Further Tax Incentives by Ministry of Finance Regulation No. 110

On August 14, Ministry of Finance (“MoF”) issued MoF Regulation No.110/PMK.03/2020, an incentive in which installment discount for Article 25 Income Tax is increased from 30% to 50%. This policy is aimed to further boost Indonesia’s economy as a response to Covid-19 that caused low level of productions and sales in the trading world.

This regulation applies to taxpayers that conduct their activities in slightly more than a thousand type of businesses mentioned in the attachment, companies that receive import facilities for export purposes, and companies in bonded zones. For taxpayers who have previously submitted an installment reduction notification, MoF Regulation No.110/PMK.03/2020 is effective from July to December tax period. For other taxpayers, the reduction will take effect since the notification is submitted until December tax period.

To obtain this incentive, taxpayers must submit a notification online through www.pajak.go.id. Taxpayers can take a look full regulation, example of calculation and realization report here.

Another provision regulated under MoF Regulation No.110/PMK.03/2020 is the final income tax for construction services for taxpayers participating in the program to accelerate the improvement of irrigation water use. This tax incentive will be borne by the government until December tax period. This is a form of support given by the government to increase water supply as an essential part of our agriculture sector.