blue-green

Incentives

2 years import duty exemption; or directly apply for 4 years for companies using locally-produced machines (min. 30%).

For industries which produces goods and/or services, including:

1. Tourism and culture

2. Public transportation

3. Public health services

4. Mining

5. Construction

6. Telecommunication

7. Port

Requirements:

Imported machine, goods and raw material are:

  • Not yet being locally produced.
  • If the local machines are available, yet unable to fulfill criteria of required machines.
  • If the local machines are available, yet unable to fulfill the total required machines.

30 % of investment value 145 business fields Eligible for tax allowance, expanded from 143 segments in the previous regulation with additional segment: textile industry. Under certain requirements among others: investment value or export orientation, manpower absorption, local content, and project location (especially outside Java island). Deduction of net corporate income which amount 30% from total investment, carried over 6 years period (equal to 5% deduction per year).


Tax Allowance Calculation Illustration: PT ABC

Total Investment: US$ 10,000,000

Deduction per year: 5% x US$ 10,000,000 = US$ 500,000

Deduction for 6 years: 6 x US$ 500,000 = US$ 3,000,000

The Minister of Finance (MoF) has issued an updated Tax Holiday policy through Regulation No. 150/PMK.010/2018 on 27 November 2018. This regulation revokes the MoF Regulation No. 35/PMK.010/2018.

The Corporate Income Tax reduction can be given for 5 - 20 fiscal years, based on investment value and eligible for projects that considered strategic for the Indonesian economy.

The 18 eligible pioneer industries are:

  1. Upstream basic metal
  2. Oil and gas refinery
  3. Petrochemicals from oil, gas, or coal
  4. Organic basic chemicals from agriculture, plantation, or forestry products
  5. Inorganic basic chemicals
  6. Pharmaceutical raw materials
  7. Irradiation, electromedical, or electrotherapy equipment
  8. Main components of electronics or telematics equipment, such as semiconductor wafer, backlight for LCD, electrical driver, or display
  9. Machinery and main components of machinery
  10. Robotics components that support the creation of manufacturing machinery
  11. Main components of power plant machinery
  12. Motor vehicles and main components of motor vehicles
  13. Main components of vessels
  14. Main components of trains
  15. Main components of aircraft and activities supporting the aerospace industry
  16. Agricultural, plantation, or forestry-based processing that produce pulp
  17. Economic infrastructure
  18. Digital economy which includes data processing, hosting, and related activities


Click here for the infographic


Click here for the regulation