Entity Setup
Entity Setup for Tax-Neutral Restructurings in Indonesian State-Owned Enterprises
Recent Indonesian regulations allow BUMNs to carry out tax-neutral restructuring under certain conditions—this guide walks through how companies can align their operations with the new facilities.
By NomadicTax Research Team • 5-8 min read • August 24, 2026
## What’s New
Indonesia’s **Directorate General of Taxes (DJP)** laid out three key facilities in a public statement on **August 19, 2026** to support **tax-neutral restructuring** of State-Owned Enterprises (BUMNs):
- *Fasilitas Nilai Buku* (non-recognition / deferred taxation on asset transfers within group),
- Implementation of **PMK 1/2026** and **PMK 44/2026**, and
- Emphasis on **Tax Control Framework (TCF)** and stricter requirements for taxpayer representatives. ([pajak.go.id](https://pajak.go.id/id/siaran-pers/kawal-restrukturisasi-bumn-kanwil-djp-wajib-pajak-besar-berusaha-realisasikan-target?utm_source=openai))
These changes are aimed at supporting corporate streamlining by offering **certainty and transparency**. The non-recognition rule defers tax until the asset is sold outside the group; the taxpayer representative rules now require technical competency or proper registration. ([pajak.go.id](https://pajak.go.id/id/siaran-pers/kawal-restrukturisasi-bumn-kanwil-djp-wajib-pajak-besar-berusaha-realisasikan-target?utm_source=openai))
## Preconditions & Requirements
To qualify for the Nilai Buku facility, BUMNs must satisfy:
- A valid **Business Purpose Test (BPT)**, and
- Assets cannot be transferred outside the group within **two years** after restructuring.
For appointing a **Kuasa Wajib Pajak** (tax representative):
- Must be either a **licensed tax consultant**, or another individual satisfying technical competence (with registration as SKT), or family up to second degree.
- When appointing via power of attorney—can be electronic or physical.
- Registration in DJP’s system required. ([pajak.go.id](https://www.pajak.go.id/index.php/id/siaran-pers/pmk-nomor-44-tahun-2026-permudah-penunjukan-kuasa-wajib-pajak-dengan-tetap-menjunjung?utm_source=openai))
## What is TCF?
The **Tax Control Framework** is DJP’s tool for cooperative compliance:
- Aligns companies’ financial accounting (General Ledger) with tax return submissions to avoid disputes.
- Requires strong internal controls, risk assessments, and making consistent tax governance part of corporate operations.
## Actionable Advice
- Before restructuring, document and justify all entity changes with BPT evidence. Include financial projections and group structure roadmaps.
- Map all inter-company asset transfers and ensure no “leakage” outside group during two-year threshold.
- Evaluate whether your current **tax representatives** meet the technical/registration-based requirements; update agreements as needed.
- Implement or enhance tax governance and internal audit functions to prepare for compliance under TCF.
## Example
*Wanted to consolidate manufacturing units under one holding company*: the entity transfers machines and land to the holding company within the group. Under Nilai Buku, tax on those assets is **deferred** until sold externally. They appoint a family member as representative, but that person needs SKT registration and competency certification due to PMK 44/2026. They also upgrade their accounting and tax reporting system so their GL is ready to match submissions under TCF.
## Considerations & Risks
- Losing eligibility if transfer is outside group within two years.
- High compliance and documentation burden—business purpose, internal controls, audit trails must be strong.
- Representational mistakes: improper appointment or unqualified representative can nullify benefits or invite penalties.