To encourage national economic growth while maintaining business continuity in the retail trade sector during the Corona Virus Disease 2019 (COVID-19) pandemic, the Government offers incentives in the form of VAT borne by the Government for the rental of space or buildings by retail merchant tenants. This is governed by the issuance of Minister of Finance Regulation No. PMK 102/PMK.010/20201 (“PMK-102”).

The retail merchant tenants that can enjoy this incentive are entrepreneurs who deliver goods or services to end customers as part of their retail business. The VAT borne by the Government is applicable for rental charges for the period August 2021 to October 2021 which are billed from August 2021 until November 2021.

In order to enjoy this incentive, the VATable firm landlord must provide a VAT invoice with certain requirements and prepare a realization report on the VAT borne by the Government. Otherwise, the VATable firm landlord will not be eligible to enjoy this incentive.