Facilities in the Special Economic Zone
- April 13, 2020
- Posted by: Administrator
- Category: Tax News
On 20 February 2020, the Government of the Republic of Indonesia issued Regulation No. 12 Year 2020 concerning Facilities in the Special Economic Zones for New Investment or Business Expansion of Certain Labour-Intensive Business Group.
Special Economic Zones or Kawasan Ekonomi Khusus (“KEK”) is an area with a certain limitation in the Republic of Indonesia, which is designated to carry out economic functions and obtain certain facilities.
Corporations or Business Practitioners conducting business activities in the KEK are provided with facilities and privileges for:
- taxation, customs, and excise;
- goods traffic;
- land and spatial planning;
- business licensing; and/or
- others facilities and privileges (will be stipulated in regulations).
Business group in KEK eligible for the above facilities, including:
- KEK development and management;
- KEK infrastructure supply;
- certain commodities processing from upstream to downstream;
- manufacturing industries of certain products;
- energy development;
- logistics centre;
- tourism, health, education;
- research and technology development;
- financial services;
- creative industries; and
- other business fields determined by the National Council.
Facilities and privileges for taxation, customs and excise are in the forms of Income Tax, Value Added Tax (VAT) and/ or Sales Tax on Luxury Goods (LGST), Import Duty and Tax on Importation, and/or Excise. To obtain these facilities and privileges, Corporations should fulfil the following requirements, i.e.:
- The Domestic Corporate Taxpayers, head office and branches, conducting business in KEK;
- obtaining designation as Corporations to develop and/or manage KEK from the relevant authorities; and
- having Business Licenses.