, and district levels and comprises representatives from various government agencies including law enforcement, intelligence, public health, and manpower. Its main duties are to ensure unified and coordinated oversight of immigration activities, both through administrative procedures and field operations. This represents a significant improvement in the Government's ability to monitor and respond to immigration issues, a key feature that was not addressed under the Previous Regulation.
♦ Administrative Immigration Actions
The Regulation updates the framework for imposing administrative immigration sanctions. Under its provisions, the applicable sanctions include: (i) placement on prevention or denial lists; (ii) the restriction, modification, or cancellation of stay permits; (iii) a prohibition on remaining in one or more designated areas within Indonesia; (iv) a requirement to reside in a specified location; (v) the imposition of administrative fees; and/or (vi) deportation from Indonesia.
Before any administrative action may be taken against a foreign citizen, the Regulation requires the fulfillment of three conditions. First, the available evidence must be deemed insufficient (meaning there is less than two types of sufficient evidence). Second, there must be reasonable suspicion that the individual intends to remain in Indonesia and may seek to exploit judicial remedies, particularly in cases involving fugitives or individuals fleeing instability in their home country. Third, broader considerations (including political, economic, social, cultural, and security factors) must indicate that an administrative approach would be more effective than pursuing standard criminal prosecution.
In addition, if multiple sanctions are imposed, each must be authorized through a separate administrative decision to ensure detailed and documented accountability. The Regulation also introduces a structured appeals process by granting foreign citizens with a 21-day period to challenge any administrative decision.
AKSET
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Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Utilization of Embedded Subscriber Identity Module (e-SIM)
On April 11, 2025, the Minister of Communication and Digital issued Regulation No. 7 of 2025 on the Utilization of Embedded Subscriber Identity Module (“e-SIM”) Technology in Telecommunication Implementation (the “Regulation”).
The Regulation responds to technological innovation and the increasing ease of e-SIM utilization by telecommunications services subscribers, whether via mobile or satellite networks provided by telecommunication providers. The Regulation also aims at supporting the expansion of machine-to-machine (M2M) communication systems and Internet of Things (IoT). We set out below the key highlights of the Regulation relating to the utilization of e-SIM.
- Key Obligations for Telecommunication Providers in relation to e-SIM UtilizationThe implementation of the e-SIM technology may only be carried out by telecommunications providers classified as Mobile Cellular Network Operators and Satellite Mobile Network Operators (collectively, the “Providers”). The Providers are required to fulfill several key obligations as follows:
- System Provisioning: Providers must establish and operate systems that support the use of local International Mobile Subscriber Identity Numbers (the “IMSI Numbers”) and manage subscriptions involving local Mobile Subscriber Integrated Services Digital Network Numbers and the IMSI Numbers. In relation to the provision and operation of system provisioning, the Providers may cooperate with third parties that meet the requirements set forth in the Regulation.
- Customer Registration: The Providers are required to carry out customer registration in accordance with applicable laws and regulations.
- e-SIM Profile Storage and Protection: e-SIM profiles must be secure and protected within the provisioning system. The Providers must implement and comply with standard operating procedures aligned with data protection and privacy regulations.
- Data Security Certification: The Providers must meet the certification requirements under the approved data security accreditation scheme for their provision systems.
- Monitoring and Evaluation of e-SIM Utilization
The Government has enacted regulatory measures to monitor and evaluate such utilization of the implementation of e-SIM. This oversight shall be conducted based on report by the Providers, public complaints and/or on-site inspections. Failure by the Providers to fulfill obligations under this Regulation may result in administrative sanctions, including a written warning and/or public disclosure of the violation. - Transitional Provisions Upon Enactment of Regulation
The Providers and any other parties that implemented e-SIM utilization prior to the Regulation are granted a two-year transitional period to achieve full compliance with its provisions.
AKSET
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Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Utilization of Embedded Subscriber Identity Module (e-SIM)
National Standardization Agency Allows Institution-Drafted Conformity Assessment Schemes, Eases SNI Certification for UMK
On March 14, 2025, the National Standardization Agency (Badan Standardisasi Nasional or “BSN”) issued the Head of the BSN Circular Letter No. 1/SE/KA.BSN/3/2025 of 2025 on the Implementation of BSN Regulation No. 9 of 2023 on the Procedures for the Preparation of Conformity Assessment Schemes to Indonesian National Standards (the “Circular Letter”).
