Page 2 - Newsletter(Additional Covid-19 Related Tax Incentives and Technical Guidelines for the Appointment of E-Commerce VAT Withholders)

DDTC Newsletter Vol.04 | No.05 I September 2020 Page 2 of 13

Additional Covid-19-Related Tax Incentives and Technical
Guidelines for the Appointment of E-Commerce VAT Withholders

Addition of Article 25 Income Tax water in a service area/tertiary plot or village and is
Installment Discounts and Income Tax democratically established by water-using farmers,
Incentives for Construction Services including local irrigation management institutions.

Next, the Federation of Water User Farmer Associations
The government has increased the amount of Article (Gabungan Perkumpulan Petani Pemakai Air/GP3A)
25 Income Tax installment reduction for taxpayers in is an institution consisting of a number of P3A that
certain sectors that are affected by the Corona Virus agree to work together to utilize irrigation water and
Disease 2019 (Covid-19) pandemic. Moreover, the irrigation networks in secondary block service areas,
government has added a new type of incentive for a combination of several secondary blocks, or one
taxpayers affected by Covid-19, i.e. final Income Tax irrigation area.
Borne by the Government (Ditanggung Pemerintah/
DTP) for certain construction services. Conversely, the Water User Farmer Central Association
(Induk Perkumpulan Petani Pemakai Air/IP3A) refers
The increase in the amount of the Income Tax Article to an institution consisting of a number of GP3A that
25 installment reduction and the addition of the types agree to work together to utilize irrigation water
of incentives are outlined in the Minister of Finance and irrigation networks in the primary block service
Regulation No. 110/PMK.03/2020 concerning area, a combination of several primary blocks, or one
Amendments to the Minister of Finance Regulation irrigation area.
No. 86/PMK.03/2020 concerning Tax Incentives for
Taxpayers Affected by the Corona Virus Disease 2019
Pandemic (MoF Reg. 110/2020).
DGT Releases the Implementing
Regulation of MoF Reg. 110/2020
Under the regulation that took effect on 14 August
2020, the government increases the amount of Income
Tax Article 25 installment reduction from 30% to 50% The Director General of Taxes has issued Circular
of the installment payable amount. No. SE-47/PJ/2020 concerning Guidelines for
Implementation of Minister of Finance Regulation
Similar to the former regulation, the Income Tax
No. 86/PMK.03/2020 concerning Tax Incentives for
article 25 installment reduction incentive applies to
Taxpayers Affected by the Corona Virus Disease 2019
taxpayers engaged in 1,013 certain business fields,
Pandemic as amended by the Minister of Finance
companies that obtain import facilities for export
Regulation No. 110/PMK.03/2020 (SE-47/PJ/2020).
purposes, as well as companies in bonded zones.
This circular has been released in connection with the
On another note, a new incentive in the form of final
promulgation of the Minister of Finance Regulation No.
Income Tax DTP for certain construction services
110/PMK.03/2020 concerning Amendments to the
is aimed at taxpayers that receive the Acceleration
Program for Irrigation Water Use (Program Percepatan Minister of Finance Regulation No. 86/PMK.03/2020
Peningkatan Tata Guna Air Irigasi/P3-TGAI). concerning Tax Incentives for Taxpayers Affected by
the 2019 Corona Virus Disease Pandemic (MoF Reg.
Taxpayers that receive P3-TGAI refer to P3A, GP3A,
110/2020).
and/or IP3A that carry out P3-TGAI as stipulated by
the Commitment-Making Officer (Pejabat Pembuat MoF Reg. 110/2020 stipulates the provisions on
Komitmen/PPK) and legalized by the Head of the the additional reduction of Article 25 Income Tax
Major River Basin Organization (Balai Besar Wilayah installments. Taking effect since 14 August 2020, this
Sungai/BBWS) or River Basin Organization (Balai MoF Reg. also adds a new type of incentive, i.e. the final
Income Tax borne by the government (Ditanggung
Wilayah Sungai/BWS) of the Ministry of Public Works
and Public Housing. Pemerintah/DTP) on certain construction service
income.
In further detail, P3-TGAI refers to a program of
repairing, rehabilitating, or improving irrigation In further detail, 12 scopes are stipulated under SE-
networks based on the participation of farming 47/2020. First, the definitions. Second, the procedures
communities implemented by P3A, GP3A, and/or for the granting of Article 21 Income Tax DTP
IP3A. incentives. Third, the procedures for the granting of
Water User Farmer Association (Perkumpulan Petani final Income Tax DTP incentives for taxpayers with
certain business turnover as per Gov. Reg. 23/2018.
Pemakai Air/P3A) refers to an irrigation management
institution that serves as a forum for farmers using