Expiration of the Final Income Tax Regime of Government Regulation Number 23 of Year 2018 For Corporate Taxpayers

On 7 September 2020, the Directorate General of Taxes (“DGT”) issued an Announcement No. 10/PJ.09/2020 (“PENG-10”) concerning Expiration of the Final Income Tax Regime as stipulated in Government Regulation Number 23 of 2018 (“PP-23”) for Corporate Taxpayers.

This announcement sets a reminder for the Taxpayers regarding the implementation of PP-23, which shall expire within certain periods. The main points of PENG-10 are summarized as follows:

  1. The regime of PP-23 shall expire at the latest within:
    • 3 (three) Fiscal Years for Corporate Taxpayers in the form of Limited Liability Company (PT); and
    • 4 (four) Fiscal Years for Corporate Taxpayers in the form of Cooperative, Limited Partnership, or firm.
  2. In the event that the Taxpayer as referred to in number 1 was registered in the 2018 fiscal year, the final income tax regime of PP-23 is applicable until:
    1. the end of the 2020 fiscal year for a Corporate Taxpayer in the form of a Limited Liability Company (PT); and
    2. the end of the 2021 fiscal year for a Corporate Taxpayer in the form of a cooperative, Limited Partnership, or firm.
  3. When the period as referred to in number 2 ends, the Taxpayer shall fulfill its tax obligations in accordance with the general Income Tax regime for the following tax years.
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