Latest update on fiscal incentives provided to taxpayers in response to COVID-19.

On 16 July 2020, the government issued the Minister of Finance Regulation No. 86/PMK.03/2020 (MoF-86) to update the fiscal incentives provided to taxpayers in relation with the COVID-19 pandemic.

The type of incentives provided remain the same as the Minister of Finance Regulation No. 44/PMK.03/2020 (MoF-44). However, MoF-86 has further expanded the industry sectors entitled for these incentives and extended the incentives period to December 2020.

Other significant changes regulated under MoF-86 are as follows:

  1. Incentives for employee income tax – previously required separate applications by the head office and branch offices respectively. Under MoF-86, the application will now only need to be done by the head office, and the incentive shall be applicable for all branch offices.
  2. Incentives for corporate income tax for micro, small and medium enterprise (UMKM) – taxpayers will no longer be required to apply for the Statement Letter (Surat Keterangan) to enjoy this incentive. The taxpayer will now only be required to submit the realisation report.
  3. Under MoF-44, the realisation report for Art. 22 import tax and Art. 25 income tax prepayments incentives must be submitted on a quarterly basis. However, under MoF-86, the realisation report for these incentives will now have to be submitted monthly, starting from July 2020 up to December 2020. The deadline remains the same, which the latest is by the 20th of the following month.

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

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