Dr Leopoldo Parada completes first part of tax policy mission in Indonesia

Dr Parada is working with the Indonesian Fiscal Policy Agency (BKF) and the Directorate General of Taxes.

Between 4-20 January 2023, the School of Law’s Dr Leopoldo Parada completed one part of his tax policy mission in Jakarta, Indonesia, where he is working together with the Fiscal Policy Agency (BKF) and the Directorate General of Taxes, both part of the Ministry of Finance of Indonesia, in the drafting and implementation of new tax legislation related to corporate group-debt finance. Most notably, new regulations on the deductibility of interest payments between related parties in the context of corporate groups and corporate taxation. 

The legislative process is already advanced, although the technical details of the new legislation will be finished in the first semester of 2023, including issues on exemptions, benchmarking, and the interconnection with other anti-avoidance legislation. 

There has been quite a lot of fruitful debate to find the best way to proceed with the implementation of these new rules. This is not always easy since many external factors are also involved, including political pressure. However, these two weeks of fieldwork are very promising for what the ultimate outcome will be.

Dr Leopoldo Parada secured a £7,000 grant from Policy Leeds Engagement Fund for this project: 'Implementation of Interest limitation rules and group-debt funding in Indonesia/ Fiscal Policy Agenda 2030'. The work is taking place both online and in person between October 2022 and March 2023. 

The new legislation is expected to be published in 2023.