Indonesia’s Ministry of Finance introduced Regulation No. 79 of 2024 (PMK 79) regarding the tax treatment of joint operations on 28 October 2024.
The joint operations are classified into two categories based on their tax requirements: those requiring taxpayer identification (NPWP) and VAT registration (PKP), and those that do not need NPWP and PKP.
The regulation outlines key guidance on several topics, including the criteria and administrative requirements for joint operations with an NPWP and PKP such as a Joint Operation (JO) is required to register for an NPWP if its agreements or activities involve providing goods or services, generating income, and/or incurring expenses or making payments in the JO’s name.
The regulation includes a summary of the tax treatment for such operations, covering VAT, corporate income tax, luxury goods sales tax, and withholding tax. In addition, it addresses the taxation of joint operations without an NPWP or PKP, income tax implications for joint operations involved in land and building transfers, and transitional provisions.