The Circular Letter was issued in support of the Government’s initiative to promote micro and small enterprises (Usaha Mikro dan Kecil or “UMK”) as a vital part of Indonesia’s economy. It provides greater autonomy to the Conformity Assessment Institutions (Lembaga Penilaian Kesesuaian or an “LPK”) in arranging conformity assessment schemes, especially for UMK that possesses a Business Identification Number (Nomor Induk Berusaha or the “NIB”).
We set out below the key highlights of the Circular Letter.
♦ Institution-drafted Conformity Assessment Schemes for Voluntary SNI Products
Article 42(1) of Government Regulation No. 34 of 2018 dated July 20, 2018 on the Standardization and National Conformity Assessment Systems (the “Government Regulation”) states that conformity assessment schemes are to be arranged by BSN. However, with the issuance of the Circular Letter, LPKs are now permitted to develop conformity assessment schemes for Voluntary SNI products that do not yet have schemes established by the BSN. This must be done in accordance with BSN Regulation No. 9 of 2023 dated September 19, 2023 on the Procedures for the Preparation of Conformity Assessment Scheme to Indonesian National Standards (the “BSN Regulation”).
♦ SNI Certification Convenience for UMKs
The Circular Letter provides convenience for UMKs by allowing the initial certification process to be conducted online. It further stipulates that surveillance and recertification must be carried out through online methods. However, the Circular Letter does not elaborate on the specific procedures or platforms to be used for these online processes.
♦ SNI Certification Relief for UMKs
The BSN Regulation provides relief for UMKs seeking to acquire the SNI Certification by requiring the LPKs to (i) reduce the number of personnel involved in the conformity assessment process, (ii) shorten the time required for conducting the conformity assessment, and (iii) reduce the number of sample goods to be tested (where applicable), all with the aim of lowering the overall cost of the conformity assessment. However, the BSN Regulation does not provide further details on how these cost reductions should be implemented, which may result in inconsistent application across different LPKs.
The Circular Letter aims at providing the clarity by specifying the exact number of personnel and time involved in conducting conformity assessments for UMKs. The provisions are as follows:
- for UMKs with a maximum of 20 (twenty) employees, the conformity assessment must be conducted by 1 (one) personnel within 1 (one) day;
- for UMKs with more than 20 (twenty) employees, the conformity assessment may be conducted under one of the following arrangements:
- 1 (one) personnel within 1 (one) day;
- 1 (one) personnel within 2 (two) days; or
- 2 (two) personnel within 1 (one day).
Regarding the reduction of sample goods to be tested, the LPKs must request initial test results that align with the relevant SNI Certification as part of the certification application process. These results must have been issued no more than 1 (one) year prior to the certification application.
For food and beverage products, test results previously used by UMKs to obtain a distribution permit from the Food and Drug Supervisory Agency may be accepted as evidence of compliance with SNI Certification requirements, provided the results cover the same parameters required under the applicable SNI standards.
If a UMK does not possess any of the aforementioned test results, then the LPK may collect an unspecified number of product samples for testing purposes. Additionally, sampling and testing are not required during surveillance or recertification processes, provided there have been no changes to the raw materials, production processes, or product specifications.
Please note that the benefits provided under the Circular Letter are limited to the UMKs that hold an NIB.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Giorgio Alexander William Robot (grobot@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Issues New Regulation on Children Protection in Electronic Systems
On March 28, 2025, President Prabowo Subianto announced the enactment of Government Regulation on Governance of Children Protection in Implementation of Electronic Systems (the “Regulation”). Unfortunately, as of the date of this Newsflash, the Regulation is not publicly available. We prepared this Newsflash based on the latest official draft of the Regulation (the “Draft GR”) that may be accessed through the website of the Ministry of Communication and Digital (the “MOCD”) as follows: Draft GR.
Based on the Draft GR, the Regulation is issued to fulfill the requirements of Articles 16A(5) and 16B(3) of Law No. 11 of 2008 on Electronic Information and Transactions as amended by Law No. 19 of 2016 as amended by Law No. 1 of 2024 dated January 2, 2024 on the Second Amendment to Law No. 11 of 2008 (collectively, the “EIT Law”). Articles 16A and 16B of the EIT Law essentially stipulate that an Electronic System Organizer (an “ESO”) must provide protection for children who use or access the electronic system. Any failure to do so may result in the ESO to be subject to administrative sanctions.
