|COVID-19 PANDEMIC: INDONESIAN GOVT. HAS OFFERED TAX INCENTIVES
To provide support for businesses and individuals during the COVID-19 crisis in Indonesia, the Minister of Finance has issued PMK 44/2020 regarding business sectors that are eligible for tax incentives.
There are 4 types of tax incentive applications that are valid from April to September 2020:
1. Zero payroll tax (tax art. 21)
2. 30% discount of Company Income Tax Installment (tax art. 25) or 0% Final Income Tax for SME (Tax PP 23)
3. Zero import tax (Art. 22) – Company is required to have a KITE License (Import for Tax Purpose)
4. Expedite VAT refund – In addition to having a KITE, this is applicable as well for companies stating overpayment on their VAT Return
For clients who are eligible, our tax consultants can provide consultation and tax incentive application services:
1. Tax Incentive Notification Letter (one time submission)
2. Payroll modification for zero payroll tax from April to September 2020
3. Realisation report from April to September 2020
There is no denying that the coronavirus, also known by its popular name COVID-19, has put the world’s economy in a slow mode, and Indonesia is no exception. The government has been forced to cut the country’s revenue through cutting corporate income tax, among others.
What is more, the government has accelerated its tax reforms along with collecting taxes from IT companies in Indonesia in order to provide tax relief to bring back the country’s economy in the long run.
Read on to learn about the current tax regulations, stipulated under Perppu No. 1/2020, in Indonesia.
Due to the current public health situation, the newest tax calendar in Indonesia that you should be referring to in order to ensure compliance is as follows:
In light of the coronavirus pandemic, the government has made official new tax incentives or exemption, as follows:
Employers or companies that are eligible for the newest tax incentives are as follows:
In order to prevent layoffs, or worse bankruptcies, because of inactivities amid the pandemic, the government has implemented a new stipulation that reduces the corporate income tax (CIT) from 25 percent to 22 percent. The reduction applies for the years of 2020 and 2021. According to plan, there will be another two percent reduction in 2022.
As for public companies having a minimum of 40 percent shares in the stock market, the CIT will be deducted to 19 percent in 2020 and 2021. When 2022 starts, the CIT will be reduced to 17 percent only.
To ease the burden of many low-income individuals during this difficult time, the government has also exempted employees or workers who earn not more than IDR 200 million annually from paying their income taxes for the next six months.
The government aims at easing the burdens of individuals and businesses suffering from the pandemic. However, the government also aims at increasing state revenue by leveraging the e-commerce activities or digital transactions.
Tremendously established digital companies along with foreign individuals carrying out the above-mentioned activities or transactions are required to comply with domestic tax stipulations.
Furthermore, value added tax (VAT) will also be imposed on intangible taxable goods and services that are sold electronically and from overseas.
As a leading consulting company in Indonesia, Cekindo’s team of tax consultants and experts always keeps up with the newest tax regulations. You are welcome to consult any matter related to taxation and compliance in Indonesia with our people.
Moreover, we also provide tax outsourcing services to ensure compliance for your business in Indonesia, especially amid the coronavirus outbreak in Indonesia.
Whatever your taxation need is, do not hesitate to discuss with us. Fill in the form below now. We are happy to help.