A newly issued regulation on the CFC rule expands the scope of definition of “CFC” to include an indirectly owned CFC. As such, investor(s) (in this case, the Indonesian taxpayer, settlor and/or beneficiary) owning a CFC through a trust arrangement will be subject to the CFC rule. Depending on the type of the trust, the investor(s) as well as the trust may be subject to tax under this rule. The Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI) stipulates several provisions related to trust arrangements, including with regard to taxation treatment of capital gains derived from alienation of shares or interests of entities deriving their value principally from immovable property (real property). In particular, Indonesia uses the MLI to focus on modification to taxation regulations on permanent establishments to prevent tax abuse and treaty shopping.