Recently, the bond prospectus of a joint stock company announced by the Shanghai Stock Exchange disclosed that the final tax dispute of a thermal power engineering company affiliated to the group in the EPC project in Indonesia, the disputed tax amounted to more than 60 million yuan. The 2018 public document of the Shanghai Stock Exchange also disclosed the final tax dispute case of a group international cooperation limited company in Indonesia, and the disputed tax amount was as high as 147 million yuan.

 Case Study

February 2014: The Indonesian Taxation Bureau issued a tax assessment notice to China A Engineering Company, requiring it to pay a 4% final tax on the income obtained from the overseas procurement of the Indonesian National DL Company M Project and N Project during the period of 2009-2010. The tax-related amount is equivalent to RMB 60.51 million.

Due to the huge amount of tax involved, and the profits formed by this part of the income have already paid the corresponding income tax in China, if the tax is paid again in Indonesia, it will involve double taxation. In accordance with the procedures stipulated in the Agreement between the People's Republic of China and the Government of the Republic of Indonesia on the Avoidance of Double Taxation and the Prevention of Tax Evasion on Income (hereinafter referred to as the "China-Indonesia Bilateral Tax Agreement") The State Administration of Taxation proposed to initiate a mutual agreement procedure (MAP), but the implementation of the procedure did not achieve the desired results.