On 29 March 2018, the Indonesian Ministry of Finance announced regulation 35/PMK.010/2018 amending for the second time this year (cf. related state acts) the investment-related income tax reduction.



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Inception date: 04 Apr 2018 | Removal date: open ended

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.


The regulation was revoked by regulation 150/PMK.010/2018 later during the year (see Related State Acts). However, as the underlying expansion of tax reductions remained in force, this intervention is still classified as implemented.