Summary
The Global Minimum Tax or Global Anti-Base Erosion (GloBE) is an international agreement under the OECD/G20 Inclusive Framework on BEPS to ensure multinational groups pay at least 15 percent effective tax in every jurisdiction. Indonesia adopts it through MoF Regulation 136/2024 (substantive rules) and PER-6/PJ/2026 (administrative procedures effective 4 May 2026).
This guide covers the in-scope taxpayers, the EUR 750 million threshold, the three core mechanisms IIR/QDMTT/UTPR, how to compute the Effective Tax Rate, filing obligations, and the impact on existing tax holiday facilities in Indonesia.
Understanding the Global Minimum Tax
The Global Minimum Tax or GloBE is a set of global rules establishing a minimum effective tax rate of 15 percent for multinational enterprise (MNE) groups with certain consolidated revenue. It forms Pillar Two of the OECD/G20 two-pillar solution addressing the tax challenges of digitalisation and base erosion.
The mechanic is simple on the surface: if an MNE subsidiary in a jurisdiction pays an effective rate below 15 percent, a top-up tax is collected to close the gap. The top-up tax can be collected in the parent jurisdiction (IIR), the subsidiary jurisdiction (QDMTT), or another jurisdiction (UTPR). The end goal is to halt the race-to-the-bottom in cross-border tax competition.
GloBE operates in parallel with domestic corporate income tax. It does not replace PPh Badan but adds a layer of obligation when the ETR falls below 15 percent. The ETR calculation uses GloBE rules, not the statutory PPh Badan rate.
Legal Basis
The legal foundation of the Global Minimum Tax in Indonesia consists of:
- Law Number 7 of 2021 on Harmonisation of Tax Regulations (UU HPP), Article 32A, granting authority to implement international tax agreements.
- MoF Regulation 136/2024 on the Imposition of Global Minimum Tax Based on International Agreements, Articles 1 to 25.
- PER-6/PJ/2026 on Procedures for Exercising Rights and Fulfilling Obligations of the Global Minimum Tax, Articles 1 to 13. Issued and effective 4 May 2026.
- OECD GloBE Model Rules and Commentary as technical references.
MoF Regulation 136/2024 contains the substantive rules on who is in scope, how to compute, and at what rate. PER-6/PJ/2026 covers the administrative side: registration, return types, deadlines, corrections, and disputes.
Scope and Threshold
GloBE applies to MNE groups with consolidated revenue of at least EUR 750 million in at least 2 of the 4 fiscal years preceding the running GloBE tax year. This threshold matches the Country-by-Country Reporting (CbCR) threshold that has been in force longer, so groups already filing CbCR fall onto the GloBE radar automatically.
Excluded entities include Government Entities, International Organisations, Non-Profit Organisations, Pension Funds, and certain Investment Funds as set out in the GloBE Model Rules. A de minimis exclusion applies to jurisdictions with average revenue below EUR 10 million and average GloBE Income below EUR 1 million.
From Indonesia's perspective, both a UPE (Ultimate Parent Entity) resident in Indonesia and an Indonesian Constituent Entity owned by a foreign UPE can fall in scope, with different obligations.
The Three Mechanisms
Income Inclusion Rule (IIR)
IIR charges top-up tax to the Ultimate Parent Entity (UPE) when a subsidiary in another jurisdiction is taxed at an effective rate below 15 percent. An Indonesian UPE is liable under IIR for its Constituent Entities abroad that are taxed at low rates. Effective in Indonesia from 1 January 2025.
IIR applies top-down: first to the UPE, then to any Intermediate Parent Entity if the UPE does not implement a qualified IIR. This prevents double counting and double taxation across jurisdictions.
Qualified Domestic Minimum Top-up Tax (QDMTT)
QDMTT is a domestic top-up tax collected by Indonesia on Indonesian Constituent Entities whose ETR is below 15 percent. QDMTT secures revenue for Indonesia rather than letting it shift to a parent jurisdiction's IIR. Effective from 1 January 2025.
QDMTT carries a QDMTT Safe Harbour: if Indonesia's QDMTT is considered qualified per OECD standards, IIR or UTPR in other jurisdictions will not recompute the top-up tax for Indonesian Constituent Entities. This is the strategic reason Indonesia introduced QDMTT first.
