Yes, probationary periods are allowed under Indonesian labor law but can only last up to three months. During this time, the employment contract must clearly state the probationary nature of the work and the expectations for successful completion.
Yes, probationary periods are allowed under Indonesian labor law but can only last up to three months. During this time, the employment contract must clearly state the probationary nature of the work and the expectations for successful completion.
Labor disputes are typically resolved through bipartite negotiations, mediation, and tripartite through Local Manpower institution. If these measures fail, disputes may be escalated to the Industrial Relations Court.
Mutual agreements between employers and employees to terminate an employment relationship must be documented in writing and signed by both parties. It is a voluntary process, and the employer typically offers compensation or severance payments in line with government regulations.
A CLA is a negotiated agreement between the employer and a registered labor union, outlining terms of employment for the union members. It covers salaries, benefits, dispute resolution mechanisms, and working conditions. CLAs must be registered with the Ministry of Manpower.
Company Regulations is internal rules established by the employer to govern the rights and obligations of both parties. They provide structure on issues such as working conditions, disciplinary actions, leave policies, and other employment terms. The regulations must align with the legal framework and be reviewed every two years. This regulation must be registered and approved by the Indonesian Ministry of Manpower.
There are two types of employment contracts: Fixed-term contracts (Perjanjian Kerja Waktu Tertentu or PKWT) and Indefinite-term contracts (Perjanjian Kerja Waktu Tidak Tertentu or PKWTT). Fixed-term contracts are used for specific time periods or projects, while indefinite-term contracts are open-ended.
Employment contracts must be in writing and should clearly outline both employer’s and employee’s rights and obligations, including job responsibilities, working hours, salary, benefits, and the duration of employment. The contract should comply with Indonesian Manpower Law No. 13 of 2003, as amended by the Job Creation Law.
When should I apply for a tax ruling?
You should consider applying for a tax ruling when you face complex or unclear tax issues that could impact your business decisions. A tax ruling can provide you with the necessary legal certainty before you proceed.
What types of tax facilities are available in Indonesia?
Indonesia offers various tax facilities, including tax holidays, reduced tax rates, and exemptions, designed to encourage investment and business activities in certain sectors or regions. These facilities can significantly reduce your tax burden.
How do I know if my business qualifies for tax facilities?
Our team conducts an eligibility assessment based on your business activities and the criteria set by the Indonesian government. We identify the most beneficial tax facilities that apply to your situation.
What documents are required for a tax ruling application?
Typically, you’ll need to provide a detailed description of the tax issue, legal arguments, and any supporting evidence. We help you prepare all the necessary documentation to ensure a strong application.
How long does it take to get a tax ruling in Indonesia?
The processing time for a tax ruling can vary depending on the complexity of the issue and the workload of the tax authorities. On average, it may take several weeks to a few months.
What happens if my application for tax facilities is approved?
Once approved, you must comply with the conditions set by the tax authorities to maintain the benefits. We provide ongoing support to ensure you meet these requirements and continue to benefit from the tax facilities.
Are tax rulings legally binding in Indonesia?
Yes, once issued, tax rulings are legally binding for both the taxpayer and the tax authorities. They provide a clear legal framework for how the relevant tax laws will be applied to your specific case.
How does the Indonesian government decide who gets tax facilities?
Tax facilities are granted based on specific criteria set by the government, which may include the type of business activity, the investment amount, the region of operation, and the expected economic impact.
What is the difference between a tax ruling and a tax opinion?
A tax ruling is an official decision from the tax authorities, whereas a tax opinion is a professional interpretation provided by a tax advisor. While a tax opinion can guide you, a tax ruling offers legal certainty from the government.
Can tax facilities be revoked once granted?
Yes, tax facilities can be revoked if the business fails to comply with the conditions set by the tax authorities. Regular compliance and reporting are essential to maintaining these benefits.
When should I consider Tax Due Diligence?
Tax Due Diligence is crucial during mergers, acquisitions, company restructuring, or when preparing for a sale. It ensures you have a clear understanding of the company’s tax position before making critical decisions.
What are the potential outcomes of Tax Due Diligence?
Our findings will highlight any tax risks, compliance issues, or areas where improvements are needed. We provide recommendations to address these issues, helping you make informed decisions.
What happens if tax issues are found during Due Diligence?
If tax issues are identified, we’ll work with you to develop strategies to mitigate these risks. This may involve negotiating with the other party in the transaction or addressing the issues before proceeding.
Can Tax Due Diligence prevent future tax disputes?
While it can’t guarantee immunity from future disputes, Tax Due Diligence significantly reduces the risk by ensuring that any existing issues are identified and addressed early on.
Can Tax Due Diligence affect the valuation of a company?
Yes, Tax Due Diligence can impact a company’s valuation. Unresolved tax issues or significant liabilities discovered during the process may lead to adjustments in the purchase price or deal terms.
What are the common challenges in Tax Due Diligence in Indonesia?
Challenges include navigating complex tax regulations, incomplete or inaccurate financial records, and historical non-compliance.
How does Tax Due Diligence differ from a standard financial audit?
A financial audit focuses on the accuracy of financial statements, while Tax Due Diligence specifically examines tax compliance and risks. The two processes complement each other but serve different purposes.
