that to implement the provisions under Article 30 letter c of Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year as amended by Government Regulation Number 45 of 2019 concerning the Amendment to Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year, it is necessary to stipulate a Minister of Finance Regulation concerning the Granting of Gross Income Reduction for Job Training, Internship and/or Apprenticeship in the Context of Fostering and Developing Certain Competency-Based Human Resources;

 

 

 

 

Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2010 Number 161, Supplement to the State Gazette of the Republic of Indonesia Number 5183) as amended by Government Regulation Number 45 of 2019 concerning the Amendment to Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2019 Number 119, Supplement to the State Gazette of the Republic of Indonesia Number 6361);

 

 

 

 

MINISTER OF FINANCE REGULATION CONCERNING THE GRANTING OF A GROSS INCOME REDUCTION FOR JOB TRAINING, INTERNSHIP AND/OR APPRENTICESHIP IN THE CONTEXT OF FOSTERING AND DEVELOPING CERTAIN COMPETENCY-BASED HUMAN RESOURCES.

 

 

 

 

Referred to herein this Ministerial Regulation:

1.

Taxpayers are resident corporate Taxpayers incurring expenses for job training, internship and/or apprenticeship in the context of fostering and developing certain competency-based human resources.

2.

Gross income is all income received and/or accrued from business and from outside business, after deducted by sales refunds and discounts and cash discounts in the Tax Year concerned, before deducted by the expenses to derive, collect and maintain income, both from Indonesia and from outside Indonesia.

3.

Online Single Submission, hereinafter abbreviated to OSS, is a business permit issued by the OSS Institution for and on behalf of ministers, heads of institutions, governors or regents/mayors to entrepreneurs through an integrated electronic system.

4.

Cooperation Agreement is an agreement between a Taxpayer and a vocational high school, vocational madrasah aliyah, diploma program tertiary institution in vocational education, job training centre or agency that administers governmental affairs in the field of Central, Provincial Government or Regency/Municipal Government employment for individuals who are not bound by an employment relationship with any party, in the context of organising job training, internship and/or apprenticeship in the context of fostering and developing certain competency-based human resources.

5.

Tax Clearance Certificate is information provided by the Directorate General of Taxes on Taxpayer compliance during a certain period to fulfil the requirements to obtain services or in the context of carrying out certain activities.

 

 

 

 

(1)

Taxpayers may be granted a gross income reduction of a maximum of 200% (two hundred percent) of the total expenses incurred for job training, internship and/or apprenticeship.

(2)

The gross income reduction of a maximum of 200% (two hundred percent) referred to in paragraph (1) includes:

 

a.

a gross income reduction of 100% of the total expenses incurred for job training, internship and/or apprenticeship; and

 

b.

an additional gross income reduction of a maximum of 100% of the total expenses incurred for job training, internship and/or apprenticeship referred to in subparagraph a.

(3)

Taxpayers may utilise the additional gross income reduction referred to in paragraph (2) subparagraph b by fulfiling the following provisions:

 

a.

having carried out job training, internship and/or apprenticeship in the context of fostering and developing certain competency-based human resources;

 

b.

having a Cooperation Agreement;

 

c.

not in a state of tax loss in the Tax Year of the utilisation of the additional gross income reduction; and

 

d.

having submitted a Tax Clearance Certificate.

(4)

Certain competencies referred to in paragraph (3) subparagraph a are competencies taught at:

 

a.

vocational high schools and/or vocational madrasah aliyah for students, educators and/or education staff;

 

b.

diploma program tertiary institutions in vocational education for university students, educators and/or education staff; and/or

 

c.

job training centres for individuals as well as trainees, instructors and/or trainers.

(5)

The list of certain competencies referred to in paragraph (4) is listed in Appendix A which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

(1)

The job training and/or internship referred to in Article 2 paragraph (1) are activities attended by:

 

a.

students, educators and/or education staff at vocational high schools or vocational madrasah aliyah;

 

b.

university students, educators and/or education staff in diploma program tertiary institutions in vocational education;

 

c.

trainees, instructors and/or trainers at job training centres; and/or

 

d.

individuals who are not bound by an employment relationship with any party coordinated by an agency that administers governmental affairs in the field of the Central, Provincial Government or Regency/Municipal Government employment, conducted by Taxpayers at the Taxpayers’ place of business, as part of the vocational education curriculum to master skills or expertise in a certain field.

(2)

The apprenticeship referred to in Article 2 paragraph (1) is apprenticeship carried out by parties assigned by the Taxpayers to teach in vocational high schools, vocational madrasah aliyah, diploma program tertiary institutions in vocational education and/or job training centres.

 

 

 

 

Expenses for job training, internship and/or apprenticeship in the context of fostering and developing human resources that obtain the additional gross income reduction referred to in Article 2 paragraph (2) subparagraph b, include expenses for:

a.

the provision of special physical facilities in the form of training centres and supporting expenses for special physical facilities, including electricity, water, fuel, maintenance expenses and other related expenses to organise job training and/or internship;

b.

instructors or teachers as supervisors for the job training, internship and/or apprenticeship;

c.

goods and/or materials to organise the job training, internship and/or apprenticeship;

d.

honoraria or similar payments granted to students, university students, trainees, individuals who are not bound by an employment relationship with any party, educators/trainers, education staff/trainers and/or instructors constituting job training and/or internship participants; and/or

e.

competency certification expenses for students, university students, trainees, individuals who are not bound by an employment relationship with any party, educators/trainers, education staff/trainers and/or instructors constituting job training and/or internship participants by institutions authorised to perform competency certification pursuant to statutory provisions.

 

 

 

 

To the additional gross income reduction referred to in Article 2 paragraph (2) subparagraph b, the following provisions shall apply:

a.

For the expenses for acquiring tangible and intangible property related to the provision of physical facilities referred to in Article 4 letter a with a useful life of more than 1 (one) year, the additional gross income reduction is calculated from the depreciation or amortisation expenses of the tangible and intangible property concerned expensed in the month the job training and/or internship referred to in Article 3 paragraph (1) are carried out.

b.

For expenses other than the expenses referred to in letter a, the additional gross income reduction is calculated from the expenses actually incurred expensed in the Tax Year concerned.

c.

If the expenses for the provision of special physical facilities in the form of training centres referred to in Article 4 letter a constitute tangible property with a useful life of more than 1 (one) year and are not fully used for one Tax Year for job training and/or internships as referred to in Article 3 paragraph (1), the additional gross income reduction is expensed proportionally based on the timing of the utilisation in one Tax Year.

d.

In respect of the expenses for the provision of special physical facilities in the form of training centres constitute electricity, water and fuel expenses as referred to in Article 4 letter a, the expenses for commercial production purposes and the expenses related to the implementation of job training and/or internship referred to in Article 3 paragraph (1) are indistinguishable, the additional gross income reduction is expensed proportionately based on utilisation related to job training and/or internship.

e.

For the expenses referred to in Article 4 letter d granted to job training and/or internship participants with the following relationship:

 

1.

relatives within a lineage of one degree;

 

2.

business; and/or

 

3.

ownership or control, with the owners, commissioners, directors and/or management of the Taxpayers, the additional gross income reduction cannot be granted.

f.

If the job training and/or internship is carried out using physical facilities, materials and/or goods used in commercial production, the additional gross income reduction may only be granted for the expenses referred to in Article 4 letter b, letter d and letter e.

g.

the additional gross income reduction may be expensed provided that the additional gross income reduction does not result in a tax loss for the current year.

h.

If the additional gross income reduction referred to in letter g results in a tax loss in the current year, the amount of the additional gross income reduction that may be deducted in the current year is the amount that does not result in the tax loss in the current year.

i.

the additional gross income reduction for expenses referred to in Article 4 letter a cannot be granted if the used physical facilities are part of an investment that has received the net gross income reduction facility referred to in:

 

1.

Article 31A of Law Number 7 of 1983 concerning Income Taxes as amended several times, last amended by Law Number 36 of 2008 concerning the Fourth Amendment to Law Number 7 of 1983 concerning Income Taxes; or

 

2.

Article 29A of Government Regulation Number 94 of 2010 as amended by Government Regulation Number 45 of 2019 concerning the Amendment to Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year.

 

 

 

 

The amount of the additional gross income reduction that may be deducted in the current year referred to in Article 2 paragraph (3) and Article 5 letter h is calculated according to the examples listed in Appendix B which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

(1)

To obtain an additional gross income reduction referred to in Article 2 paragraph (2) subparagraph b, Taxpayers submit notification through the OSS system by attaching:

 

a.

Cooperation Agreement; and

 

b.

valid Tax Clearance Certificate.

(2)

The notification referred to in paragraph (1) is carried out no later than before the job training, internship and/or apprenticeship in the context of fostering and developing certain competency-based human resources commences.

(3)

Cooperation Agreement referred to in paragraph (1) subparagraph a at least contains:

 

a.

the number and date of the cooperation agreement;

 

b.

name and Taxpayer Identification Number;

 

c.

the type of competency being taught;

 

d.

names of vocational high schools, vocational madrasah aliyah, diploma program tertiary institutions in vocational education, job training centres and/or agencies that administer governmental affairs in the field of the Central, Provincial Government or Regency/Municipal Government employment;

 

e.

the effective date and validity period of the cooperation;

 

f.

the estimated number of job training and/or internship participants;

 

g.

the estimated number of employees and/or other parties assigned to the apprenticeship; and

 

h.

estimated expenses and year of expenditure.

