In December 2011, the government of Indonesia announced a change in the tax legislation for exporters.



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Inception date: 01 Apr 2012 | Removal date: 30 Jan 2014

Tax-based export incentive

On 28 December 2011, the Indonesian Ministry of Finance issued regulation 254/PMK.04/2011 concerning import duty exemptions on goods used in the production process within the export-oriented industries.
According to article 2 of the regulation 254/2011, the goods concerned are "import raw materials to be processed, manufactured, or combined at other goods to be exported", unless they "are consumed in the production process; and/or auxiliary materials are used in the production process but not integral part of Production Results."
In order to be subject to the exemption, importers need to apply for an exemption application at the Directorate General of Customs and Excise and attach the following documents:

  • "a. Import plan that describe's' prediction of quantity and value of required Raw Materials in Exemption period and list of unloading ports;
  • b. Export plan that describe's' prediction of quantity and value of Production Results are produced in Exemption period;
  • c. written explanation on the production period that is required by Company to producers;
  • d. Import license from related agencies in case the Raw Materials are subject to restriction in import;
  • e. conversion, a written statement from Company on the composition of using raw material for every unit of Production Result; and
  • f. Export contract."

Furthermore, the importers concerned are still required to pay a guarantee (art. 10 of regulation 254/2011) beforehand, which includes the relevant import duty, the Value Added Tax and the Luxury-goods Sales Tax. Only once the purpose of the imported goods has been confirmed, is the import duty paid back.
The regulation came into force on 1 April 2012 and was amended by the regulations 176/PMK.04/2013 on 2 Februrary 2014.