IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 04 Apr 2018 | Removal date: open ended
Still in force

Tax or social insurance relief

Regulation 35/2018 by the Ministry of Finance further expands the income tax reductions offered to new investments in Indonesia (cf. related state acts).

Compared to previous regulations, it provides two additional years of a 50% corporate income tax reduction after the initial reduction period has ceased (art. 2(4) of the regulation).

The regulation also expands the number of pioneering industries eligible for tax reductions (art.3(2)). These include the basic inorganic chemical, pharmaceutical raw material and the semiconductor manufacturing industries.

Lastly, the tax reduction application process has been largely simplified. A decision on the application must now be finalised within five business days (art. 6(2)). Furthermore, the application no longer needs to be submitted before the investment is undertaken but instead may be submitted within the investment's first year (art. 4(1)b).

The regulation came into force on 4 April 2018.

The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

016 Stimulant, spice & aromatic crops
019 Forage; natural rubber; living plants; raw vegetable materials
021 Live animals
029 Other animal products
031 Wood in the rough
032 Non-wood forest products
041 Fish, live, not for human consumption
042 Fish live, fresh or chilled for human consumption
043 Crustaceans, live, fresh or chilled
044 Molluscs live, fresh or chilled
120 Crude petroleum & natural gas
172 Coal gas, water gas, producer gas & similar gases (excl. fuels)
212 Prepared & preserved fish, crustaceans, molluscs
221 Processed liquid milk, cream & whey
222 Other dairy products
236 Cocoa, chocolate & sugar confectionery
239 Food products n.e.c.
261 Natural textile fibres prepared for spinning
262 Man-made textile staple fibres processed for spinning
263 Textile yarn & thread of natural fibres
264 Textile yarn & thread of man-made filaments or staple fibres
265 Woven fabrics of natural non-cotton fibres
266 Woven fabrics (except special fabrics) of cotton
267 Woven fabrics of man-made filaments & staple fibres
268 Special fabrics
271 Made-up textile articles
272 Carpets & other textile floor coverings
273 Twine, cordage, ropes & cables; articles thereof
279 Textiles n.e.c.
281 Knitted or crocheted fabrics
282 Wearing apparel, except fur apparel
291 Tanned or dressed leather; composition leather
292 Luggage & handbags; saddlery & harness; other leather articles
293 Footwear other than sports footwear
294 Sports footwear, except skating boots
295 Other footwear
296 Parts of footwear
311 Wood, sawn or chipped lengthwise, sliced or peeled, of a thickness exceeding 6 mm; railway or tramway sleepers (cross-ties) of wood, not impregnated
313 Wood, rough or treated; railway sleepers; poles
319 Other products of wood, cork or straw
321 Pulp, paper & paperboard
327 Registers, notebooks, diaries & similar articles
332 Tar distilled from coal, lignite or peat; other mineral tars
333 Petroleum oils & oils of bituminous materials, other than crude
334 Petroleum gases & other gaseous hydrocarbons, except natural gas
335 Petroleum jelly, coke or bitumen; paraffin wax & similar products
336 Radioactive elements or residues & prodcuts containing them
337 Fuel elements (cartridges), for or of nuclear reactors
341 Basic organic chemicals
342 Basic inorganic chemicals n.e.c.
343 Tanning or dyeing extracts; tannins; colouring matter n.e.c.
345 Miscellaneous basic chemical products
346 Fertilizers & pesticides
347 Plastics in primary forms
348 Synthetic rubber & mixtures thereof in primary forms
352 Pharmaceutical products
384 Sports goods
389 Other manufactured articles n.e.c.
411 Basic iron & steel
471 Electronic valves & tubes; electronic components; parts

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