Global Tax Alert | 30 September 2013

Indonesia provides temporary tax payment relief

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As part of the economic policy package, Indonesia’s Minister of Finance issued a new regulation1 providing a temporary cash flow relief and to maintain liquidity of certain taxpayers for the sake of stability of the macro economy, encouraging economic growth, improving the competitive advantage of the domestic industries, and creating employment. Taxpayers qualifying for this tax relief are corporations in the following industries:

  • Textile industry
  • Ready-to-wear clothes industry
  • Footwear industry
  • Furniture industry
  • Children’s toys industry

A recommendation from the respective Minister is needed to apply for the relief. Taxpayers seeking to obtain the relief must first submit an application to the Head of the Tax Office where they are registered.

The relief is in the form of: (i) reduction of monthly estimated tax payments for the tax period of September 2013 until December 2013 based on a reduction of the actual August estimated tax payment by the maximum percentage limit noted below, and/or (ii) postponement of the payment of the annual corporate income tax for Fiscal Year 2013. The maximum limits for reduction of the estimated monthly tax installment are set as follows:

  • 25% of the installment of the tax period August 2013 for eligible taxpayers which are not export-oriented; or
  • 50% of the installment of the tax period August 2013 for eligible taxpayers which are export-oriented.

The maximum postponement of payment for the annual corporate income tax is three months from the prescribed deadline based on the taxpayer’s book year-end. The Director General of Tax (DGT) will waive any late payment penalty resulting from the postponement of tax payments. This regulation entered into force on 27 August 2013.

Endnote

1. Minister of Finance Regulation No. 124/PMK.011/2013 dated 27 August 2013 and Directorate General of Taxes Regulation No. PER-30/PJ/2013 dated 11 September 2013.

For additional information with respect to this Alert, please contact the following:

Purwantono, Suherman & Surja Consult, Jakarta
  • Santoso Goentoro
    +62 21 5289 5584
    santoso.goentoro@id.ey.com
  • Ben Koesmoeljana
    +62 21 5289 5030
    ben.koesmoelijana@id.ey.com
  • Dodi Suryadarma
    +62 21 5289 5236
    dodi.suryadarma@id.ey.com
Ernst & Young LLP, Asia Pacific Business Group, New York
  • Chris Finnerty
    +1 212 773 7479
    chris.finnerty@ey.com
  • Jeff Hongo
    +1 212 773 6143
    jeff.hongo@ey.com
  • Kaz Parsch
    +1 212 773 7201
    kazuyo.parsch@ey.com
  • Bee-Khun Yap
    +1 212 773 1816
    bee-khun.yap@ey.com

EYG no. CM3835