Generally, for tax purposes, a company’s books must be maintained in accordance with the prevailing accounting standards unless the tax law stipulates otherwise. On this point it is worth notify that, as at the end of 2018, the MoF had issued a specific regulation on the accounting and tax treatment for PPPs in an effort to better support the development of infrastructure projects nationwide.

By default, the books must be maintained in Rupiah, composed in Indonesian, and stored in Indonesia. Subject to specific DGT approval, foreign-investment (Penanaman Modal Asing/PMA) companies, PEs, subsidiaries of foreign companies, taxpayers listed overseas, and taxpayers presenting their financial statements in their functional currency of USD in accordance with the Financial Accounting Standards (Standar Akuntansi Keuangan/SAK) applicable in Indonesia can maintain their books in USD and compose them in English. A collective investment contract (Kontrak Investasi Kolektif/KIK) is allowed to use USD accounting to the extent that it issues USD-denominated investment funds.

An application for DGT approval must be filed with the DGT’s office no later than three months before the beginning of the USD accounting year. The DGT is required to decide on the application within a month. If no decision is made within that time, the application is automatically approved.

Companies governed by a Production Sharing Contract (PSC) or a Contract of Work (CoW) with the government may decide to apply USD accounting in English simply by notifying the DGT in writing. This notification must be submitted to the DGT office no later than three months before the beginning of the USD accounting year.

The use of a foreign language other than English and a foreign currency other than USD in a company’s books is prohibited. Irrespective of the currency and the language used, companies typically have to settle their tax liabilities in Rupiah (except for PSC companies) and file tax returns in Indonesian. For corporate income tax, the assertions must be presented in USD side by side with Rupiah in the annual CITR.

A company that has obtained approval to maintain USD accounting may return to Rupiah accounting subject to DGT approval. Once approval is granted, the company may not reapply for USD accounting approval during the five years after the cancellation of the USD accounting.

Indonesia uses a self-assessment system under which