Incentives for Investment

Incentives Policy

Incentives for Investment

Super Deduction Tax

Government Regulation No. 45/2019

Labour Intensive industry

60%
  • Domestic taxpayers who open a new business or expand their existing businesses in labor intensive sectors could enjoy a net income tax deduction of 60% of the capital they invested as fixed assets

Vocational Training Program

200%
  • Domestic taxpayers who conduct working program, interships and or educational activities to develop human resources based on certain competency could obtain a gross income tax deduction as high as 200 percent of the funds they had spend for the activities

Research
& Development

300%
  • Domestic taxpayers who conduct R&D in Indonesia could obtain a gross income tax deduction as high as 300 percent of the cost of their R&D activities

Tax Holiday

(MoF Regulation No.150/PMK.010/2018)

5-20 years tax exemption*

With another 50% tax exemption for additional 2 years (transitional period).
*) Based on value of investment threshold.

18 eligible pioneer industries

US$ 38 million

Minimal investment value (IDR 500 billion).
1 US$ = IDR 14,200

Mini Tax Holiday

(MoF Regulation No.150/PMK.010/2018)

5 years tax reduction

With another 50% tax exemption for additional 2 years (transitional period).

18 eligible pioneer industries​

US$ 7.6 million

Minimal investment value (IDR 100 billion).
1 US$ = IDR 14,200

Tax Allowance

(Government Regulation No.78/2019)

30% of the investment value in the form of tangible fixed assets

Reduction of corporate net income tax for 6 years, 5% each year

Including:

183

business fields eligible for tax allowance, expanded from 145 segments in the previous regulation

Under certain requirements among others: investment value or export orientation, manpower absorption, local content, and project  location (especially outside Java island).

Import Duty Facility

(MoF Regulation No.176/PMK.011/2009 juncto No. 188/PMK.010/2015)

Free import duty

  • Machinery/equipment
  • Raw materials for production

Period

  • 2 years import duty exemption or;
  • 4 years for companies using locally produced machines/equipment (min. 30%)

Given that the machines/equipment/materials:

  • Not produced in Indonesia
  • Have been produced in Indonesia, but have not met the requirement specification
  • Have been produced in Indonesia but the numbers are not enough

For any industries which produce goods; and for service industries, including: