Investment Incentives


Import Duty Exemption

Regulation of Ministry of Finance No. 76/PMK.011/2012 jo. No. 176/PMK.011/2009

  • Exemption from import duty on the import of machines, goods & materials for production for a period of 2 years.
  • Import duty exemption is granted for 2 years based on the installed machine capacity for production purpose and available for 1 year extension.
  • If the company uses at least 30% local machineries, import duty exemption is available for additional product for 4 years.

Requirements:Imported machine, goods and raw material are:

  1. Not yet being locally produced
  2. If the local machines are available, yet unable to fulfil criteria of required machines
  3. If the local machines are available, yet unable to fulfil the total required machines

Tax Allowance

Government Regulation No. 9 of 2016

Facilities:

  • Total net income reduction by 30% of the investment, that are charged respectively 5% per year in the 6 years period.
  • Accelerated depreciation and amortisation.
  • Imposition of income tax on dividends which paid to foreign tax subject of 10% (ten percent), or a lower rate according to the avoidance of double taxation agreement, and
  • Compensation losses longer than 5 (five) years but not more than 10 (ten) years with the certain conditions (can be seen in the regulation)​ for the companies that are
  1. Located in industrial or bonded zone
  2. Developing infrastructure
  3. Using at least 70% domestic raw material
  4. Absorbing 500 to 1000 labours
  5. Having Research and Development (R&D) program
  6. Reinvesting capital
  7. Exporting at least 30% of selling product
  • There are 145 eligible business fields for tax allowance. Further details could be accessed on the 1st and 2nd attachment of the Regulation.

Tax Holiday

​Regulation of Ministry of Finance No. 159/PMK.010/2015

  • Income tax exemption or Tax Holiday are available for 5 to 15 years and is possible for the extension up to 20 years under the discretion of MoF.
  • For Communication, Information and Telecommunication Industry, the value of Investment plan could be lowered from Rp500 billion to Rp1 trillion for exemption up to 50%. If the investment value exceeds Rp1 trillion, the exemption is available up to 100%.
  • There are 9 type of industries that are eligible for Tax Holiday:
  1. Upstream metal industry
  2. Oil refinery industry
  3. Organic basic chemical industry, based on oil and natural gas
  4. Machinery industry producing industrial machine
  5. Processing industry based on agriculture, forestry fisheries
  6. Telecommunication, information and communication equipment industry
  7. Maritime transportation industry
  8. Processing industry that are main industry in Special Economic Zone (SEZ)
  9. Economic infrastructure not in the scheme of Government and Business project (KPBU)
  • The decision for Tax Holiday proposal takes 45 days, with details 25 days at BKPM and 20 days at MoF
  • If the proposal is rejected, the company may get Tax Allowance incentive when they fulfil the criteria stated in Government Regulation No 18 of 2015.

Download document:

Regulation of Ministry of Finance No. 159/PMK.010/2015

Regulation of Chairman of BKPM No. 18 of 2015 on Guidance of Income Tax Facility Application for Investment in certain Business Fields and/or Locations