TAX ALERT 02.2023 – INCOME TAX TREATMENT OF BENEFITS IN KIND OBTAINED FROM EMPLOYMENT OR SERVICE ACTIVITIES

On June 27, 2023 the Government issued MoF Regulation No. 66 Year 2023 concerning Income Tax Treatment of Benefits-in-Kind Obtained from Employment or Service Activities.

This regulation came as implementing Government Regulation No. 55 Year2022.

Key points that need to be known regarding this regulation:

1. Benefits In Kind (“BIK”) are now taxable, and the related expenses are tax deductible as long as they are incurred to obtain, collect, and/or maintain income.
2. However, there are certain BIK that are exempted from income tax:

• • Foods and drinks provided for all employees.
  • BIK provided in Certain Areas (remote areas).
  • BIK that are required by law to be provided to employees to carry out theirwork
  • BIK sourced/funded by the State and/or Local Government Budgets
  • Certain types and/or limits of BIK.

This MoF Regulation is effective starting July 1, 2023.

Read more :
SS – 2023 – PMK 66 Tahun 2023 English
SS – 2023 – PMK 66 Tahun 2023 Ind

Attachments :
SS – 2023 – PMK 66 Tahun 2023