On 31 March 2020, Indonesia President signed the Government Regulation No. 1 for 2020 (PERPPU-1) in handling COVID-19 outbreak. The regulation includes the following tax measures.
- The CIT rate is reduced from 25% to 22% for tax years 2020 and 2021 and to 20% for tax year 2022 onwards. For publicly listed companies with a minimum of 40% of shares held by public investors, the corporate tax rate is further reduced by 3%.
- Import tax payments will be deferred for six months in 19 manufacturing sectors.
- Workers in the manufacturing sector with incomes below Rp200 million per year will be exempt from income taxes for six months.
- Acceleration of VAT refunds in 19 manufacturing sectors.
- Debt payments will be delayed by six months for micro loan credit for businesses affected by COVID-19.
- A digital permanent establishment concept and an electronic transaction tax have been introduced. Under this overseas sellers and e-commerce platform providers are required to appoint a representative in Indonesia to be responsible for paying and reporting the taxes related to these transactions.
