Avoiding Tax using Hybrid Mismatch Arrangement Schemes in Indonesia

DOI

10.2991/apbec-18.2019.20How to use a DOI?

Keywords

Tax avoidance; Base Erosion and Profit Shifting (BEPS); hybrid mismatch arrangements; hybrid financial instruments; tax arbitrage

Abstract

The present study investigates the habit in Indonesia of avoiding tax by means of hybrid mismatch arrangement schemes. A qualitative approach and data collection by means of library and field study was adopted in the present study. In-depth interviews were done with key respondents representing practitioners, academics, and tax authorities in Indonesia. The key result of the present study indicates that the habit of avoiding tax using hybrid mismatch arrangement schemes in Indonesia typically used debt/equity hybrid (financial instrument) by involving Indonesian corporations as payer. In addition, hybrid transfer and imported mismatch schemes prevail in Indonesia. Although there is no evidence of substitute payment and payment made to reverse hybrid schemes, these schemes are likely to be used in Indonesia under the current regulations and the taxation system. In general, the practice of tax avoidance using hybrid mismatch arrangement schemes in Indonesia is still limited.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Errine Nessy
AU  - Ning Rahayu
PY  - 2019/07
DA  - 2019/07
TI  - Avoiding Tax using Hybrid Mismatch Arrangement Schemes in Indonesia
BT  - Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018)
PB  - Atlantis Press
SP  - 149
EP  - 156
SN  - 2352-5428
UR  - https://doi.org/10.2991/apbec-18.2019.20
DO  - 10.2991/apbec-18.2019.20
ID  - Nessy2019/07
ER  -