New income tax incentives
12 Dec 2019
On 13 December 2019, Indonesia issued Gevernment Regulation 78 of 2019, which sets out a variety of tax incentives for businesses investing in specific industries and provinces in the country.The regulation came into effect on 12 December 2019.
The incentives include among others:
- A 30% deduction from net income based on the value of qualifying investments in tangible fixed assets including land used for the main business activities. The incentive is provided over six years (5% per year).
- Accelerated depreciation of tangible fixed assets and accelerated amortization of intangible assets obtained in the context of qualifying investment.
- A 10% withholding tax on dividends paid to non-resident taxpayers, other than permanent establishments in Indonesia, or lower rates according to an applicable tax treaty; and
- An extended loss carry-forward period by up to 5 years (up to 10 years total) depending on the sector of investment, the size of investment, the number of jobs created, whether R&D costs for product development or production efficiency is at least 5% of the investment, and whether exports represent at least 30% of sales in a year for investments in certain sectors.
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Type:
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Promotion and facilitation (Investment incentives)
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Sources:
