IKN Investors Can Get ‘Tax Free’ for 30 Years, Here’s How! News – 1 hour ago

Jakarta, CNBC Indonesia – The government provides a number of tax facilities to investors in the Indonesian Capital City (IKN). One of them is providing a tax holiday or tax exemption incentive for a certain period.

Director of Counseling, Services and Public Relations of the Directorate General of Taxes, Dwi Astuti, said that the tax holiday will be given to investors who invest capital in IKN of at least IDR 10 billion. Meanwhile, the maximum time limit for granting relief is a maximum of 30 years.

“Tax holiday with an investment limit of IDR 10 billion for a maximum period of 30 years,” said Dwi in a written statement, quoted Monday (4/11/2023).

Dwi said that tax relief was given to a number of sectors that met the requirements. These regulations, he said, were also adapted to IKN’s needs. “Several eligible sectors can be expanded according to the needs of IKN development and development,” he added.

In more detail, the rules regarding tax holidays are regulated in Government Regulation Number 12 of 2023 concerning Providing Business Licensing, Ease of Business and Investment Facilities for Business Actors in the Archipelago Capital City.

Paragraph 2 of the PP is explained in Paragraph 2 regarding Corporate Income Tax Reduction Facilities for Domestic Taxpayers. Article 28 explains the 3 sectors that can get this facility, namely infrastructure and public services; economic revival; and other business fields.

The infrastructure and public services sector includes power plants. construction and operation of toll roads, airports, health facilities and others.

Meanwhile, economic generation sectors that will receive a tax holiday include the construction and operation of shopping centers, aka malls; provision of tourist facilities and accommodation services or star hotels; meeting, incentive, convention and exhibition facilities; as well as providing gas stations or charging electric vehicle batteries.

Lastly, other business sectors that will receive tax holiday facilities are agricultural cultivation and urban fisheries; value added industry; hardware and software industry; trading services and so on.

Article 29 Paragraph (1) explains further that the corporate income tax deduction as intended in Article 28 paragraph (1) is given at lOO% of the amount of corporate income tax payable.

Article 29 also explains that the infrastructure and public services sectors can get a reduction in corporate income tax for 30 years if they start investing in the 2023-2030 period; for 25 tax years for capital investment in 2031-2035; and 20 tax years for capital investment 2036-2045.

Similar provisions apply to the economic generation business sector, namely 20 years for capital investment in 2023-2030; 15 years for capital investment 2031-2035; and 10 years for 2036-2045. Meanwhile, the tax reduction for other business fields is 10 years for capital investment in 2023-2030 and 10 years for investment in 2031-2045.

These tax holiday rules also apply to those who invest in the IKN Financial Center with a number of terms and conditions. Apart from that, tax holidays are also provided to foreign companies that are willing to move their head offices or regional offices to East Kalimantan.

Even though it is tempting, in this PP the government also regulates the revocation of the tax holiday if investors cannot fulfill the requirements, for example the realization of capital investment no later than 2 years after approval.

[Gambas:Video CNBC]

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