Page 5 - Newsletter (Update on New Tax Holiday Regime in Indonesia)

DDTC Tax Newsletter 03 I Apr 2018 Page 5 of 5

Revocation of Tax Holiday Privilege If any of these cases occur, the sanctions will be as
much as the value of Tax Holiday facility that has been
After the approval of Tax Holiday, the facility granted untilized along with penalties. Specifically, for the
to the taxpayer can be revoked should one or more of revocation, when the realisation value of investment plan
following conditions occur: which is below IDR500 Billion but the realisation of the
a. realisation value of the investment plan at the main business activity is consistent with the plan, the
commencement of commercial production is below government will then offer another kind of tax facility for
IDR 500 Billion; the taxpayer with applied terms and conditions.
b. realisation and the initial main business activity plan
are not compatible based on the field inspection; To conclude, as the previous regulation did not
c. taxpayer import or buy second-hand capital goods significantly benefit many business sectors, the new
which are subject to the reduction of CIT, unless they formula of Tax Holiday regime provides more certainty.
are fully relocated as a complete package of new Not only does it provide legal certainty, this regime also
investment from other countries and the goods are not simplifies the procedures and facilitates investment to
locally produced, and/or based on the government’s boost real economic growth.
instruction to implement national strategic projects;
d. real main business activity is not in line with the
registered main business activity plan
e. there is transfer of assets or ownership change during
the concession period, except if the new asset is more
productive and does not lessen the investment value;
f. the new capital investment is relocated to another
country(ies).

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AUTHORS: DDTC
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B. Bawono Kristiaji, S.E., M.S.E., M.Sc., ADIT Jl Bulevar Kelapa Gading LA3 No.1
Partner, Research and Training Services at DDTC Summarecon, Kelapa Gading, Jakarta Utara 14240 - Indonesia
contact: [email protected] Phone: + 62 21 2938 5758 I Fax: + 62 21 2938 5759

The authors would like to thank Darussalam (Managing
Denny Vissaro, S.E., M.S.E., M.A. Partner at DDTC), Danny Septriadi (Senior Partner at DDTC)
Fiscal Economist, Research and Training Services for their valuable input, insight and constructive discussions.
at DDTC
Contact: [email protected]
The information herein is for general purposes only and is not intended to address the
circumstances of any particular individual or entity. This content should not be used as
Dea Yustisia , S.E. reference for consultation with professional advisors.
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