On 26 June 2019, the Indonesian government issued a Government Regulation (PP) No. 45 of 2019, which amended Regulation No. 94 of 2010 (GR-94) on the calculation of taxable income and the repayment of income taxes in the current year to stimulate investment in labor-intensive industries, support programs for job creation and employment in Indonesia, and research and development activities.
The new regulation (Number 45 of 2019) includes the following tax incentives:
-Resident taxpayers in Indonesia may be subject to a deduction 200% for costs incurred for arranging work programs, traineeships and / or educational activities to promote and develop specific competency-based human resources;
-Resident taxpayers may also receive a deduction of 60% for costs incurred by labor-intensive industries for investment in tangible fixed assets used for an entity’s main business purpose, including land and excluding taxpayers granted incentives for high-priority sectors which includes 30% allowance, extended loss carry forward and
-If a domestic corporate taxpayers who carry out certain research and development activities in Indonesia, according to this Government Regulation, it can be given a reduction in gross income of no more than 300% (three hundred percent) of the total costs incurred for certain research and development activities in Indonesia.
This Government Regulation No. 45 of 2019 enters into force on June 26, 2019.
