Page 2 - Newsletter (Fiscal Incentives for Electric Vehicles and Fiscal Policy Plan for the Year of 2020)

DDTC Newsletter Vol.02 | No.03 I August 2019 Page 2 of 6

Fiscal Incentives for Electric Vehicles and Fiscal Policy Plan for
the Year of 2020

KITE Facilities for SMEs materials for export purposes for a minimum of two
years. Secondly, the business entity should already have
The government updates regulations regarding the the export sales contracts for these kind of activities for a
Import Tax Waiver for Materials for Export Oriented maximum of two years.
Goods (Kemudahan Impor Tujuan Ekspor/KITE) for
small and medium enterprises (SMEs). This is regulated Furthermore, if all raw materials originate from other
through Minister of Finance Regulation Number 110/ places inside the customs area, there is also a requirement.
PMK.04/2019 (MoF Reg No. 110/2019) which amends In this condition, the business entity should have met the
the MoF Regulation No. 177/PMK.04/2016 (MoF Reg No. realization value of export at least 25% of annual sales
177/2016). results within the last two years.
KITE facilities provided in the regulation which was The next requirement is that the business entity is a
issued on 31 July 2019 are in the forms of the Exemption standalone-company and has the proof of ownership
of Import Duty combined with Non-Collected VAT or in or control of the location for production activities and
the forms of Non-Collected VAT and Sales Tax on Luxury storage which is valid for a minimum period of two years.
Goods (STLGs). These facilities are given for the imported Business entities must also be willing and able to utilize
goods and/or materials and/or machinery carried out the Centralized Customs Application System for the
by small and medium-sized industries for the export management of goods purchased and be responsible in
purposes. the event of abuse of the facilities provided.
Fiscal Incentives for Battery Electric
There are four types of business forms who can utilize
these incentives. First, small and medium enterprises. Vehicles
Second, a business entity formed by the merger of some
SMEs. Third, the appointment of a SME by several SMEs The provision of incentives is one of the aspects carried
as one center. Fourth, the Cooperatives which are defined out by the government in order to accelerate the program
as SMEs or KITE Consortium. of battery electric vehicle (Kendaraan Bermotor Listrik
Berbasis Battery/KBL) for road transportation. This is
The granter must be productively conduct economic
regulated through Presidential Regulation of the Republic
ventures or has the business activity of processing,
of Indonesia No. 55/2019 concerning the Acceleration
assemblying and/or installation in industry sector.
of the Battery Electric Vehicle for Road Transportation
Besides, it also has to fulfill at least one of the criteria of
(Presidential Regulation No. 55/2019).
1 2
business ownership as listed in Table 1 .
Basically, this program is carried out through five aspects
In addition to meeting the criteria for SMEs as above,
including the incentives of fiscal and non-fiscal. These
there are other requirements to obtain this facility. If the
aspects include accelerating the development of the
origins of raw material come from the outside of customs
domestic battery-based industry, providing incentives,
area, it must meet one of the following conditions.
providing electricity charging infrastructure and
First, the business entity has carried out the activity
regulating electricity aspect for battery electrical vehicle,
of processing, assemblying, and/or installation of raw
Table 1 Criteria for Determining Small and Medium Enterprises to Obtain KITE Facilities
No. Criteria Small enterprise Medium enterprise
1 Investment Value 1 A maximum of IDR1,000,000,000.00 IDR1,000,000,000.00 - IDR15,000,000,000.00
which does not include land and
building if they are located in one
location with the owner's residence
2 Net Worth Value 2 IDR50,000.000.00 - IDR500,000,000.00 IDR1,000,000,000.00 - IDR15,000,000,000.00
3 Annual sales IDR300,000,000.00- IDR2,500,000,000.00 IDR2,500,000,000.00 - IDR50,000,000,000.00

Source: MoF Reg No. 110/2019.

1 This represents the value of land, buildings, machine tools, facilities and
infrastructure, except working capital.
2 This represents the result of reducing the total value of business assets to the
total value of the business liabilities.