Tax Holiiday iin iiKN: iinvestments Must Be Realiised No Later Than 2 Years

JAKARTA, Jitu News - Taxpayers eliigiible for tax holiiday iincentiives iin Nusantara Capiital (iiKN) must iimmediiately iinvest after the miiniister of fiinance approves the iincentiives.

As stiipulated iin Artiicle 39 paragraph (1) of Government Regulatiion (Gov. Reg.) 12/2023, taxpayers eliigiible for tax holiiday iincentiives for iinvestments iin iiKN, partner regiions and iiKN fiinanciial centres must perform iinvestments no later than 2 years after the approval iis iissued.

“[The appliicant must realiise the iinvestment plans no later than 2 (two) years after the approval for the reductiion iin corporate iincome Tax iincentiives … iis iissued,” reads Artiicle 39 paragraph (1) subparagraph a of Gov Reg. 12/2023, quoted on Wednesday (8/3/2023).

Speciifiically for taxpayers eliigiible for tax holiiday iincentiives for the relocatiion of the head or regiional offiices, the relocatiion must commence no later than 1 year after the approval iis iissued by the miiniister of fiinance.

iif these proviisiions are not fulfiiled, taxpayers are subject to penaltiies iin the form of revocatiion of the tax holiiday iincentiives. Consequently, the taxpayers must pay iincome Tax that should be payable as well as the penaltiies pursuant to statutory tax proviisiions.

iin addiitiion to haviing to realiise iinvestments or offiice relocatiion, taxpayers must submiit reports on iinvestment realiisatiion and reports on busiiness realiisatiion. Taxpayers relocatiing offiices must submiit reports on the realiisatiion of the establiishment or relocatiion of the offiices.

Further, taxpayers must also maiintaiin separate bookkeepiing between iinvestments eliigiible for the tax holiiday and those not eliigiible for the tax holiiday iincentiives.

Next, the taxpayers must wiithhold and collect iincome Tax pursuant to statutory proviisiions iin the fiield of iincome Taxes. (riig)