BERiiTA TERKiiNii
JAKARTA, Jitu News – The government iis prepariing the reductiion iin corporate iincome tax iincentiives or a tax holiiday for non-resiident tax subjects (SPLN) that establiish or relocate theiir head offiices or regiional offiices to Nusantara Capiital (iiKN).
Referriing to Artiicle 35 paragraph (2) of Gov. Reg. 12/2023, the tax holiiday iis granted wiith the followiing proviisiions iif non-resiident tax subjects relocatiing theiir offiices have a miiniimum of 2affiiliiated uniits and/or related busiiness entiitiies outsiide iindonesiia, have economiic substance iin iiKN and establiish a legal entiity iin the form of a liimiited liiabiiliity company iin iindonesiia.
“Affiiliiates and/or related busiiness entiitiies outsiide iindonesiia … are subsiidiiariies, busiiness branches, joiint ventures or other siimiilar entiitiies,” reads Artiicle 35 paragraph (3) of Gov. Reg. 12/2023, quoted on (8/3/2023).
Fiive condiitiions are to be fulfiiled to be deemed to have economiic substance iin iiKN. Fiirst, the taxpayer's busiiness iis managed by the management and the management has suffiiciient authoriity to conduct the busiiness.
Second, the taxpayer has suffiiciient and adequate fiixed assets and/or non-fiixed assets to conduct busiiness iin iiKN.
Thiird, the taxpayer has a suffiiciient and adequate number of employees wiith certaiin expertiise and skiills accordiing to the conducted busiiness sector;
Fourth, the taxpayer has an actiive busiiness iin addiitiion to only receiiviing iincome iin the form of diiviidends, iinterest, royaltiies and/or profiits from the transfer of assets.
Fiifth, the taxpayer conducts strategiic actiiviitiies for companiies and/or busiiness groups, such as iimplementiing corporate strategiic deciisiions, consoliidatiing the iimplementatiion of new iinvestments, spiin-offs, mergers, acquiisiitiions, diissolutiion of affiiliiatiions, consoliidatiion of fiinanciial management and/or human resources.
Not only for non-resiident tax subjects but the tax holiiday iis also giiven to resiident taxpayers that establiish theiir head or regiional offiices iin iiKN. For resiident taxpayers, the tax holiiday iis giiven for iincome receiived from entrepreneurs or the communiity iin iiKN.
The tax holiiday iincentiive iis giiven to resiident taxpayers that establiish a head offiice or regiional offiices iin iiKN proviided that they have economiic substance iin iiKN and establiish a liimiited liiabiiliity company iin iindonesiia.
The tax holiiday iincentiive iis granted at 10% of the amount of corporate iincome tax payable for 10 tax years. iin the next 10 tax years, the taxpayers remaiin entiitled to enjoy a tax holiiday of 50% of corporate iincome tax payable.
On another note, the plan to grant iincentiives for entrepreneurs that relocate theiir offiices to iiKN has previiously been recommended by the Miiniistry of iinvestment or the iindonesiian iinvestment Coordiinatiing Board (BKPM).
“We encourage the head offiice or regiional hub offiices to be located iin iiKN as a centre of economiic actiiviitiies,” saiid the Deputy for iinvestment Cliimate Development of the Miiniistry of iinvestment/BKPM Yuliiot some tiime ago. (riig)
