Latest update on the Covid-19 Fiscal Incentives.

After speaking to the media about the Government’s plan to increase the discount on Art. 25 income tax incentive from 30% to 50%, on 14 August, the Minister of Finance has finally issued the Minister of Finance Regulation No. 110/PMK.03/2020 (MoF-110) which supersedes 86/PMK.03/2020 (MoF-86) as the most recent update and regulation on the fiscal incentives provided to taxpayers in relation with Covid-19.

The two major updates on this MoF-110 are:

  1. One Additional Fiscal Incentive
    Based on MoF-110, the Government will bear the final income tax for construction services in relation with “Program Percepatan Peningkatan Tata Guna Air Irigasi/P3-TGAI”. Under this regulation, P3-TGAI is described as a program to repair, rehabilitate or improve irrigation system based on the participation of farmer communities carried out by designated groups of farmers. This incentive is provided starting from August 2020 period until December 2020 period, and the taxpayer enjoying this incentive will be required to submit the monthly realization report at the latest by the 20th of the following month.
  2. Increment on the Art. 25 income tax discount from 30% to 50%
    The 50% discount is applicable from July 2020 period for taxpayers who has submitted the notification to use this incentive prior to the issuance of this MoF-110 or since the period in which the taxpayer submit the notification, for taxpayer who submit the notification after the issuance of this MoF-110. Similar with MoF-86, this 50% discount is also applicable until December 2020 period.

Please refer to the appendix of the attached regulation for complete business classification code entitled for the fiscal incentives.

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Latest update on the Covid-19 Fiscal Incentives
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