Government projects funded with foreign loans or foreign grants may be eligible for special tax treatment for the income derived from that funding. The projects that qualify are typically set out in the state Project Table of Contents (Daftar Isian Proyek/DIP) or other similar document.
Main contractors, consultants and suppliers for foreign grant- funded or loan-funded government projects may have their income tax liability borne by the government. This facility is not available for second-level contractors, consultants and suppliers.
Aside from the above conditions, the main contractors, consultants and suppliers also enjoy the following tax facilities on the importation of goods and the use of foreign taxable services and/or foreign intangible goods for foreign grant-funded or foreign loan-funded government projects:

•    Exemption from import duty;
•    Non-collection of VAT and LST;
•    Non-collection of import income tax (Article 22).
In the event that the deliverables of a qualifying project are goods or services subject to VAT, the main contractors, consultants and suppliers are required to issue appropriate tax invoices although the VAT is not collected.
If a qualifying project is only partially funded by a foreign loan or a foreign grant, the tax facilities are determined proportionate to the amount of the foreign loan or foreign grant.