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Indonesia: Proposal for reduced corporate tax rate, territorial tax system

Indonesia: Proposal for reduced corporate tax rate

The government reportedly is finalizing a draft of a tax omnibus bill, with the intention that the legislation would be presented to the Parliament for consideration in January 2020.


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According to information from the Ministry of Finance, the draft legislation would:

  • Decrease the corporate income tax rate in phases, initially from 25% to 22% and subsequently to 20%
  • Replace the current worldwide tax system for foreign individual tax residents to a territorial tax system so that these persons would no longer be subject to Indonesian income tax on their overseas income

Read a December 2019 report prepared by the KPMG member firm in Indonesia 

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