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Indonesia: Revised rules, corporate tax holiday

Indonesia: Revised rules, corporate tax holiday

The Ministry of Finance issued a regulation (No. 150/PMK.010/2018) that amends the “corporate tax holiday” rules that are available to encourage investment in Indonesia.

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The new regulation lowers the minimum investment threshold for “pioneer industries” from IDR 500 billion to IDR 100 billion (approximately U.S. $7.08 million).

  • For an investment valued between IDR 100 billion and IDR 500 billion, a company receives a 50% income tax reduction for the first five fiscal years, and a 25% income tax reduction for the following two fiscal years.
  • The tax holiday benefit for investments of IDR 500 billion and above remains the same. Read TaxNewsFlash

The new regulation also adds two new industries to the list of pioneer industries (generally, electrical equipment, certain machinery, motor vehicles, vessels, trains, aircraft) eligible for the tax holiday:

  • Agricultural, plantation or forestry-based processing that produces pulp
  • Digital economy, which includes data processing, hosting and related activities

There is also a new system for processing tax holiday applications.

Taxpayers that have been granted the tax holiday based on the prior regulation can continue to enjoy the tax holiday benefits until the tax holiday expires.


Read an April 2019 report [PDF 1.4 MB] prepared by the KPMG member firm in Indonesia

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