Please see below the key provisions of the Draft GR.
♦ Children Age Limit
Article 1 Number 1 of the Draft GR defines a Child as someone who is under 18 (eighteen) years old. Despite various laws and regulations that set different age limits for children, the Draft GR explicitly categorizes those who are under 18 (eighteen) years old as children.
♦ Applicability to ESOs
Similar to the provisions of the EIT Law as mentioned above, Article 2(1) of the Draft GR stipulates that ESOs must provide protection for children who use or access the electronic system. In this regard, Article 2(3) of the Draft GR specifies that the ESOs that are subject to the foregoing requirements are ESOs that develop and/or provide online products, services, or features specifically intended to be used or accessed, or that may be used or accessed by children (collectively, the “Product”), whether monetized or not.
In determining the Product that may be used or accessed by children, Article 2(5) of the Draft GR provides the following indicators:
- the terms, conditions, rules, or policies published or drafted in an internal document of the ESOs indicate that Product is intended to be used or accessed by children;
- there is strong evidence that the composition of users who regularly access Product consists of children;
- advertisements related to the Product are aimed at children;
- the design elements of the Product are created or displayed in such a way that they are appealing to children; or
- the Product is substantially similar to or the same as the other Product which composition of users who regularly access it are children.
Notwithstanding the above, Article 2(7) of the Draft GR stipulates that criteria of the ESOs that will be subject to the requirement to provide children protection as mentioned above will be further regulated by the regulation of the MOCD.
♦ Obligations of ESOs
The Draft GR governs certain obligations the ESOs, among others:
- consider the best interests of the children in developing and/or operating the Product;
- prioritize the fulfillment of the children’s rights and the protection of the children over the commercial interests of the ESOs;
- provide information regarding the minimum age limit for children who may use the Product;
- ensure that the Product it develops and/or operates is appropriate for the age of the children who use or access, or who may use or access the Product, while also considering the needs of children that are adjusted to their stages of growth and age range, including children with special needs;
- provide function options that are appropriate to the capacity and age of children who may access the Product; and
- provide tools, services, or features needed by the children that may be easily accessed by the children or by their parents or guardians, to help exercise their rights or to submit reports or complaints regarding issues experienced by the children in relation to the Product.
♦ Personal Data Protection Provisions
In reference to Law No. 27 of 2022 dated October 17, 2022 on Personal Data Protection, the Draft GR also stipulates certain provisions in relation to the personal data protection of the children. This includes the obligation of the ESOs to prepare a Personal Data Protection Impact Assessment for each Product that is accessed or may be accessed by children before such Product is used by the children, at the latest 3 (three) months before the Product may be accessed by the children. The assessment shall also be reviewed and updated at least every 2 (two) years, or whenever the Product is materially updated or modified.
The Draft GR also provides certain other obligations related to personal data protection and data privacy, including:
- protect the privacy and personal data of the children who use or access the Product in accordance with the applicable laws and regulations;
- secure the electronic system and prevent unauthorized disclosure or breaches of security of the personal data;
- process the data collected solely for the purpose of data verification or for providing the age assurance and not for any other purposes, with such data being deleted once the age determination has been fulfilled;
- configure all settings of the Product that are specifically used or accessed by children, or that may be used or accessed by children, to a high level of privacy; and
- appoint an officer or staff to carry out the function of protecting the personal data of children as referred to in the applicable laws and regulations (i.e., a data protection officer).
♦ Sanctions
Violations of certain provisions of the Draft GR may subject the ESOs to administrative sanctions in the form of (i) written warnings, (ii) administrative fines, (iii) temporary suspension, and/or (iv) termination of access. The foregoing administrative sanction is imposed by the MOCD in accordance with the type of violation and the impact of the violation on the children but does not eliminate criminal and/or civil liability.
♦ Transitional Period
Article 41 of the Draft GR stipulates that the ESOs and other parties related to the provision of the Product must comply with the child protection governance provisions based on the Regulation no later than 2 (two) years from the date of promulgation of the Regulation.
