Updated Corporate Tax Holiday Regulation: Exciting New Opportunities for Income Tax Reduction Facilities!
- November 14, 2024
- Posted by: Administrator
- Category: Tax Updates

The Ministry of Finance (MoF) of Indonesia has introduced Regulation No. 69/2024 (PMK-69), which amends MoF Regulation No. 130/PMK.010/2020, specifically targeting the provision of corporate income tax reduction facilities, commonly referred to as the tax holiday. This updated regulation is part of Indonesia’s broader efforts to improve the investment climate and encourage both domestic and international companies to invest in the country, with a particular focus on fostering job creation and promoting technological advancements.
Under PMK-69, companies with an investment value exceeding IDR 500 billion are now eligible for a tax reduction of up to 100% for a period of five to 20 years. This represents a significant tax incentive for large-scale investors who contribute to the Indonesian economy. The revised regulation seeks to attract major foreign direct investments (FDI) and enhance the country’s overall economic growth. However, companies making investments below the IDR 500 billion threshold will still receive tax reductions, albeit at a lower rate and over a shorter duration. This ensures that businesses of various sizes can benefit from the tax holiday, while also maintaining a focus on attracting substantial investments to the country.
The updated regulation also introduces a simplification of the application process, making it easier for businesses to access tax holiday benefits. Companies can now apply for these tax reductions through an online platform, specifically the OSS (Online Single Submission) system. This transition from offline to online submissions eliminates the administrative burden associated with traditional, paper-based processes, improving efficiency for both businesses and government authorities. By requiring digital uploads of all necessary documents, the regulation aims to streamline the entire process, reducing processing time and increasing transparency. This shift also aligns with Indonesia’s broader push for digitalization across various sectors of governance.
In addition to these benefits, PMK-69 introduces a new requirement for domestic taxpayers who directly own shares in other taxpayers. These entities must now obtain an automated fiscal certificate as part of their compliance with the regulation. This measure aims to enhance oversight and ensure that companies accessing tax facilities are meeting all the necessary fiscal obligations. The fiscal certificate serves as a mechanism for tracking and verifying the tax status of shareholders, ensuring that those involved in significant tax reductions are operating in full compliance with Indonesian tax laws.
Another important aspect of PMK-69 is the introduction of a new rule concerning multinational enterprises (MNEs). Multinational groups that benefit from tax facilities in Indonesia will now be required to comply with the OECD Global Minimum Tax (GMT) standard, which mandates a minimum tax rate of 15% on income. This rule is designed to prevent aggressive tax avoidance and ensure that multinational companies pay a fair share of taxes, even if they receive income tax relief or reductions under the tax holiday provisions. The application of this rule is particularly relevant for multinational corporations with global consolidated income exceeding EUR 750 million (or approximately USD 812 million), as defined by the OECD.
This new provision helps Indonesia align with international tax standards and ensures that foreign corporations contribute to the country’s tax base, even when they benefit from tax incentives. The rule applies not only to companies receiving tax facilities after the enactment of the regulation but also to those that had previously received such facilities. This ensures consistency and fairness in the application of tax rules across different tax periods.
For businesses and investors who are interested in taking advantage of the tax holiday benefits, proposals for corporate income tax reductions must be submitted to the Minister of Finance by December 31, 2025. This deadline gives businesses ample time to assess their eligibility and prepare their applications. The regulation became effective on October 9, 2024, and represents a significant shift in Indonesia’s tax landscape, particularly for large-scale investors.
Overall, PMK-69 serves as a key step toward improving Indonesia’s attractiveness as an investment destination by offering more favorable tax incentives, streamlining the application process, and ensuring compliance with international tax standards. With these changes, Indonesia hopes to stimulate economic growth, foster innovation, and create new job opportunities for its citizens.