Factsheet: New Income Tax Facilities

In order to boost economic growth, the Government recently issued the second amendment, Government Regulation No. 18 Year 2015 (“GR-18/2015”) to Government Regulation (“GR”) No. 1 Year 2007 (“GR-1/2007”) regarding income tax facilities on investments in certain business sectors and/or in certain regions within Indonesia (the first amendment, GR-52/2011, was issued in 2011) to attract more foreign and domestic businesses to invest in those industries and regions, effective 6 May 2015, together with implementing guidelines: Minister of Finance Regulation No. 89/PMK.010/2015 (“PMK-89/2015”), the Chairman of Indonesian Investment Coordinating Board (“BKPM”) Regulation No. 8 Year 2015 (“BKPM-8/2015”) and Minister of Industry Regulation No. 48/M-IND/PER/5/2015. Unlike GR-52/2011, there is no minimum investment amount stipulated in GR-18/2015 to obtain these new Income Tax Facilities. The investment criteria are any investments that have: 1. High investment value; 2. Export orientation; 3. High intensive labor; or 4. High local content. These Tax Facilities will be granted to both new investors and existing investors for business expansion investing in various qualified sub-business sectors located in qualified locations/regions within Indonesia. The qualified sub-business sectors that are applicable to all regions in Indonesia and to very specific locations in various regions in Indonesia are listed on the hyperlink see legislation text