Page 6 - Newsletter (The Terms of Service of The DGT and Tax Court Temporary Suspension in Response to COVID-19)

DDTC Newsletter Vol.03 | No.06 I March 2020 Page 6 of 8

The Terms of Service of The DGT and Tax Court

Temporary Suspension in Response to COVID-19

Implementing Regulation for The investment allowance regulation stipulates that
Investment Allowance in Labour- investments in labour-intensive industry are entitled to
incentives in the form of net income reduction of 60% of
intensive Industry the total investments in the form of tangible fixed assets,
including land used for main business activities. The
The government has issued a regulation relating to net
incentives are provided within 6 years starting from the
income reduction facilities for the labour-intensive
tax year upon the commencement of commercial at 10%
sector. The policy is outlined in Minister of Finance
per year.
Regulation Number 16/PMK.010/2020 concerning the
Provision of Net Income Reduction Facility for New A labour-intensive industry is entitled to this tax facility
Investments or Business Expansion in Certain Business if three conditions are met. First, it is a resident corporate
Fields that are Labour-Intensive Industries (MoF Reg. taxpayer. Second, conducting Main Business Activities
No. 16/2020) promulgated on 9 March 2020. This (Kegiatan Usaha Utama/KUU) in accordance with 45
regulation is the implementing regulation of Government labour-intensive industrial sectors in the attachment of
Regulation No. 45 of 2019. MoF Reg. No. 16/2020. Third, employing an average of
300 Indonesian workers within one tax year.

Table 2 - Labor-intensive Industrial Sectors Entitled to Investment Allowance Facilities

Sectors that are Entitled to Investment Allowance Facility Under MoF Reg. no. 16/2020

1 Ground meat and surimi industry. 16 Clothing from leather industry. 31 Nails, nuts, and bolts industry.

2 Canned fish and aquatic biota (non 17 Knitted apparel industry. 32 Computer equipment industry.
shrimp) processing and preservation
industry.
18 Leather tanning industry. 33 Television and/or television assembly
3 Canned shrimp processing and industry.
preservation industry.
19 Goods from leather and artificial leather 34 Audio and video recording, receiver, and
4 Other frozen aquatic biota industry. for personal use industry. multiplier equipment industry, not the
television industry.
20 Goods from leather and artificial leather
35 Other electronic audio and video
5 Processing and preservation industry for engineering/industrial purposes
equipment industry.
for other aquatic biota. industry.
6 Canned fruit and vegetable processing 21 Footwear for daily use industry. 36 Transformator, rectifier, and voltage
stabilizer industry.
and preservation industry.
22 Sports shoes industry. 37 Electricity control and distribution
7 Fresh milk and cream processing
industry. equipment industry.
23 Paper and board wave paper industry. 38 Household electrical equipment
8 Cereal food industry.
industry.
24 Packaging and boxes from paper and 39 Stove industry.
9 Bread and cake products industry.
cardboard manufacturing industry.
25 Tissue paper industry. 40 Other pumps, compressors, faucets, and
10 Food from chocolate and confectionery
valves industry.
industry.
26 Other goods from rubber industry that 41 Agriculture and forestry machinery
11 Coffee processing industry.
cannot be classified elsewhere. industry.
27 Plastic goods for buildings 42 Wooden furniture industry.
12 Coconut products industry.
manufacturing industry.
28 Other non-metallic mining and 43 Rattan and/or bamboo furniture
13 Yarn spinning industry.
quarrying industry that cannot be industry.
classified elsewhere.
14 Batik industry. 29 Metal tableware industry. 44 Jewelry from precious metals for
personal use industry.
15 Clothing from textiles industry. 30 Nails, nuts, and bolts industry. 45 Children’s toys industry.

Source: MoF Reg. No. 16/2020.