Notwithstanding the provisions of the Draft GR, we note that Article 40 of the Draft GR provides that further provisions regarding child protection governance in the provision of the Product will be regulated by the regulation of the MOCD. We will continue to monitor the situation closely and provide timely updates and guidance as new information becomes available.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or M. Fatih Satria Kasmaliputra (mkasmaliputra@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Regulatory Update: Minister of Law Issues New Regulation on Verification and Supervision of Corporate Beneficial Ownership
As part of the Indonesian government’s efforts to prevent money laundering and terrorism financing (TPPU/TPPT) and to optimize the accuracy of beneficial ownership data, on 4 February 2025, the Minister of Law issued Minister of Law Regulation No. 2 of 2025 on Verification and Supervision of Corporate Beneficial Ownership (“MOL Reg. 2/2025”). This new regulation revokes the previous Minister of Law and Human Rights Regulation No. 21 of 2019 on Procedures for the Supervision of The Know-Your Beneficial Owner Principle in Corporations.
MOL Reg. 2/2025 is also issued to accommodate several challenges, including the need for a centralized beneficial ownership database, the absence of verification requirements for individual limited liability companies, and the low compliance rate in beneficial ownership reporting.
Below are the key changes introduced under MOL Reg. 2/2025.
♦ Expansion of Corporate Entities Subject to Regulation
MOL Reg. 2/2025 broadens the scope of entities required to report beneficial ownership information. This new regulation now includes civil partnerships and provides further clarification on limited liability companies (Perseroan Terbatas or PT) by categorizing them into capital partnership companies (perseroan persekutuan modal) and individual companies (perseroan perorangan).
♦ Verification of Beneficial Ownership
MOL Reg. No. 2/2025 introduces a risk-based verification process. This verification is conducted to assess risks related to money laundering and terrorism financing and must be performed by corporations, notaries, the Minister of Law, and other relevant authorities. The verification process involves assessing the accuracy of beneficial ownership information against supporting documents. The electronic system will subsequently calculate the consistency and accuracy of the submitted data in comparison with the information provided in the beneficial ownership questionnaire completed by the company.
♦ Administrative Sanctions
While the previous regulation did not specifically prescribe sanctions for non-compliance, under Chapter VII of MOL Reg. 2/2025, a structured system of administrative sanctions has been established. These sanctions may be imposed if a corporation fails to report its beneficial ownership information to the Ministry of Law or if the information submitted is found to be inaccurate. The regulation specifies the types of sanctions and the procedures for their imposition, which include:
- Warning letters;
- Blacklisting; and
- Blocking access to the General Law Administration (Administrasi Hukum Umum or AHU) Online system.
This regulatory update reflects the government’s commitment to enhancing transparency in corporate ownership and aligning Indonesia’s legal framework with international best practices in preventing financial crimes.
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com) or Natasya C. Ferdev (nferdev@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Amendments to 10% PI Framework and Expanding BUMD Participation in Upstream Oil & Gas Business
In 2016, the Minister of Energy and Mineral Resources (the “Minister”) issued Regulation No. 37 of 2016 dated November 25, 2016 on Provisions on Offers of 10% Participating Interests in Oil-and-Gas Working Areas (“Regulation 37/2016”). Regulation 37/2016 established the mechanism for offering the 10% participating interests in cooperation contracts in the upstream oil and gas business (the “Participating Interests”) to region-owned enterprises (Badan Usaha Milik Daerah – a “BUMD”) and outlined the requirements for receiving, managing, and transferring the Participating Interests.
In order to enhance effectiveness and clarity for both regional and national interests, the Minister issued Regulation No. 1 of 2025 dated January 2, 2025 but effective from January 6, 2025 (“Regulation 1/2025”) which revises and supplements certain provisions of Regulation 37/2016. Below is an overview of the key changes introduced in Regulation1/2025.
♦ New Definition of Subsidiary of Region-Owned Entity
Regulation 1/2025 includes the definition of an “Anak Perusahaan BUMD” or a “BUMD Subsidiary.” Article 1(7) of Regulation 37/2016 now defines a BUMD Subsidiary as a company of which shares are partially or entirely owned by a Region-Owned Enterprise established by a regional government, which administrative area includes a field for which the first field development plan has been approved and existing fields in the extended Working Area or the management transfer Working Area with its share participation based on reservoir extension.
♦ Clarification on Eligibility of BUMDs
The eligibility criteria for a BUMD to receive an offer of the Participating Interests have been refined. Article 3 of Regulation 37/2016 now specifies that a BUMD that may be offered the Participating Interests includes a BUMD that is wholly owned by a region and which BUMD’s ownership is not divided into shares.
