On 9 September 2015, Indonesia's Ministry of Finance issued Regulation No. 169/PMK.010/2015, which includes new rules on borrowing cost deductions for the purpose of calculating taxable income (thin capitalization rules). The following summarizes the main aspects of the new rules, which apply for the 2016 tax year and subsequent years.

Debt-to-Equity Ratio

The regulation sets a debt-to-equit…