Expansion of Tax Incentives Related to Covid-19 (PMK44/PMK.03/2020)
- May 10, 2020
- Posted by: Administrator
- Category: Tax News
On 27 April 2020, the Government of Indonesia, through the Minister of Finance (MoF), issued regulation No. 44/PMK.03/2020 (“PMK-44”) regarding Tax Incentives for Taxpayers Affected by the Covid-19 Outbreak as a renewal of the previous regulation No. 23/PMK.03/2020 (“PMK-23”).
The main impact from PMK-44 is an expansion of the list of Taxpayers that qualify to obtain incentives related to Article 21 Income Tax, Article 22 import Income Tax, Article 25 Income Tax Installments, and Value Added Tax (VAT). This regulation also introduces additional incentives for Micro, Small and Medium Enterprises (MSMEs) that are subject to a final income tax regime of 0.5%. The following table shows the summary of the tax incentives:
| Concerning | PMK-23 | PMK-44 |
| Article 21 Employee Income Tax Borne by The Government | – Business Classification Code (440 KLU codes); – The employer has been designated as a KITE Company; – Employees have Tax ID Numbers (NPWP); – Employees earn annualized gross income of less than IDR200 million; – Notification on the realization of Income Tax Article 21 Borne by the Government is conducted every three months (no later than 20 July 2020 for the period April – June 2020 and on 20 October 2020 for the period July – September 2020). |
– Addition of Business Classification Code (1,062 KLU codes); – The employer has been designated as a KITE (Import Facility for Export Purposes) Company; or – The employer has obtained a Bonded Zone Operator permit, a Bonded Zone Entrepreneur license, or PDKB (Entrepreneur in Bonded Zone) permit; – Employees have NPWP; – Employees earn annualized gross income of less than IDR200 million; – Notification on the realization of Income Tax Article 21 Borne by the Government every 20th of the following month. |
| Final Income Tax | No incentive | Specifically, for Small and Medium Enterprises (“UMKM”) regulated in GR 23/2018 |
| Exemption from Article 22 Income Tax on Import and Refund of Excess Value Added Tax (VAT) | – Business Classification Code (102 KLU codes); – The employer has been designated as a KITE Company. |
– Addition of Business Field Classification Code (431 KLU codes); – The employer has been designated as a KITE Company; or – The employer has obtained a Bonded Zone Operator permit, a Bonded Zone Entrepreneur license, or a PDKB permit. |
| 30% reduction of Article 25 Income Tax installments | – Business Classification Code (102 KLU codes); | – Addition of Business Classification Code (846 KLU codes); – The employer has been designated as a KITE Company; or – The employer has obtained a Bonded Zone Operator permit, a Bonded Zone Entrepreneur license, or a PDKB permit. |
PMK-44 became effective on 27 April 2020, and this incentive is valid from April to September 2020. With the issuance of PMK-44, the previous regulation, namely PMK-23 / PMK.03 / 2020, is revoked and declared invalid.