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Tax Incentives for Taxpayers Affected by COVID-19

On 23 March, the Minister of Finance issued Regulation No. 23/PMK.03/2020 (“PMK-23/2020”) dated 21 March 2020 to assist taxpayers that are being affected by the impacts of COVID-19. The issuance of PMK-23/2020 is intended to support economic stability, purchasing power, and productivity of certain sectors.

PMK 23/2020 is effective from 1 April 2020.

PMK-23/2020 potentially provides tax incentives for the following:

  • Article 21 tax to be borne by the Government (“ditanggung”) for employees of businesses in specified sectors, subject to their gross employment income.

  • Article 22 on imports will be exempted (“dibebaskan”) for businesses in specified sectors.

  • Article 25 corporate income tax instalments can be reduced by 30% for businesses in specified sectors.

  • Advance restitution of VAT for businesses in specified sectors. 

Although the title of the regulation suggests it has broad coverage and benefit, the use of specified sectors limits the tax incentives to industry/manufacturing and some ancillary sectors based on the taxpayer’s KLU (Business Classification Code) as recorded on the 2018 Annual Tax Return or, if registered after 2018, the SKT – Tax Registration Letter.

 

For futher reading :

RSM Indonesia Client Alert - Tax Incentives for Taxpayers Affected by COVID-19.pdf