Page 2 - Newsletter (Expansion of Types of Taxpayers Affected by COVID-19 who Receive Tax Incentive)

DDTC Newsletter Vol.03 | No.10 I May 2020 Page 2 of 11

Expansion of Types of Taxpayers Affected by COVID-19 who
Receive Tax Incentive

Expansion of Taxpayers Affected by One of the most important additions to this regulation is
COVID-19 that Receive Tax Incentives the provision of incentives specifically aimed at micro,
small and medium enterprises (MSMEs) or taxpayers
The government has officially expanded the taxpayers with certain gross turnover as per the Government
affected by the corona virus disease (COVID-19) Regulation No. 23 of 2018 concerning Income Taxes on
pandemic that may receive tax incentives. The Business Income Received or Obtained by Taxpayers
incentive recipients have been expanded due to the with Certain Gross Turnover (Gov. Reg. 23/2018).
government’s concerns over current developments
These new incentives are provided in the form of final
and economic conditions. Further, the impact of the
Income Tax borne by the government for the April
COVID-19 pandemic has spread to other sectors,
2020 Tax Period up to the September 2020 Tax Period.
including small and medium businesses.
MSME players, thus, do not need to bear the final
The provisions on the expansion of incentive Income Tax at a rate of 0.5% of the total gross turnover
recipients are outlined in Minister of Finance as per the currently applicable provisions.
Regulation No. 44/PMK.03/2020 concerning Tax
Taxpayers wishing to obtain the relief, however, must
Incentives for Taxpayers Affected by Corona Virus
submit a certificate to utilize the final Income Tax
Disease 2019 (COVID-19) Pandemic (MoF Reg.
borne by the government incentive. The regulation
44/2020). Promulgated and enacted on 27 April 2020,
defines the certificate as a letter issued by the Head
this regulation simultaneously revokes the Minister of
of the Tax Office on behalf of the Director General of
Finance Regulation No. 23/PMK.03/2020 concerning
Taxes outlining that the taxpayer concerned is subject
Tax Incentives for Taxpayers Affected by Corona Virus
to Income Tax based on Gov. Reg. 23/2018.
Pandemic (MoF Reg. 23/2020).
The obligation to submit the application letter also
Under the regulation, the government expands
applies to taxpayers that already have a certificate
the number of incentive recipients by increasing before this ministerial regulation takes effect.
the number of business classifications (Klasifikasi
Requests for certificates are to be submitted online to
Lapangan Usaha/KLU) that may propose incentives.
the Director General of Taxes through certain channels
In further detail, the number of taxpayers that may
on the webpage www.pajak.go.id.
submit Article 21 Income Tax borne by the government
(Ditanggung Pemerintah/DTP) incentive has risen to Similar to other incentives provided to address the
1,062 KLU from 440 KLU. impact of COVID-19, all taxpayers who utilize the final
Income Tax borne by the government incentive are to
In addition, the number of taxpayers’ business
submit a report on the realization of the final Income
classifications that may apply for the incentive of Article
Tax borne by the government through certain channels
22 Income Tax exemptions on imports and accelerated
on the webpage www.pajak.go.id. The realization
value added tax (VAT) refunds has increased from 102
report should be submitted using forms as per the
KLU to 431 KLU. In contrast, the number of taxpayers
examples in Appendix H of MoF Reg. 44/2020.
that may apply for the incentive of Article 25 Income
Tax installment deductions has increased to 846 KLU The realization report of the final Income Tax borne by
from 102 KLU. the government covers the total amount of Income Tax
payable for income received or earned by taxpayers,
The government has also expanded the taxpayer groups
including from transactions with withholders. This
that may benefit from these incentives. Formerly,
report will also serve as the basis for the granting of
taxpayers that could benefit from these incentives
final Income Tax borne by the government incentive.
are those with KLU codes listed in Appendix A and
designated as Import Facility for Export (Kemudahan On a side note, for the final Income Tax that has
Impor untuk Tujuan Ekspor/KITE) Companies. been settled through a withholding system, the tax
withholders are to prepare Tax Payment Slips (Surat
For the time being, however, taxpayers that have
obtained a Bonded Zone Operator (Penyelenggara Setoran Pajak/SSP) or print a billing code affixed
with the stamp or the inscription “FINAL INCOME
Kawasan Berikat) permit, Bonded Zone Companies
TAX BORNE BY THE GOVERNMENT EXPORTS AS
(Pengusaha Kawasan Berikat) permit, or Bonded
PER MoF REG. NUMBER 44/PMK.03/2020”. Further,
Zone Companies that are also Bonded Zone Operators
the realization report on the final Income Tax borne
(Penyelenggara di Kawasan Berikat/PDKB) permit
by the government must be attached with the Tax
may also apply for the incentives outlined in MoF Reg.
44/2020.