Undertaxed Payment Rule (UTPR)
UTPR is the backstop rule. UTPR applies when IIR is not implemented by the UPE jurisdiction or intermediate parent. Effective in Indonesia from 1 January 2026. Top-up tax is allocated to jurisdictions where Constituent Entities reside based on an employee and tangible asset formula with 50-50 weighting.
UTPR tax-the-tax kicks in when the UPE sits in a jurisdiction that does not apply IIR. UTPR jurisdictions (including Indonesia) then collect a share of the top-up tax that should have gone to the UPE.
Rate and Calculation
The minimum rate is a 15 percent Effective Tax Rate (ETR). Top-up tax equals the gap between 15 percent and the actual ETR, multiplied by GloBE Income after the Substance-based Income Exclusion (SBIE).
ETR is computed per jurisdiction (jurisdictional blending), not per entity. All Constituent Entities in Indonesia are aggregated to determine the Indonesian ETR. The denominator is GloBE Income; the numerator is adjusted Covered Taxes.
SBIE provides a deduction based on economic substance: a percentage of payroll and tangible assets in the jurisdiction. The SBIE percentage tapers down over a 10-year transition: 10 percent of payroll and 8 percent of tangible assets in 2023, declining to 5 percent each by the end of the transition.
How to File and Pay
In-scope taxpayers follow these steps:
- Submit an application to add GloBE Taxpayer status via DJP's electronic portal, no later than 9 months after the end of the first GloBE tax year.
- File the Annual GloBE Return electronically no later than 4 months after the end of the GloBE tax year. First-year filers may request a 2-month extension.
- File the DMTT Return (for QDMTT) and UTPR Return as applicable, by the deadlines set in PER-6/PJ/2026.
- The Ultimate Parent Entity files the GloBE Information Return (GIR) no later than 15 months after fiscal year-end, or 18 months in the first year.
- Top-up tax is due by the end of the following fiscal year, using payment codes set by DJP.
All processes run through the electronic portal. Post-filing adjustments, supervision, and audit are governed by PER-6/PJ/2026.
Case Example
PT Alpha is an Indonesian Constituent Entity belonging to Group Beta with consolidated revenue of EUR 1.2 billion. Group Beta already met the threshold in earlier years, making fiscal year 2025 its first GloBE tax year.
In 2025, PT Alpha records GloBE Income of IDR 100 billion with Covered Taxes (PPh Badan with GloBE adjustments) of IDR 10 billion. Assuming PT Alpha is the sole group entity in Indonesia, Indonesia's ETR is 10 percent, below 15 percent.
Gap to 15 percent = 5 percent. Pre-SBIE top-up tax = 5 percent x IDR 100 billion = IDR 5 billion. With Indonesian payroll of IDR 30 billion and tangible assets of IDR 80 billion, applying transitional SBIE rates of 9.8 percent and 7.8 percent: SBIE = (9.8 percent x 30) + (7.8 percent x 80) = IDR 2.94 billion + IDR 6.24 billion = IDR 9.18 billion. GloBE Income after SBIE = IDR 90.82 billion. Top-up tax = 5 percent x IDR 90.82 billion = IDR 4.54 billion.
Because Indonesia operates QDMTT, the IDR 4.54 billion is collected here through the DMTT Return, not diverted to the parent jurisdiction via another country's IIR. If Indonesia's QDMTT is qualified per OECD review, the top-up tax matter is settled in Indonesia.
Practical Implications for MNEs in Indonesia
For MNEs benefitting from tax holidays in SEZs or IKN, the impact requires reassessment. Domestic tax holidays remain valid, but if ETR falls below 15 percent due to such facilities, QDMTT recaptures the gap. Net benefit shrinks materially for large MNEs.
On transfer pricing strategy, GloBE does not replace arm's length rules under the Income Tax Law and DJP transfer pricing regulations. However, the same data (CbCR, master file, local file) feeds the calculation of GloBE Income and Covered Taxes.
CFOs and Tax Managers should map the group's ETR per jurisdiction, evaluate available safe harbours (Transitional CbCR Safe Harbour for the first 3 years), and build consolidation systems that produce GloBE Income accurately.