Income Tax Incentives in Response to COVID-19
- July 13, 2020
- Posted by: Administrator
- Category: Tax News
On 10 June 2020, the Government issued Regulation No. 29 of 2020 (GR-29) providing Income Tax Facilities to qualified parties that have assisted the government in handling the COVID-19 pandemic.
- 30% additional deductible cost from the total costs for an Indonesian Taxpayer that produces medical devices and/or household health supplies for handling COVID-19.
- Such reduction may be applied on the medical devices’ production costs that are incurred up to 30 September 2020, which are expensed simultaneously in the same fiscal year / period when the relevant costs are incurred. Taxpayers that use this facility shall submit a report of the medical device production cost to the Directorate General of Taxes (DGT).
- Donations that may reduce gross income.
- Donations in the form of money, goods, services and/or asset utilization without receiving any compensation.D
- Donations made to a donation collection organizer such as BNPB, BPBD, Ministry of Social Affairs, Ministry of Health, and any other donation collector institutions
- Additional income from the Government received by an Individual who works in the health sector/ institution handling the COVID-19 pandemic will be subject to 0% income tax rate. The 0% rate will be valid up to 30 September 2020.
- Income received from the Government in the form of compensation and/or indemnity from the rental of land, building, and any other assets related to COVID-19 handling is subject to 0% final income tax rate. The 0% rate will be valid up to 30 September 2020.
- Buybacks of shares that are traded through the stock exchange.
- Indonesian qualified share issuers that buy back the company’s shares may be entitled to a 3% lower income tax rate if the buyback is in line with the policy from the central government or the authorized institution to cope with significantly fluctuating market conditions.
- The facility will be valid if the share buybacks are done before 30 September 2020.