Page 30 - SUSTAINABILITY ISSUES & COVID-19

2.4.1 Basis for Tax Treatment of Book Value Method
In the Minister of Finance Regulation Number 52 / PMK.010 / 2017, Taxpayers who can use book value for the transfer
of assets are:
a. Taxpayers who transfer assets for the purpose of mergers, which include business mergers or business
consolidations;
b. Taxpayers who transfer assets in the context of business expansion, namely:
• Taxpayers who have not gone public who will make an initial public offering (Initial Public Offering); or
• Taxpayers who have gone public as long as all business entities resulting from the expansion have made an
Initial Public Offering.

In this case, the residual loss from the transfer of assets received by the taxpayer becomes smaller or has no residual
loss at all compared to the transfer of assets based on the remaining fiscal and commercial losses. The requirements
that must be met by a Taxpayer who transfers assets in the context of a business merger or business expansion are
contained in Article 2 Paragraph 1 PMK No. 52/010/2017, among others:
• Submit an application and attach the reasons and objectives of the business merger / expansion to DGT no later
than 6 months after the effective date of the merger, consolidation, expansion, or business takeover;
• Meet the requirements for business purposes (business purpose test) and pay off all remaining tax payable from
the related business entity and;
• Obtain a fiscal certificate from the Directorate General of Taxes for each domestic corporate taxpayer and related
permanent establishment.

3. METHOD

This research was conducted to answer how research questions evaluation of the implementation of the rules on the
use of book value in the context of a merger that occurred in a subsidiary of PT Rajawali Nusantara Indonesia (Persero)
and how the company’s readiness and strategy in implementing book value for business mergers were carried out. This
chapter will discuss the research approach used, data collection methods, unit of analysis, an overview of the company,
and the research design to be carried out.
a) Case Study
The researcher chose this case study to answer research questions regarding the phenomenon that occurred in
the subsidiary of PT Rajawali Nusantara Indonesia (Persero) in which could only be answered through case study
research. In this case, the case study allows researchers to dig deeper and in detail regarding the evaluation of the
implementation of the rules for using book value in the context of business merger and the company’s readiness
and strategy in implementing book value for business mergers in subsidiaries.
b) Qualitative Methods
In this study using qualitative methods. The Descriptive quantitative method involves the researcher directly with
the object to be studied to allow bias to arise, therefore in the process and results of the research the researcher
must practice the validity criterion which is the most important part of the research. This type of descriptive
analysis approach is used to describe the research problem, namely the evaluation of the rules for the use of book
value in the framework of tax planning and the readiness and strategy of the company in implementing book
value for business mergers in subsidiaries. To support this validity, the researcher also uses financial report data
to describe the overall implications for the merger by evaluating the rules for using book value in the context of a
business merger carried out by a subsidiary of PT Rajawali Nusantara Indonesia (Persero).
c) Interview
This interview was conducted once in two sessions with two different sources, namely are Mr. Warsim as Vice
President of Planning & Transformation and Mr. Eko Purwanto as Corporate Tax Manager.
d) Documentation
The researcher will take documents related to the business merger process, organizational structure, company
operational activities, related subsidiary financial reports, as well as a decision letter to permit the use of book
value or market value approved by the Directorate General of Taxes (DGT).

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