Tax Facilities as an Impact of Covid-19 Pandemic

The MoF has issued Regulation No. 239/PMK.03/2020 regarding the Tax Facilities for Goods and Services Required in the Handling of the Covid-19 Pandemic and on the Extension of Income Tax Facilities based on Government Regulation Number 29 of 2020 regarding Income Tax Facilities for Handling Covid-19 (“PMK-239”).

PMK-239 is issued in order to provide more tax facilities and to extend the available tax facilities regulated in MoF Regulation No. 143/PMK.03/2020. The key changes are as follows:

  • PMK-239 adds VAT facilities for supporting equipment used in the vaccination program and other supporting services.
  • Letters of recommendation for Pharmaceutical Industry for Production of vaccines and/or medicines, previously issued by the National Disaster Management Agency (BNBP), will be processed and issued by the Ministry of Health.
  • Tax facilities for VAT, Article 22 Income Tax, and Article 23 Income Tax as mentioned in the Regulation are effective for January 2021 to December 2021 tax periods.
  • Tax facilities for Article 22 Income Tax and Article 23 Income Tax which require a tax exemption certificate from the authority are effective from the issuance date of the tax exemption certificate until 31 December 2021.
  • The following income tax reliefs for handling COVID-19 as stipulated in Government Regulation No. 29 of 2020 are extended from 1 January 2021 until 30 June 2021:
    1. Additional deduction for taxpayers producing certain medical equipment and/or household health supplies;
    2. Additional deduction for donations to certain institutions;
    3. Final income tax rate of 0% for qualifying individuals providing health services; and
    4. Final income tax rate of 0% on compensation for the use of assets to support health services.
    5. The tax relief for share buy-backs by taxpayers listed on the Indonesian Stock Exchange is not extended per PMK-239.

PMK-239 is effective starting 1 January 2021.

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