Indonesia issued Government Regulation No. 12 of 2023 (GR 12/2023) to facilitate the process of doing business in the new capital and to encourage companies to invest in Nusantara. The regulation aims to provide more security, opportunity and participation for businesses to accelerate the development of the capital so that development can be shared evenly and Indonesia’s economy can be advanced.
The regulation provides a 100 percent income tax deduction for domestic taxpayers with capital investments of at least IDR 10 billion. The duration of the tax holiday depends on the industry and the timing of the investment. Income tax reduction incentive for up to 25 years for investments made from 2023 to 2035 and 20 years for investments made from 2036 to 2045 for financial sector activities including bank, insurance and sharia finance.
