On August 30, 2021, the Government of the Republic of Indonesia issued Government Regulation Number 91 of 2021 (“GR-91”) concerning Income Tax on Income in the Form of Interest on Bonds Received or Obtained by Domestic Taxpayers and Permanent Establishments (PE). GR-91 was issued to replace GR Number 16 of 2009 as most recently amended by GR Number 55 of 2019.

The purpose of the issuance of GR-91 is to harmonize the policy of reducing the interest income tax rate on bonds received or obtained by foreign taxpayers, to create an equal income tax burden between bond investors, and to encourage the development and deepening of the local bond market.

GR-91 reduces the WHT rate on bond-related investment earned by resident taxpayers and PEs from 15% to 10%. If the bond-related interest is administered through Bank Indonesia’s Scripless Securities Settlement System, the final income tax is self-remitted by the income recipient.