(4)

If the OSS system does not run accordingly, the notification referred to in paragraph (1) may be submitted offline by the Taxpayers to the Director General of Taxes through the Head of the Regional Office of the Directorate General of Taxes which oversees the Tax Office where the Taxpayers are registered using a letter as per the sample format listed in Appendix C.

(5)

If the notification referred to in paragraph (1) has been received completely and correctly, the OSS system issues a notification stating that the Taxpayers fulfil the criteria to obtain the additional gross income reduction to the Taxpayers concerned.

(6)

If the notification referred to in paragraph (4) has been received completely and correctly, the Taxpayers are declared to fulfil the criteria to obtain the additional gross income reduction.

 

 

 

 

(1)

Taxpayers that have utilised the additional gross income reduction must submit a report on the expenses for job training, internship and/or apprenticeship in the context of fostering and developing certain competency-based human resources every year to the Director General of Taxes through the Head of the Tax Office. where the Taxpayers are registered no later than the filing of the Annual Corporate Income Tax Return for the Tax Year of the utilisation of the additional gross income reduction.

(2)

The report referred to in paragraph (1) shall be submitted as per the sample format listed in Appendix D which constitutes an integral part of this Ministerial Regulation.

(3)

If the Taxpayers do not submit the report referred to in paragraph (1) or submit the report but do not fulfil the provisions referred to in paragraph (2), the Head of the Tax Office where the Taxpayers are registered issues a reprimand letter to the Taxpayers to submit the report within a maximum period of 14 (fourteen) days since the reprimand letter is submitted.

 

 

 

 

The Directorate General of Taxes is authorised to determine that the additional gross income reduction referred to in Article 2 paragraph (2) subparagraph b cannot be granted, if the Taxpayers:

a.

do not prepare the Cooperation Agreement referred to in Article 7 paragraph (3);

b.

carry out activities that are not in accordance with the competency teaching plans stated in the Cooperation Agreement;

c.

do not submit the notification referred to in Article 7 paragraph (1) or paragraph (3); or

d.

do not submit the report referred to in Article 8 paragraph (1) after the expiration of the period referred to in Article 8 paragraph (3) or submit a report but do not fulfil the provisions referred to in Article 8 paragraph (2).

 

 

 

 

(1)

Relevant Ministries and/or Offices may evaluate the effectiveness of the granting of the gross income reduction received by Taxpayers as referred to in Article 2 paragraph (1).

(2)

The relevant Ministries and/or Offices referred to in paragraph (1) are:

 

a.

the Ministry or Provincial Regional Offices that administer governmental affairs in the field of education;

 

b.

the Ministry that administers governmental affairs in the field of religion;

 

c.

the Ministry that administers governmental affairs in the field of higher education;

 

d.

the Ministry or Provincial/Municipal Regional Offices that administers governmental affairs in the field of manpower; and/or

 

e.

the Ministry constituting the sector supervisor for the Taxpayers.

(3)

The evaluation referred to in paragraph (1) includes evaluation of:

 

a.

conformity of job training, internship and/or apprenticeship programs;

 

b.

expertise of instructors or educators for the job training, internship and/or apprenticeship;

 

c.

increased competency of job training, internship and/or apprenticeship participants; and/or

 

d.

employment among the job training, internship and/or apprenticeship participants.

(4)

The results of the evaluation referred to in paragraph (3) are submitted to the Director General of Taxes through the Director of Taxation Regulations II.

(5)

If based on the evaluation referred to in paragraph (4), the activities carried out by the Taxpayers are deemed ineffective, the additional gross income reduction referred to in Article 2 paragraph (2) subparagraph b shall not be granted to the Taxpayers for the following Tax Years after the evaluation from the relevant Ministries and/or Offices referred to in paragraph (2) is carried out.

 

 

 

 

This Ministerial Regulation shall come into force on the date of promulgation.

 

 

 

 

For public cognisance, this Ministerial Regulation shall be promulgated by placement in the Official Gazette of the Republic of Indonesia.

 

 

 

 

Enacted in Jakarta

on 6 September 2019
MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,
signed.
SRI MULYANI INDRAWATI

Promulgated in Jakarta

on 9 September 2019
DIRECTOR GENERAL OF LEGISLATION  

MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,
signed.
WIDODO EKATJAHJANA

OFFICIAL GAZETTE OF THE REPUBLIC OF INDONESIA OF 2019 NUMBER 1028