♦ Composition of Shareholding of BUMD Clarified
Regulation 1/2025 now clarifies that the distribution of the regional shareholding participation must align with the percentage of reservoir coverage in the respective regions and shall considering social and economic factors.
♦ Determination of Reservoir Extension Clarified
Regulation 1/2025 provides more details in the determination of a reservoir extension beyond a region. Such determination is now made after data access, based on certification from an independent institution appointed by the relevant governor and regent/mayor.
♦ Revised Procedures of Offers of Participating Interests
Article 7(2) of Regulation 37/2016 now states that a BUMD Subsidiary appointed by a governor may manage the Participating Interests of the BUMD appointed by the governor already manages the Participating Interests in another oil & gas block. Such BUMD Subsidiary must be 100% owned by the BUMD recipient of the Participating Interests.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Rayhan Andana Harits (rharits@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Procedures for the Registration, Reporting, and Data Collection of Land and Building Tax Object
On October 18, 2024, the Minister of Finance (the “MOF”) issued Regulation No. 81 of 2024 on Tax Provisions for the Implementation of the Core Tax Administration System (the “Regulation”). The Regulation is an omnibus regulation that consolidates and updates various tax rules to enhance the new Core Tax Administration System. Its objective is to modernize tax administration by ensuring transparency, efficiency, and accountability through advanced IT systems, improved business processes, and comprehensive databases.
This Newsflash discusses provisions relating to the procedures for the registration, reporting, and data collection of the land and building tax object (the “Tax Object”).
Provisions on the Tax Object were previously regulated under MOF Regulation No. 48/PMK.03/2021 on Procedures for the Registration, Reporting, and Data Collection of Land and Building Tax Object (the “Previous Regulation”). The Previous Regulation is revoked and replaced by the Regulation.
We set out the key points under the Regulation relating to the procedures for the registration, reporting, and data collection of the Tax Object.
♦ Registration of Tax Object
Article 71(1) of the Regulation stipulates that every taxpayer is obliged to register their Tax Object to the relevant Directorate General of Tax (“DGT”) no later than 1 (one) month following the fulfillment of subjective requirements. Such subjective requirements are differentiated based on several sectors of the Tax Object.
The following table outlines the milestone of the fulfillment of such subjective requirements:
Taxpayers shall register their Tax Object by way of:
- electronic submission through Taxpayer’s Portal, other websites or application integrated with DGT’s administration, and/or contact center; or
- direct submission or via mail courier services to the Tax Office, Tax Service, Counseling and Consultation Office, or other places determined by the DGT.
Upon receiving the application, the Head of the relevant Tax Office shall conduct administrative review of the submission. If the submission is accepted, the Head of Tax Office shall issue a Certificate of Registration for the Tax Object (Surat Keterangan Terdaftar Objek Pajak Pajak Bumi dan Bangunan).
In the case where a taxpayer does not register the Tax Object, then the Head of Tax Office shall carry out an administrative examination or review towards the respective Tax Object. Based on such administrative review, the Head of Tax Office, as authorized, shall then issue a Certificate of Registration for the Tax Object.
♦ Reporting Obligation by Taxpayers for the Registered Tax Object
The reporting obligation by Taxpayers for the registered Tax Object is regulated under Article 79 of the Regulation. In every tax year, taxpayers shall report their registered Tax Object (the “Report”) by using the Tax Object Notification Letter (Surat Pemberitahuan Objek Pajak) sent by the DGT. In this case, the DGT shall convey the Tax Object Notification Letter electronically on certain dates within the tax year (e.g., March 31st of the tax year for payable land and building tax, for the Tax Object in the forestry sector).
After receiving the Tax Object Notification Letter, the relevant taxpayer must submit the Report to the DGT no later than 30 (thirty) days (“Permissible Period”). If the taxpayer is unable to submit the report within such Permissible Period, the taxpayer is allowed to submit a postponement notification letter for the submission of Tax Object Notification Letter (“Postponement Letter”).
After the Report is submitted, the DGT shall conduct a formal review of the submission. The Tax Office shall then conduct a material review of the submission. If incompliances are still found, then the Tax Office shall request clarification which must be responded to by the relevant taxpayer.
