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-equity ratio of 4:1, above which borrowing costs are nondeductible. This applies for Indonesian resident taxpayers (domiciled or incorporated). It does not apply for non-residents or permanent establishments of non-residents in Indonesia. The affected borrowing costs specified in the regulation include: Loan interest expenses;...