The Ministry of Finance has adjusted the number of business classification (Klasifikasi Lapangan Usaha/KLU) codes entitled to tax incentives for taxpayers affected by Covid-19. The policy is outlined in the Minister of Finance Regulation No. 149/PMK.03/2021 concerning the Second Amendment to the Minister of Finance Regulation No. 9/PMK.03/2021 concerning Tax Incentives for Taxpayers Affected by the Corona Virus Disease 2019 Pandemic (MoF Reg. 149/2021).
The regulation constitutes amendments to the Minister of Finance Regulation No. 82/PMK.03/2021 concerning Amendments to the Minister of Finance Regulation No. 9/PMK.03/2021 concerning Tax Incentives for Taxpayers Affected by the Corona Virus Disease 2019 Pandemic (MoF Reg. 82/2021). The government has revised said regulation due to necessary adjustments to the criteria for tax incentives recipients. These revisions are aimed at sectors in need of support and constitute broad economic leverage.
Under MoF Reg. 149/2021, the Ministry of Finance does not alter the types of granted incentives. Six incentives are provided by the government for taxpayers affected by Covid-19. First, Article 21 Income Tax borne by the government (Ditanggung Pemerintah/DTP). The Article 21 Income Tax DTP incentives may be utilized by taxpayers under 1,189 KLU. The number of KLU remains the same as before. Second, the final tax DTP for Micro, Small and Medium Enterprises (MSMEs) (Usaha Mikro Kecil Menengah/UMKM). Third, the construction services final tax DTP for the Acceleration Program for Irrigation Water Use (Program Percepatan Peningkatan Tata Guna Air Irigasi/P3-TGAI).
Fourth, exemptions from import Article 22 Income Tax. On a side note, the number of sectors that may take advantage of the import Article 22 Income Tax exemption facility has increased to 397 KLU from formerly 132 KLU. Fifth, a 50% reduction in Article 25 Income Tax installments. The reduction incentives of Article 25 installments are currently given to taxpayers under 481 KLU from the previous 216 KLU. Sixth, VAT preliminary refunds incentives. These incentives are given to taxpayers under 229 KLU from the previous 132 KLU.
Taxpayers whose KLU codes have been added based on MoF Reg. 149/2021 may take advantage of the import Article 22 Income Tax exemption facility by applying for a Withholding Exemption Certificate (Surat Keterangan Bebas/SKB) for the collection of import Article 22 Income Tax. In addition, taxpayers whose KLU codes have been added under this regulation may take advantage of the reduction incentives of Article 25 Income Tax installments from the October 2021 taxable period to 15 November 2021. To obtain these incentives, taxpayers must notify the use of the reduction incentives of Article 25 installments.
Further, employers, taxpayers, or withholding agents that have submitted reports on the realization and/or reports on the realization of the utilization of the Article 21 Income Tax DTP, MSME final tax DTP, and/or construction final tax DTP may rectify the realization report for January 2021 until June 2021 taxable periods no later than 30 November 2021.
Moreover, through MoF Reg. 149/2021, the government has also added new provisions under Article 19C. The article outlines Periodic VAT Returns that are entitled to the preliminary VAT refunds incentives for taxpayers with the newly added KLU codes. Periodic VAT Returns eligible for these incentives include the Periodic VAT Returns for October 2021 until December 2021 taxable periods and the rectifications thereto that are to be filed no later than 31 January 2022.
These incentives may be granted if two conditions are cumulatively satisfied. First, Taxable Persons for VAT Purposes (Pengusaha Kena Pajak/PKP) eligible for the incentives based on MoF Reg. No. 9/PMK.03/2021 for January 2021 to June 2021 taxable periods and the realization was submitted no later than 31 July 2021. Second, PKP eligible for incentives based on MoF Reg. No. 82/PMK.03/2021 for July 2021 to December 2021 taxable periods and the realization is submitted no later than 31 January 2022. Promulgated on 25 October 2021, MoF Reg. 149/2021 has come into effect thereafter.