TAX ALERT 01.2021 – PMK 9/PMK.03/2021 – INFORMATION ABOUT TAX INCENTIVES FOR TAXPAYERS AFFECTED BY COVID-19

As to navigate the continuous economic impact of the COVID-19 pandemic, the Indonesian Government deems it as necessary to extend the period of the tax incentives that were provided earlier during 2020. Therefore, the Minister of Finance issued PMK 9/PMK.03/2021 to extend the period of utilization of those tax incentives.

Please find attached our updated circular regarding Tax Incentives for Taxpayers affected by the plague of Coronavirus in accordance with the Ministry of Finance of The Republic of Indonesia Regulation No. PMK – 9/PMK.03/2021 (“PMK-9”) as the replacement of PMK 110/PMK.03/2020 (“PMK-110”) and PMK 86/PMK.03/2020 (“PMK-86”).

Some key points of changes from PMK-9 are as follows:

The tax incentives are now granted from January to June 2021;
There are additional Business Classifications (KLU) for several incentives below as previously stated in PMK 86:

- Exemption on Income Tax Art. 22 on Import is now given to 730 KLU’s, while previously was given only to 721 KLU’s;
- Income Tax Art. 25 reduction is now given to 1.018 KLU’s, while previously was given only to 1.013 KLU’s;
- Preliminary VAT Restitution is now given to 725 KLU’s, while previously was given only to 716 KLU’s.

Obligation to submit realization report must be performed on time by no later than the 20th of the following month in order to utilize the tax incentives.
Employers and Taxpayers who have submitted notification for:

- Utilization of Income Tax Art. 21 Borne by the Government;
- Reduction on Instalment of Income Tax Art. 25; and/or
- Application for tax exemption letter of Income Tax Art. 22 from Import

based on PMK-110, PMK-86, PMK 44/PMK.03/2020 (“PMK-44”), dan PMK 23/PMK.03/2020 (“PMK-23”), must submit a new notification and/or application in order to utilize the incentives provided under PMK-9. For the use of incentive from January 2021, specifically for Income Tax Art. 21 and Income Tax Art. 25, the deadline to submit the new notification and/or application is on February 15, 2021.

For these following criterion:

- Employers who have submitted notification of the utilization of Income Tax Art. 21 Borne by the Government;
- Taxpayers with certain gross turnover; and/or
- Tax Withholder on construction service transaction which tax is Borne by the Government

who have utilized the Income Tax incentive based on PMK-110, PMK-86, PMK-44, and/or PMK-23 and have not submitted a realization report, they can submit the report by no later than February 28, 2021 in order to be able to utilize the tax incentive for Fiscal Year 2020.

The summary regarding the requirements that must be fulfilled by Taxpayers as stipulated in this PMK-9 is provided in the attached Tax Alert 01.2021. For other details, please refer to Appendix PMK-9 (as attached).

Attachments :
SS – 2021 – PMK No. 9 Th 2021