TAX CERTAINTY IN LIGHT OF TWO-PILLAR SOLUTION: THE ROAD TO INTERNATIONAL TAX ARBITRATION FOR INDONESIA?

As one of the members of the OECD Inclusive Framework, Indonesia is participating the global consensus discussions on Pillar One and Pillar Two, where the signing of the Multilateral Convention of the Two-Pillar Solution is scheduled in 2024. One of the key elements, tax certainty, is designed with mandatory and binding dispute resolution mechanism that resembles to arbitration. Currently, Indonesia’s tax dispute resolution regime does not adopt arbitration mechanism. This article juxtaposes the international tax dispute resolution landscape (under the OECD Model and the UN Model, as well as under the EU Directive and the US Model) with the dispute resolution mechanisms that will be implemented under Pillar One and Pillar Two, which are ultimately reflected in the Indonesia’s tax dispute resolution. At the end of the article, it can be concluded that the tax certainty design adopted by the Two-Pillar Solution corresponds to mandatory and binding MAP arbitration, accordingly when the Multilateral Convention on the Two-Pillar Solution was signed, Indonesia entered a new era of the arbitration adoption in its international tax dispute resolution.