Failure by taxpayer to (i) submit the Report within the Permissible Period and (ii) does not submit a Postponement Letter, the Head of Tax Office shall issue a warning letter. If the relevant taxpayer still fails to submit the report after receiving the warning letter, then the Tax Office shall prepare a risk assessment as a proposal to conduct an examination towards the registered Tax Object of the relevant taxpayer.
♦ Data Collection of the Registered Tax Object by the DGT
The Regulation also provides the authorization for the DGT to collect data on the registered Tax Objects for the purpose of conducting material research and risk assessment, as proposals for examination.
The data collection shall consist of (i) office data collection, is carried out by processing the Tax Object data provided in the Tax Object Notification Letter and/or processing the data and information within the DGT’s administration system, and/or (ii) field data collection, which is carried out by inspecting the physical location of the Tax Object and/or other locations outside the physical location of the Tax Object, based on data of the Tax Object.
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com), M. Raehan A. Fadila (mfadila@aksetlaw.com), or Justin Amadeus (jamadeus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Withholding and Payment of Income Taxes on Other Contractor's Income and/or Participating Interests
On October 14, 2024, the Minister of Finance (the “MOF”) enacted the MOF Regulation Number 81 of 2024 on Taxation Provisions for the Implementation of the Core Tax Administration System (the “Regulation”). The Regulation came into force as of January 1, 2025. The Regulation is an omnibus regulation that consolidates and updates various tax rules to enhance the new Core Tax Administration System. Its objective is to modernize tax administration by ensuring transparency, efficiency, and accountability through advanced IT systems, improved business processes, and comprehensive databases.
Due to the extensive range of provisions covered in the Regulation, this Newsflash only discusses the procedures for the withholding income taxes in respect of a contractor’s income in the upstream oil and gas business. These provisions were previously regulated under MOF Regulation Number 257/PMK.011/2011 dated December 28, 2011 on Procedures for Withholding and Payment of Income Taxes on Contractors’ Other Income in the Form of Uplifts or Other Similar Rewards and/or Contractors’ Income from Transfer of Participating Interests (the “Previous Regulation”).
♦ Withholding Tariff of Income Tax
Under the Regulation, there are no significant changes regarding the withholding of income taxes for an Oil and Gas Cooperation Contractor (the “Contractor”) on any income other than cooperation income. Specifically, for income in the form of any Uplift and/or a transfer of Participating Interests, the following tariffs apply:
- Uplift (or other similar compensation): 20% (twenty percent) of the gross amount
- Transfer of participating interests:
- 5% (five percent) of the gross amount for transfers during the Exploration Period (from the effective date of the Cooperation Contract until the approval of the first field development plan in a Contractor’s work area). The transfer is exempt from income tax if it meets the following criteria:
- not transfer all of the Participating Interests owned;
- Participating Interests are owned for more than 3 (three) years;
- in the work area, the exploration has been carried out and the Contractor has made investments to carry out the exploration; and
- the transfer of the Participating Interests by the Contractor is not intended to make a profit, and
- 7% (seven percent) of the gross amount for transfers during the Production Period (from the end of the exploration period until the end of the Cooperation Contract). This transfer is exempt from any income tax if conducted to fulfill the transfer obligations of Participating Interests to national companies as stipulated in the relevant Cooperation Contract.
- 5% (five percent) of the gross amount for transfers during the Exploration Period (from the effective date of the Cooperation Contract until the approval of the first field development plan in a Contractor’s work area). The transfer is exempt from income tax if it meets the following criteria:
♦ Taxation of Participating Interests Transfers
Under the Regulation, the basis for imposing the income tax on a transfer of the Participating Interests is:
- the amount actually received or obtained by the Contractor; or
- the amount that should have been received or obtained if there is a special relationship between the parties involved in the transfer.
Article 211 of the Regulation mandates that Contractors transferring Participating Interests must report the transfer value to the Tax Services Office where they are registered. The report must include the Participating Interest Transfer Agreement and the Financial Quarterly Report for the last quarter prior to the transfer. This report must be submitted within 14 (fourteen) business days from the signing date of the agreement. If the recipient Contractor is not registered as a Taxpayer, the reporting obligation falls on the transferring Contractor. Non-compliance with these requirements allows the Director-General of Tax to determine the transfer value ex officio.
