Page 2 - Newsletter (Latest Income Tax Facilities to Address Covid-19 and Guidelines for the DGT’s Tasks in the New Normal)

DDTC Newsletter Vol.03 | No.13 I June 2020 Page 2 of 6

Latest Income Tax Facilities to Address Covid-19 and
Guidelines for the DGT's Tasks in the New Normal

Income Tax Facilities to Address The report must be submitted upon the filing of
Covid-19 annual income tax returns of the relevant tax year at
the latest. In the event that taxpayers do not submit
The government has issued a policy on income tax to reports within this period, an additional reduction in
address the ongoing pandemic. This policy is outlined net income of 30% cannot be charged by the taxpayer.
in Government Regulation No. 29 of 2020 concerning This incentive is given up to 30 September 2020.
Income Tax Facilities to Address the Corona Virus
Second, donations that may be deducted from net
Disease 2019 (Covid-19) (PP 29/2020). This
income. Donations to address Covid-19 in Indonesia
regulation has been issued in response to the impact
that are submitted by taxpayers to donation
of Covid-19 spread in Indonesia on health and safety,
organizations: National Disaster Management
as well as on business sectors. Promulgated on 10 June
Authority (Badan Nasional Penanggulangan Bencana/
2020, this policy has taken effect thereafter.
BNPB), Regional Disaster Management Authority
Income tax facilities under this government regulation (Badan Penanggulangan Bencana Daerah/BPBD),
include five areas. First, an additional reduction in ministries that carry out governmental affairs in the
net income. Resident taxpayers that produce medical health sector, ministries that carry out government
devices and/or household health supplies (Perbekalan affairs in the social sector, or charitable institutions.
Kesehatan Rumah Tangga/PKRT) to handle Covid-19
These donations can be deducted from gross income
are entitled to an additional reduction in net income
under two conditions, i.e. supported by the receipt
by 30% of the costs incurred.
of donations and received by charitable institutions
The additional reduction in net income is calculated that have Taxpayer Identification Numbers (TIN).
from the production costs of medical devices and/or Deductible donations include those donated up to 30
PKRT required to address Covid-19 incurred until 30 September 2020.
September 2020. All additional reductions are charged
The abovementioned receipt of donations must at least
in the tax year when the production costs of medical
contain the following information: name, address, and
devices are incurred. In the event that there are shared
the TIN of the donor; the name, address, and TIN of
costs for taxpayers that cannot be separated in the
the charitable institution; date of donation; form of
calculation of the taxable income amount, the burden
donation; and value of donations. Donations which may
is allocated proportionally.
be deducted from gross income amount to the value of
Medical devices and/or PKRT are medical devices the actual donations incurred. Donations to address
and/or PKRT stipulated by statutory provisions in Covid-19 that have been deducted as a reduction in
the health sector. These medical devices include: gross income under Government Regulation No. 93 of
N95 surgical masks and respirators; body protection 2010, however, cannot be deducted as a reduction in
in the form of medical coveralls, medical disposable gross income under this regulation.
gowns, heavy-duty aprons, caps, shoe covers, goggles,
In this regard, donations may be given in the form of
face shields, and waterproof boots; surgical gloves;
money, goods, services, and/or utilization of assets
examination gloves; ventilators; and diagnostic test
without compensation. The value of donations in the
reagents for Covid-19. PKRT, however, may include
form of goods is determined based on acquisition
antiseptic hand sanitizers and disinfectants.
value, fiscal book value, or cost of goods sold. Further,
In certain aspects, the minister of finance may change the value of donations in the form of services and/
the details of medical devices and PKRT based on or use of assets without compensation is determined
recommendations from the minister who carries out based on the cost of services sold and/or use of assets.
government affairs in the health sector. Taxpayers that
The donating taxpayer must submit a nominative list of
have taken advantage of the additional reduction in
donations upon the filing of annual income tax returns
net income must submit a report on the production
of the relevant tax year at the latest. The nominative
costs of the medical devices and/or PKRT to address
list is submitted online through the DGT system. If
Covid-19 to the Directorate General of Taxes (DGT).
the online system is not yet available, taxpayers may
Such a report is submitted online through the DGT submit the nominative list offline through the tax
system. If the online system is not yet available, office where the taxpayer is registered. In addition,
taxpayers may submit reports to DGT offline through the charitable institution must submit a report on the
the head of the tax office where the taxpayer is collection of donations.
registered. Examples of report formats are listed in
appendix A of PP 29/2020.