In order to implement the provisions of Article 3 paragraph (3), Article 7 paragraph (3), and Article 11 paragraph (5) of Minister of Finance Regulation Number 130/PMK.010/2020 concerning Granting of Corporate Income Tax Deduction Facilities, on 3 December 2020, the Indonesian Investment Coordinating Board (“BKPM”) issued Regulation Number 7 concerning the Details of Business Fields and Types of Pioneering Industry Production and Procedures for the Granting of Corporate Income-Tax Deduction Facilities (PER-BKPM 7/2020).

• Corporate taxpayers that make new investments in pioneering industries may be granted corporate income tax deductions for income that is received or obtained through the relevant primary business activities.
• The Pioneer Industries as mentioned above were stipulated in the Regulation of the Minister of Finance (MoF) that regulates the granting of corporate Income Tax reduction facilities. The businesses and the production of each of the pioneer industries were listed in Appendix I of this regulation.
• In order to obtain the facilities, the taxpayer must submit an application through the Online Single Submission (OSS) system. If the OSS system is not available, the assessment of fulfillment of criteria and the application for corporate income tax deduction facilities should be completed offline.
• The criteria which must be met in order for the OSS system to be declared unavailable are as follows:
  1. OSS system for determinations of the fulfillment of criteria for the submission of applications for corporate income tax deductions during the transition period;
  2. The OSS system is experiencing technical problems and cannot be accessed for five working days;
  3. Lack of available internet connectivity through which to upload requests in certain districts/cities; or
  4. Force-majeure events.
• Offline applications for corporate income-tax deduction facilities should be sent to the BKPM using the application form set out under Appendix II to this regulation and must enclose the relevant required documents
• The provisions regarding applications for corporate income tax deduction facilities also apply to corporate taxpayers operating within business fields that are not listed under Appendix I to this regulation. In addition to the required documents, said corporate taxpayers should enclose:
  1. Study on the fulfillment of pioneering industry criteria; and
  2. Self-calculation of quantitative criteria for pioneering industries which should achieve a score of at least 80.

This regulation became effective on 4 December 2020.