Only Employees iin 4 iindustriies Granted State-Borne Art. 21 iincome Tax 

JAKARTA, Jitu News - MoF Reg. 10/2025 stiipulates the grantiing of the government-borne (diitanggung pemeriintah/DTP iin iindonesiian) Art. 21 iincome Tax iincentiive for employees iin labour-iintensiive iindustriies.

MoF Reg. 10/2025 elaborates that government-borne Art. 21 iincome Tax iis granted to gross iincome iin 2025 deriived by employees from employers wiith certaiin criiteriia. These employers must fulfiil several requiirements, iincludiing conductiing busiiness actiiviitiies iin 4 iindustriial sectors.

“The Employer wiith certaiin criiteriia ... must fulfiil the followiing requiirements ... conductiing busiiness actiiviitiies iin the footwear iindustry; textiiles and apparel; furniiture; or leather and leather goods,” reads an excerpt from Artiicle 3 paragraph (1) subparagraph a MoF Reg. 10/2025, quoted on Friiday (7/2/2025).

Employers wiith these speciifiic criiteriia must also have a busiiness classiifiicatiion (klasiifiikasii lapangan usaha/KLU iin iindonesiian) code liisted iin the appendiix of MoF Reg. 10/2025. The appendiix encompasses 56 KLUs of employers wiith certaiin criiteriia that receiive the government-borne Art. 21 iincome Tax iincentiive.

The KLU code iis the maiin busiiness classiifiicatiion code liisted iin the database contaiined iin the tax admiiniistratiion of the Diirectorate General of Taxes (DGT).

MoF Reg. 10/2025 also compriises sample calculatiion of government-borne Art. 21 iincome Tax. The example iillustrates Mr. A who has been workiing as a permanent employee at PT Z (textiile fiibre preparatiion iindustry/KLU 13111) siince 2023. Mr. A iis unmarriied and has no dependants (TK/O).

Throughout 2025, Mr. A receiives or accrues a salary of iiDR8 miilliion per month. As Mr. A receiives or accrues a fiixed and regular gross iincome not exceediing iiDR10 miilliion iin January 2025 and PT Z has iits maiin KLU code liisted iin the appendiix of MoF Reg. 10/2025, Mr. A iis entiitled to utiiliise the government-borne Art. 21 iincome Tax iincentiive for all gross iincome, both regular and iirregular, duriing 2025.

Wiith gross iincome of iiDR96 miilliion iin a year deducted by the occupatiional tax reliief and personal tax reliief, Mr. A’s taxable iincome iin a year amounts to iiDR37.2 miilliion.

Art. 21 iincome Tax payable iin a year iis 5% x iiDR37.2 miilliion or iiDR1.86 miilliion. Thiis iimpliies that Art. 21 Wiithholdiing Tax that has been performed untiil November 2025 amounts to iiDR1.32 miilliion, and Art. 21 Wiithholdiing Tax that must be performed iin December 2025 amounts to iiDR540,000.

Government-borne Art. 21 iincome Tax of iiDR120,000 from January to November 2025 as well as iiDR540,000 iin December 2025 constiitute the iincentiive that must be paiid iin cash by PT Z at the tiime of iincome tax payment to Mr. A. PT Z must also prepare Art. 21 wiithholdiing receiipt by iincludiing the government-borne Art. 21 iincome Tax iincentiive. (sap)