Tax Incentives For Taxpayers Affected By Covid-19 Outbreak
- August 10, 2020
- Posted by: Administrator
- Category: Tax News
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On July 16, 2020, the Government of Indonesia, through the Minister of Finance (MoF), issued regulation No. 86/PMK.03/2020 (“PMK-86”) regarding Tax Incentives for Taxpayers Affected by the Covid-19 Outbreak as a renewal of the previous regulation No. 44/PMK.03/2020 (“PMK-44”).
Key notes regarding PMK-86 are as follows:
- Earlier tax incentives issued under PMK-23 and PMK-44 are extended until December 2020.
- Incentives to be provided on Article 21 Income Tax, Final Income Tax for MSMEs, Article 22 Income Tax on Imports, Article 25 Income Tax installments, and VAT.
- Income tax incentives will be provided for taxpayers that meet the criteria set under PMK-86.
- Preliminary VAT refund can be granted for April to December 2020 VAT returns with a limit of IDR 5 billion.
- The deadline for the tax incentive realization report is the 20th of the following month after the tax period ends.
- This new regulation extends the granting of incentive facilities for Income Tax until December 2020, and for VAT the tax period for preliminary returns is extended until FY December 2020. Previously, the granting of said tax incentives was only extended until September 2020.
- Article 21 Income Tax incentive is given to employees with certain criteria. The employer must submit a notification to enjoy the incentive of Article Income Tax borne by the Government (DTP). The Employer must also submit a report on the realization of this incentive no later than the 20th of the following month.
- Taxpayers who have certain gross revenue are subject to Final income tax of 0.5% from gross revenue. This final income tax is borne by the government. The taxpayer must provide a certificate of exemption to its transaction counterparties. The taxpayer is obliged to submit a realization report of all the income tax payable and later the incentive will be given based on the realization report submitted.
- Taxpayers who meet the criteria will be exempted from collection of Article 22 Income Tax. Such exemption is given through a Certificate of Exemption from Collection of Article 22 Income Tax on imports by submitting an application through the DGT website. Taxpayers are also required to submit realization reports no later than the 20th of the following month after the tax period ends.
- Taxpayers who meet the stipulated criteria can use the incentive of reduction of Article 25 Income Tax installments by 30% of the Tax Payable. The Taxpayer shall submit an application to the Tax Office through the DGT website and is obliged to report the realization no later than the 20th of the following month after the Tax Period ends.
PMK-86 became effective on July 16, 2020, and these incentives are valid from April to December 2020. With the issuance of PMK-86, the previous regulation, namely PMK-44/PMK.03/2020, is revoked and declared null and void.