Comprehensive Guide: How to Report Foreign Income in Corporate Income Tax Return (Coretax)

1. Introduction

In the era of global tax transparency and the implementation of the Core Tax Administration System (Coretax), reporting income sourced from abroad is a crucial aspect for Corporate Taxpayers in Indonesia. Indonesia adheres to the Worldwide Income principle, where Resident Taxpayers are taxed on all income, whether received from Indonesia or outside Indonesia.

The Coretax system brings fundamental changes to this reporting mechanism. While previously in the e-Form system reporting was done by filling out static attachments, Coretax uses a data-driven approach with a dynamic wizard interface. Foreign income reporting is now centralized in Attachment 3 (Lampiran 3/L3), which is directly integrated with the Foreign Tax Credit calculation (Income Tax Art. 24) in the Master SPT.

This article will thoroughly explore the technical steps, data structure, tax credit calculation logic, and case illustrations for reporting foreign income based on the latest regulation PER-11/PJ/2025.

2. Legal Basis and Regulatory References

This reporting procedure is based on the following legal framework:

1. Law Number 7 of 1983 concerning Income Tax as amended by the Harmonization of Tax Regulations Law (Article 24 regarding Foreign Tax Credit).
2. Minister of Finance Regulation Number 81 of 2024 concerning Tax Provisions for the Implementation of the Core Tax Administration System (Coretax).
3. Director General of Taxes Regulation Number PER-11/PJ/2025 regarding the Form, Content, and Procedures for Filling Unified Periodical Income Tax Returns, Periodical Value Added Tax Returns, and Annual Income Tax Returns.

3. Attachment Trigger Mechanism in Coretax

In Coretax, Attachment 3 (L3) does not immediately appear unless the Taxpayer provides confirmation in the Master form. This mechanism is called dynamic form rendering.

Steps to Activate Attachment:

1. Login & Impersonate: Log in to Coretax using the Management account, then perform impersonating to the Corporate Taxpayer account.
2. Create SPT Concept: Select the Annual SPT menu and create a new concept (draft).
3. Answer Master Questions: In Section E (Tax Payable Deduction) Point 13 of the Master Form, there is a question: "Are there any tax credits paid abroad and/or withheld/collected by other parties?".
4. Select "YES": By selecting "Yes", the system will activate Attachment 3.

4. Structure of Attachment 3 Part A (Foreign Income)

Based on PER-11/PJ/2025 and the Coretax Manual Book, Attachment 3 Part A is the specific place to detail foreign income. Taxpayers must input data per transaction or per withholding slip,.

Table 1: Data Structure of Attachment 3 Part A in Coretax

5. Tax Credit Calculation Logic (Income Tax Art. 24)

The Coretax system facilitates input, but Taxpayers must still understand the tax credit limitation logic according to Article 24 of the Income Tax Law adopted in PER-11/PJ/2025.

The Tax Credit Limit is taken from the lowest value between:

1. The actual amount of tax paid/withheld abroad.
2. A certain amount calculated by the formula:
   (Foreign Net Income / Total Taxable Income) x Total Tax Payable
3. The amount of tax payable if all taxable income is subject to the applicable tax rate,.

The calculation is done per country (ordinary credit per country basis). If there is a loss abroad, that loss cannot be combined/compensated (considered zero in the credit calculation),.

6. Case Illustration

Scenario: PT Global Ekspor Indonesia

Profile:

• PT Global Ekspor Indonesia (Domestic Corporate Taxpayer).
• Tax Year: 2025.
• Total Global Taxable Income (PKP): IDR 10,000,000,000.
• Corporate Tax Rate: 22%.
• Total Tax Payable (22% x 10 B): IDR 2,200,000,000.

Foreign Income Data:

1. Country A (Singapore): Received Dividends of IDR 2,000,000,000. Tax withheld in Singapore (17% Rate): IDR 340,000,000.
2. Country B (Japan): Received Royalties of IDR 1,000,000,000. Tax withheld in Japan (10% Tax Treaty Rate): IDR 100,000,000.

Tax Credit Limit Calculation:

1. Country A (Singapore):

• Actual Tax: IDR 340,000,000.
• Maximum Limit: $(2,000,000,000 / 10,000,000,000) \times 2,200,000,000 = \text{IDR 440,000,000}$.
• Allowable Credit: IDR 340,000,000 (Choose the lowest).

2. Country B (Japan):

• Actual Tax: IDR 100,000,000.
• Maximum Limit: $(1,000,000,000 / 10,000,000,000) \times 2,200,000,000 = \text{IDR 220,000,000}$.
• Allowable Credit: IDR 100,000,000 (Choose the lowest).

Total Foreign Tax Credit: IDR 340,000,000 + IDR 100,000,000 = IDR 440,000,000.

Here is how PT Global Ekspor Indonesia fills Attachment 3 Part A in Coretax:

Table 2: Filling Illustration in Coretax (Attachment 3 Part A)

Note: The "Creditable Tax" column is filled manually by the Taxpayer based on the PPh 24 limit calculation, not automatically by the system.

7. Integration with Other Attachments

Besides Attachment 3, reporting foreign income also relates to other attachments in Coretax:

• Attachment 10C (Tax Haven Country): If income comes from a Tax Haven Country and there is a special relationship, the Taxpayer must also fill out Attachment 10C to report details of the affiliated transaction,.
• Attachment 11C (Private Offshore Debt): If the foreign income is related to funding or there is debt from a foreign party, Attachment 11C must be filled.
• CbCR Report: If the Taxpayer is an Ultimate Parent Entity with a certain consolidated turnover, CbCR (Country-by-Country Report) reporting must also be done through the Exchange of Information menu in Coretax, separate from the Annual SPT but the data is interconnected.

8. Validation and Error Prevention Tips

1. Withholding Evidence Documents: Ensure you have scanned original tax withholding evidence from the tax authority or withholder abroad. This document must be uploaded. Without this upload, the Coretax system might reject the tax credit recognition,.
2. Tax Rate: Use the Minister of Finance Rate (KMK) applicable on the date of tax withholding/payment abroad, not the BI middle rate or spot rate.
3. Treaty Partner Countries: Ensure the tax rate withheld abroad complies with the Tax Treaty (P3B). If the withholding abroad exceeds the P3B rate (e.g., withheld 20% even though P3B is 10%), then what can be credited in Indonesia is only the P3B rate (10%). The difference must be requested as a refund to the source country, not credited in Indonesia.

9. Conclusion

Reporting foreign income in the Coretax Corporate Annual SPT demands accuracy in data input in Attachment 3 Part A. The main change lies in the wizard interface and data integration. Taxpayers must ensure the tax credit limit calculation (Income Tax Art. 24) is done correctly manually before inputting it into the "Creditable Tax" column, and complete valid supporting documents. With a good understanding of PER-11/PJ/2025, this reporting process can be done efficiently and compliantly.

References:

• Peraturan Direktur Jenderal Pajak Nomor PER-11/PJ/2025.
• Peraturan Menteri Keuangan Nomor 81 Tahun 2024.
• Undang-Undang Nomor 7 Tahun 1983 s.t.d.t.d UU HPP (Pasal 24).