Indonesian oil and gas subsidiary completes annual accounting and tax filings

Since 2003, Healy Consultants Group assists multinational Clients fulfil the annual accounting and tax obligations for their Indonesian subsidiaries.

In August 2021, we were engaged by an Irish national from the oil and gas industry to complete his company’s annual renewal obligations in Indonesia including i) nominee professional passive resident director ii) company secretary and registered office iii) annual corporate income tax filing with the Indonesian Taxation Office (DJP) and iv) quarterly Investment report (LKPM) filing with Investment Coordination Board (BKPM).

• Engagement planning

  • I emailed my Client a detailed engagement summary outlining i) documents required to complete the renewal process ii) weekly and monthly deliverables and iii) an estimated timeline to complete the engagement.
  • Same week I had a call with the Client to clearly outline details of this engagement and addressed my Client’s questions and concerns.
  • Thereafter, I sent an Engagement Summary file. This document is designed to assist our Clients to identify the timeline and steps required to legally complete the annual obligations of its Indonesian subsidiary. In particular this enables the Client to supply our Firm with all necessary documents to advance the engagement, in a timely manner.
  • The financial year-end of the Indonesian subsidiary is 31 December. The company must meet the following deadlines. During the planning stage, these deadlines were communicated to our Client.
    

    Filings	Deadline
    Annual Corporate Tax Return	30 April
    LKPM reporting (Jan-Mar)	30 April
    LKPM reporting (Apr-June)	31 July
    LKPM reporting (Jul-Sept)	31 October
    LKPM reporting (Oct-Dec)	31 January

  • I researched and verified with our local team the possibility of minimising compliance, accounting and tax obligations for this dormant entity. However, it was confirmed that the dormant entity was obliged to file its annual corporation tax return and LKPM report.

• Accounting and tax filings

  • The Client confirmed in writing that the Indonesian subsidiary is dormant and had no business transactions during the financial year-ended (FYE) 31 December 2020.
  • Following the above, I prepared the draft of dormant financial statements and tax computations for FYE 2020.
  • The draft of financial statements has been reviewed and approved by Healy Consultants Group’s management before it reached our Client.
  • Immediately after securing the Client’s approval, the financial statements were forwarded via HelloSign (secured signing platform) for Directors e-signature.
  • Immediately after securing the Client’s signature, our local tax team in Indonesia prepared the draft corporate tax return for the Client’s review and approval.
  • Once our Client approved the draft tax return, the tax agent filed the tax return via the Indonesian tax portal (DJP) within given deadline and with no incontinence to our Client.

• Investment report filing (LKPM)

  • All Indonesian entities are required to file an investment report (LKPM) with the Investment Coordination Board (BKPM) on a quarterly basis.
  • The report includes the details of i) business activities, ii) licensed and non-licensed investment owned, iii) total number of employees and iv) any problems faced by the business.
  • Since the Indonesian entity was incorporated in July 2020, it was required to complete the LKPM filing for the September and December 2020 quarters.
  • Since the company is dormant and does not own any corporate bank account, my team and I prepared a dormant LKPM report and sent it to the Client for review and approval.
  • Immediately after securing the Client’s approval, our local Indonesian team submitted the LKPM report for September and December quarter to BKPM.

• Engagement completion

  • Once all of the above were completed, I sent a summary of obligations to the Client. This report included i) Financial statements ii) Acknowledgement of corporate tax return and iii) confirmation LKPM quarterly filings.
  • Thereafter, our IT department contacted the Client to obtain a professional reference and leave an online review.
  • Following that, our business development team recorded a 1-minute podcast about the Vietnam entity renewal process and uploaded it to our website.