Article 213 of the Regulation provides that the income tax becomes payable at the earlier of the following events: at the time of payment, at the time of the transfer of Participating Interests, or upon approval of the transfer by the minister overseeing energy and mineral resources. The receiving Contractor must withhold the tax and issue proof of withholding.
Under Article 213(3) of the Regulation, if the recipient Contractor is not yet registered as a taxpayer, the withholding, deposit, and reporting must occur after the recipient’s registration.
Meanwhile, if the transfer of Participating Interest is carried out indirectly and does not change the Taxpayer Identification Number (in Indonesia, Nomor Pokok Wajib Pajak), the Contractor transferring the Participating Interests is required to pay the income tax payable directly no later than the 15th (fifteenth) day of the following month after the relevant tax period.
♦ Uplift or Other Similar Compensation
Article 212 of the Regulation regulates that the income text in the form of Uplift or other similar compensation is payable at the time income in the form of Uplift or other similar compensation is paid or recognized as an expense, depending on which one occurs first. The Contractor making the Uplift payment must withhold the tax and issue proof of withholding/collection in accordance with applicable laws and regulations.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Arthur Basa Okuli Nainggolan (anainggolan@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Withholding Taxes on Insurance and Reinsurance Premia Paid to Overseas Insurance Companies
On October 18, 2024, the Minister of Finance (the “MOF”) issued Regulation No. 81 of 2024 on Tax Provisions for the Implementation of the Core Tax Administration System (the “Regulation”). The Regulation is an omnibus regulation that consolidates and updates various tax rules to enhance the new Core Tax Administration System. Its objective is to modernize the tax administration by ensuring transparency, efficiency, and accountability through advanced IT systems, improved business processes, and comprehensive databases.
This Newsflash outlines the provisions regarding the withholding taxes applicable to insurance and reinsurance premia paid to foreign insurance companies as stipulated in the Regulation. These provisions were previously regulated under MOF Decree No. 624/KMK.04/1994 dated December 27, 1994 on Withholding of Article 26 Income Tax on Income in the Form of Insurance Premia and Reinsurance Premia Paid to Overseas Insurance Companies (the “Decree”). The Decree is revoked and replaced entirely by the Regulation.
We set out below the key elements of the Regulation regarding the withholding taxes on insurance and reinsurance premia paid to overseas insurers.
♦ Consistent Tax Rate and Income Estimation
One of the primary features retained in the Regulation is the 20% withholding tax rate applied to the estimated net income from insurance and reinsurance premia paid to overseas insurance companies. This consistency ensures that businesses familiar with the Decree may continue their compliance efforts without needing to adjust to a new tax rate.
The method for calculating the estimated net income remains unchanged. Specifically, the Regulation stipulates that the “estimated net income”, which serves as the basis for withholding taxes shall be calculated as follows: (i) 50% of the premium paid by the insured to an overseas insurance company, (ii) 10% of the premium paid by an Indonesian insurance company to an overseas insurer, and (iii) 5% of the premium paid by an Indonesian reinsurance company to an overseas insurer.
♦ Extended Tax Payment Deadline
A significant modification introduced by the Regulation is the extension of the tax payment deadline. Under the Decree, taxpayers were required to remit the withheld tax within 10 days after the end of the month in which the premium was paid. The Regulation extends this period to 15 days after the end of the month in which the premium is paid.
♦ Simplified Documentation Requirements
Another notable change in the Regulation is the documentation requirements for withholding taxes. Previously, the Decree required the issuance of three copies of the withholding tax receipt: one for the payee, one to be attached to the Monthly Income Tax Return, and one for the withholding agent’s records. Now, the Regulation simplifies this process by eliminating the specific requirement. This change reduces the administrative burden on businesses and streamlines compliance process, making it easier for companies to fulfill their tax obligations with less paperwork.
♦ Enhanced Reporting Mechanism
Another key update in the Regulation is the introduction of a more streamlined reporting process. The regulation adopts the Unified Income Tax Monthly Return Form, which replaces the previously used Income Tax Monthly Return Form (SPT Masa PPh 26) under the Decree.
This unified form integrates various reporting requirements into a single, cohesive document, enhancing efficiency and reducing the likelihood of errors in tax filings. By consolidating reporting procedures, the Regulation aims at facilitating a more integrated and centralized approach to tax administration, benefiting both taxpayers and regulatory authorities
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Rayhan Andana Harits (rharits@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.