- Through the issuance of Regulation of the Minister of Finance No. 16/PMK.010/2020 on the Granting of Net-Income Reduction Facility upon New Investments or Expansion of Business of Certain Business Sectors which are Labor-Intensive Industries, the Directorate General of Tax (“Directorate General”) aims to grant new taxation incentives for domestic corporate taxpayers (“Taxpayers”) which have new investments or expand their businesses into one of the 45 predetermined business sectors within the Indonesian Standard Industrial Classification and employ at least 300 Indonesian workers.
- If the requirements are satisfied, the Taxpayers will receive a reduction upon their net income amounting to 60% of the total investment in the form of tangible fixed assets, including lands, which are used in their main business activities. Such income reduction will be imposed for six fiscal years since the commencement of commercial production, each in the sum of 10% per year.
- The application of a new taxation incentive through the Online Single Submission (OSS) must be submitted before the commencement of commercial production and enclose the digital copy of shareholders’ fiscal statements and details of fixed assets in the investment value plan.
- After securing the new taxation incentive, the Taxpayers must submit the annual report on the investment realization and realization of Indonesian worker utilization, and they must not use the assets which are granted by facilities for purposes other than its stated purposes for at least six years. (ANT)
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