Companies engaged in upstream oil and gas and geothermal industries typically have to calculate CIT in accordance with their production sharing contracts (PSCs). Certain companies engaged in metal, mineral and coal mining are governed by a contract of work (CoW) for the CIT calculation. Different provisions may apply to them pertaining to corporate tax rates,… Read More
Non Taxable Income
Non-Taxable Income (applies to corporate and individual taxpayers) The law specifies a number of categories of income that are exempted from tax. These are: · Aid, donations, zakat, religious donations or gifts received, provided there is no business, work, or ownership relationship between the parties concerned; · Inheritances; · Dividends received by… Read More
Indirect sale of Indonesian Shares Involving Special Purpose Company
The sales of shares of a conduit company (SPC) owning Indonesian shares located in a tax haven country by a non- Indonesian tax resident can be deemed as a sale of shares of Indonesian party by the non-Indonesian tax resident so long as there is a special relationship between the SPC and the Indonesian party.… Read More
Foreign Loan
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… Read More
Corporate Tax Facilities
Companies investing in certain business sectors and/ or in certain less developed regions having high priority on a national scale can be granted tax facilities in the form of: · Additional net income reduction, up to a maximum of 30% of the amount of investment; · Accelerated depreciation and amortization; · The period of loss… Read More
Business Profits
Taxable business profits are calculated on the basis of normal accounting principles as modified by certain tax adjustments. Generally, a deduction is allowed for all expenditures incurred to obtain, collect, and maintain taxable business profits. A timing difference may arise if an expenditure recorded as an expense for accounting can not be immediately claimed as… Read More
INDONESIAN TAX 