Corporate Income Tax Facilities in Pioneer Industries

On 26 November 2018, the Ministry of Finance (MoF) issued regulation No.150/PMK.010/2018 (“PMK-150”) regarding Corporate Income Tax (CIT) Reduction Facilities, which replaces the previous regulation No.35/PMK.010/2018 (“PMK-35”). PMK-150 aims to increase direct investment activities in pioneer industries and to align with the mission of the new business licensing platform, i.e. Online Single Submission (OSS).

The CIT reduction facilities are given to Taxpayers that establish new investments in Pioneer Industries and meet certain criteria. The income tax reduction is given at 50% or 100% and can be applied for 5 (five) up to 20 (twenty) years, depending on the investment value, which ranges from IDR 100 billion to IDR 30 trillion.

The application for CIT reduction should be submitted to the DGT through the OSS system and can be utilized starting in the tax year of commercial production. Similar to the previous regulation, there are obligations to submit periodic reports, comply with the investment restrictions, perform certain administration matters, and undergo a tax audit to determine the event of commercial production.

PMK-150 became effective on 27 November 2018.

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