Inception date: 12 Aug 2019 | Removal date: open ended
Still in force

Local sourcing

Article 8 of the presidential regulation 55/2019 requires that in order to receive fiscal and non-fiscal incentives mentioned in this regulation (see other intervention within this state act), the electric vehicles produced in Indonesia need to fulfil a local content level of at least 35% for vehicles with four or more wheels and of at least 40% for vehicles with two or three wheels. The local content level will be raised until it reaches 80% in 2030 and 2026, respectively.

According to article 1(12) explains that the local content requirement shall be related to the production of goods and services within the territory of Indonesia. Furthermore, article 8(2) states that the exact procedure for the local content calculation will be further determined by the ministry in charge "by involving ministries / non-ministerial government agencies and/or relevant stakeholders." (own translation).

The regulation came into force on 12 August 2019. According to article 36 of the presidential regulation, the implementing regulations (introduced by the respective ministries to enforce the presidential regulation) must be introduced no later than one year after this regulation came into force.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 12 Aug 2019 | Removal date: open ended
Still in force

Tax or social insurance relief

Presidential regulation 55/2019 introduces fiscal and non-fiscal incentives to promote the electric vehicle industry in Indonesia.

According to article 17(3), the following type of entities may receive incentives:

  • "a. industrial companies, universities, and/or research and development institutions as referred to in Article 7 paragraph (1) conducting research, development and innovation activities technology related to the battery-based electric vehicle industry;
  • b. industrial companies that prioritize the use of prototypes and/or components sourced from industrial companies and/or research and development institutions that conduct research, development, and technological innovation activities related to the battery-based electric vehicle industry in the country;
  • c. industrial companies that meet local content requirements as referred to in Article 8 and which produce domestic battery-based electric vehicles as referred to in Article 9;
  • d. industrial companies producing components for battery-based electric vehicles as referred to in Article 10;
  • e. electric vehicle industry companies based on National Branded Batteries as referred to in Article 14;
  • f. companies that provide Electric Motorbike battery (Battery swap) rentals;
  • g. industrial companies that accelerate production and prepare facilities and infrastructure for the use of battery-based electric vehicles;
  • h. companies that manage battery waste;
  • i. companies providing electric charging stations and/or agencies or dwellings that use private electricity installations to charge battery-based electric vehicles;
  • j. public transport companies that use battery-based electric engines; and
  • k. individuals who use battery-based electric vehicles." (own translation)

Furthemore, article 19(1) lists the possible fiscal and non-fiscal incentives to the EV industry:

  • "a. import duty incentives for importing Battery-Based KBL in Completely Knock Down (CKD), Battery-Based KBL in Incompletely Knock Down / IKD, or major components for the number and certain period of time;
  • b. sales tax incentives for luxury goods;
  • c. incentives for central or regional tax exemption or reduction;
  • d. incentives of import duty on the importation of machinery, goods and materials in the context of investment;
  • e. suspension of import duties in the framework of export;
  • f. incentives for import duties borne by the government for the importation of raw materials and/or supporting materials used in the framework of the production process;
  • g. incentives for making electric battery charging station equipment,
  • (...)
  • i. fiscal incentives for research, development and technological innovation activities as well as vocational components of the Battery-Based KBL;
  • j. parking fees at locations determined by the Regional Government;
  • k. reduction of electricity charging fees at electric battery charging stations;
  • l. financial support for electric battery charging station infrastructure development;
  • m. professional competency certification for the human resource development related to battery-based electric vehicles; and
  • n. product certification and/or technical standards for the battery-based electric vehicle industrial company and the related component industry." (own translation)

The regulation came into force on 12 August 2019. According to article 36 of the presidential regulation, the implementing regulations (introduced by the respective ministries to enforce the presidential regulation) must be introduced no later than one year after this regulation came into force.

A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. The subsidy recipient produces internationally tradable goods. On this metric, the state aid proposed here is discriminatory.

Inception date: 12 Aug 2019 | Removal date: open ended
Still in force

Trade finance

Presidential regulation 55/2019 introduces fiscal and non-fiscal incentives to promote the electric vehicle industry in Indonesia.

According to article 17(3), the following type of entities may receive incentives:

  • "a. industrial companies, universities, and/or research and development institutions as referred to in Article 7 paragraph (1) conducting research, development and innovation activities technology related to the battery-based electric vehicle industry;
  • b. industrial companies that prioritize the use of prototypes and/or components sourced from industrial companies and/or research and development institutions that conduct research, development, and technological innovation activities related to the battery-based electric vehicle industry in the country;
  • c. industrial companies that meet local content requirements as referred to in Article 8 and which produce domestic battery-based electric vehicles as referred to in Article 9;
  • d. industrial companies producing components for battery-based electric vehicles as referred to in Article 10;
  • e. electric vehicle industry companies based on National Branded Batteries as referred to in Article 14;
  • f. companies that provide Electric Motorbike battery (Battery swap) rentals;
  • g. industrial companies that accelerate production and prepare facilities and infrastructure for the use of battery-based electric vehicles;
  • h. companies that manage battery waste;
  • i. companies providing electric charging stations and/or agencies or dwellings that use private electricity installations to charge battery-based electric vehicles;
  • j. public transport companies that use battery-based electric engines; and
  • k. individuals who use battery-based electric vehicles." (own translation)

Furthemore, article 19(1) lists the possible fiscal and non-fiscal incentives to the EV industry:

  • "(...)
  • h. export financing incentives;
  • (...)" (own translation)

The regulation came into force on 12 August 2019. According to article 36 of the presidential regulation, the implementing regulations (introduced by the respective ministries to enforce the presidential regulation) must be introduced no later than one year after this regulation came into force.