Kamis, September 5, 2019

Taxation Incentives to be Addressed under New Taxation Law

In a bid to accelerate economic growth in Indonesia, the Indonesian Government is currently formulating the Draft Bill on Taxation Provisions and Facilities (“Draft Bill”). In essence, the Draft Bill will contain various provisions which address the expansion of the digital sector, as well as various taxation incentives.
It has been predicted that the Draft Bill will ultimately have an impact upon three prevailing laws, specifically: 1) Law No. 7 of 1983 on Income Tax, as amended several times, most recently through the issuance of Law No. 36 of 2008 (“PPh Law”); 2) Law No. 8 of 1983 on Value-Added Tax and/or Luxury Goods Sales Tax, as amended several times, most recently through the issuance of Law No. 42 of 2009 (“PPN Law”); and 3) Law No. 6 of 1983 on General Taxation Provisions and Procedures, as amended several times, most recently through the issuance of Law No. 5 of 2008 (“Taxation Law”).
One of the most important provisions set out under the Draft Bill is the deduction which will be made to the corporate PPh tariff. This tariff is currently set at 25% but will gradually be reduced to 20%. Furthermore, public companies may enjoy a further deduction down to a PPh tariff of 17%. The Draft Bill also addresses the fact that PPh for dividends may be written-off if dividends are invested in Indonesia.
For more on this story, see Hukumonline: “Jumlah Insentif Dijanjikan dalam RUU Perpajakan Baru”.

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In a bid to accelerate economic growth in Indonesia, the Indonesian Government is currently formulating the Draft Bill on Taxation Provisions and Facilities (“Draft Bill”). In essence, the Draft Bill will contain various provisions which address the expansion of the digital sector, as well as various taxation incentives.
It has been predicted that the Draft Bill will ultimately have an impact upon three prevailing laws, specifically: 1) Law No. 7 of 1983 on Income Tax, as amended several times, most recently through the issuance of Law No. 36 of 2008 (“PPh Law”); 2) Law No. 8 of 1983 on Value-Added Tax and/or Luxury Goods Sales Tax, as amended several times, most recently through the issuance of Law No. 42 of 2009 (“PPN Law”); and 3) Law No. 6 of 1983 on General Taxation Provisions and Procedures, as amended several times, most recently through the issuance of Law No. 5 of 2008 (“Taxation Law”).
One of the most important provisions set out under the Draft Bill is the deduction which will be made to the corporate PPh tariff. This tariff is currently set at 25% but will gradually be reduced to 20%. Furthermore, public companies may enjoy a further deduction down to a PPh tariff of 17%. The Draft Bill also addresses the fact that PPh for dividends may be written-off if dividends are invested in Indonesia.
For more on this story, see Hukumonline: “Jumlah Insentif Dijanjikan dalam RUU Perpajakan Baru”.

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