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Determination of Debt to Equity Ratio of Company in Relation to the Calculation of Income Tax

Minister of Finance Regulation No. 169 / PMK.010 / 2015, contains some of the following important points:
Debt to Equity Ratio (DER) is 4: 1. If the Company exceeds the DER, the borrowing costs to be corrected.
If the companys equity is negative, the entire cost of borrowing corrected.
There is an exception for the industry: banks, financial institutions, insurance, mining, infrastructure, and the income subject to final.
Private foreign debt should be required to report the The Directorate General of Taxation (DGT). If not reported, cost of loan should not be charged.
The regulation will be effective on 2016.

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