For all investment projects of PMA, the following facilities will be granted: a. Import DutiesRelief from import duty or tariffs: 5% or lower. b. Export Manufacturing Reimbursement (drawback) of import duty on the import of goods and materials needed to manufacture finished products for export. Exemption from VAT and sales tax on luxury goods for… Read More

The legal aspects to be considered when the investors set up investments: a. Foreign Direct Investment.Further referred to as Penanaman Modal Asing (“PMA”), is a foreign investment activity to conduct business in the territory of the Republic of Indonesia, which is made by a foreign investor, whether using foreign capital or in a form of… Read More

Attractions of investment in IndonesiaIndonesia can brag about its 2009 decent economic performance when most other countries around the world experienced severe contraction, and in spite of political turbulence that always comes with general elections, the nation can still take pride that it was by and large a peaceful democratic process. The government continues to… Read More

A permanent establishment is a non-resident tax subject treated as an Indonesianresident tax subject. A permanent establishment’s head office administrative cost is an allowable deduction for the purpose of calculating its taxable income. However, such cost should be comparable with the principal’s overall operations and evidenced by the principal’s audited consolidated financial report on its… Read More

‘Resident tax subject’ means any organization established or domiciled in Indonesia, and any permanent establishment of organizations not established or domiciled in Indonesia. ‘Organization’ means a limited-liability company, limited partnership, other form of company, state-owned corporation, regional-owned corporation regardless of name and form, partnership, firm [firma], association [kongsi], co-operative, foundation, or similar body, institute, pension… Read More

The Tax Service Office has the right, within the 10-year statute of limitation applying from the year 1995 onwards, to issue: · a tax assessment if, after an audit, it considers that the taxpayer has not self assessed the correct amount or if a tax return has not been filed within the stipulated period ;… Read More

Taxable income is computed by first adding together all proceeds or value derived from various sources of income, a sum which is called gross income. ‘Gross income’, less allowable ‘deductions’ (i.e. the cost of obtaining, collecting, and conserving gross proceeds and expenses burdening that income), equals net income or ‘taxable income’. Losses may generally be… Read More

GENERAL PRINCIPLES The taxation principles in Indonesia are set out by the Constitution of the Republic of Indonesia of 1945. Article 23(2) of the Constitution stipulates that every tax needed by the state must be arranged through the law. Consequently, no tax can be imposed except through law. The constitution embodies the principle that taxes… Read More