a.

that to provide more legal certainty and fairness in the income tax treatment of reimbursements or remunerations in respect of employment or services in the form of money or in-kind and/or fringe benefits as well as to avoid tax base erosion, it is necessary to stipulate provisions on the income tax treatment of reimbursements or remunerations in respect of employment or services in the form of in-kind and/or fringe benefits;

b.

that the Minister of Finance Regulation Number 167/PMK.03/2018 concerning the Provision of Food and Beverages for All Employees as Well as reimbursements or Remunerations in the Form of In-Kind and Fringe Benefits in Certain Areas and Those Relating to the Implementation of Employment Which Are Deductible from the Employer's Gross Income has not accommodated the need to adjust the income tax treatment of reimbursements or remunerations in respect of employment or services received or accrued in the form of in-kind and/or fringe benefits, thereby, needs to be replaced;

c.

that based on the reimbursements referred to in letter a and letter b as well as to implement the provisions under Article 31 of Government Regulation Number 55 of 2022 concerning Adjustments to the Regulation in the Field of Income Tax, it is necessary to enact a Minister of Finance Regulation concerning the Income Tax Treatment of reimbursements or Remunerations in Respect of Employment or Services Received or Accrued in the Form of In-Kind and/or Fringe Benefits;

 

 

 

 

 

1.

Article 17 paragraph (3) of the 1945 Constitution of the Republic of Indonesia;

2.

Law Number 7 of 1983 concerning Income Tax (State Gazette of the Republic of Indonesia of 1983 Number 49, Supplement to the State Gazette of the Republic of Indonesia Number 3263) as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations (State Gazette of the Republic of Indonesia of 2021 Number 246, Supplement to the State Gazette of the Republic of Indonesia Number 6736);

3.

Law Number 39 of 2008 concerning State Ministries (State Gazette of the Republic of Indonesia of 2008 Number 166, Supplement to the State Gazette of the Republic of Indonesia Number 4916);

4.

Government Regulation Number 55 of 2022 concerning Adjustments to the Regulation in the Field of Income Tax (State Gazette of the Republic of Indonesia of 2022 Number 231, Supplement to the State Gazette of the Republic of Indonesia Number 6836);

5.

Presidential Regulation Number 57 of 2020 concerning the Ministry of Finance (State Gazette of the Republic of Indonesia of 2020 Number 98);

6.

Minister of Finance Regulation Number 118/PMK.01/2021 concerning the Organisation and Employment Procedures of the Ministry of Finance (Official Gazette of the Republic of Indonesia of 2021 Number 1031) as amended by the Minister of Finance Regulation Number 141/PMK.01/2022 concerning the Amendment to the Minister of Finance Regulation Number 118/PMK.01/2021 concerning the Organisation and Employment Procedures of the Ministry of Finance (Official Gazette of the Republic of Indonesia of 2022 Number 954);

 

 

 

 

 

MINISTER OF FINANCE REGULATION CONCERNING THE INCOME TAX TREATMENT OF REIMBURSEMENTOR REMUNERATIONS IN RESPECT OF WORK OR SERVICES RECEIVED OR ACCRUED IN THE FORM OF IN-KIND AND/OR FRINGE BENEFITS.

 

 

 

 

 

 

Referred to herein this Ministerial Regulation:

1.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations.

2.

Income Tax is Income Tax stipulated under the Income Tax Law.

3.

Taxpayer is any individual or entity, comprising a taxpayer, a collecting agent and a withholding agent having tax rights and obligations pursuant to statutory tax provisions.

4.

Employee is an individual who employments an the employer based on an agreement, contract or employment agreement, either written or unwritten, to carry out employment in a certain position or activities by accruing remunerations paid based on a certain period, completion of employment or other provisions determined by the employer, including an individual who employments in the government sector.

5.

Taxable Period is a period used as the basis for a Taxpayer to calculate, remit and file tax payable in a certain period as determined under the law stipulating general provisions and tax procedures.

6.

Tax Year is a period of 1 (one) calendar year unless a Taxpayer adopts an accounting year that is different from the calendar year.

7.

Tax Return is a letter used by a Taxpayer to file the calculation and/or payment of taxes, taxable objects and/or non-taxable objects and/or assets and liabilities pursuant to statutory tax provisions.

8.

Periodic Tax Return is a Tax Return for a particular Taxable Period.

9.

Annual Tax Return is a Tax Return for a Tax Year or a fraction of a Tax Year.

10.

Employer of Head Office Status is an employer that in tax administration is obliged to file the Annual Income Tax Return.

11.

Regional Office of the Directorate General of Taxes, hereinafter referred to as the Regional Office of the DGT, is a vertical agency of the Directorate General of Taxes under and directly responsible to the Director General of Taxes.

12.

Tax Office is a vertical agency of the Directorate General of Taxes under and directly responsible to the Head of the Regional Office of the DGT.

13.

Regional Office of the DGT in charge of the Tax Office where the Employer of Head Office Status is registered, hereinafter referred to as the Regional Office of the DGT of the Employer of Head Office Status, is the Regional Office of the DGT whose employmenting area covers the area of the Tax Office where the Employer of Head Office Status is registered.

14.

Regional Office of the DGT of the business location, hereinafter referred to as the Regional Office of the DGT of the Location, is the Regional Office of the DGT whose employmenting area covers the area of the employer’s business location other than the employmenting area of the Regional Office of the DGT of the Employer of Head Office Status.

15.

Online Single Submission Management and Organiser Institution, hereinafter referred to as the OSS Institution, is a government institution that administers governmental affairs in the field of investment coordination.

16.

Business Identification Number, hereinafter abbreviated to NIB, is proof of registration/registration of entrepreneurs to conduct a business and constitutes the identification of entrepreneurs in the conduct of their business.

17.

Minister is the minister who administers governmental affairs in the field of state finances.

 

 

 

 

 

 

(1)

Costs for reimbursements or remunerations given in the form of in-kind and/or fringe benefits in respect of employment or services may constitute deductible expenses to determine taxable income by the employer or the provider of remunerations or reimbursements in the form of in-kind and/or fringe benefits insofar as they constitute costs to obtain, collect and maintain income.

(2)

Costs for reimbursements or remunerations in respect of employment referred to in paragraph (1) are costs for reimbursements or remunerations in respect of the employment relationship between the employer and Employees.

(3)

Costs for reimbursements or remunerations in respect of services referred to in paragraph (1) are costs for reimbursements or remunerations due to service transactions between Taxpayers.

(4)

Expenses for costs for reimbursements or remunerations referred to in paragraph (1) in the form of fringe benefits with a useful life of more than 1 (one) year are expensed through depreciation or amortisation pursuant to statutory provisions in the field of Income Tax.

(5)

Expenses for costs for reimbursements or remunerations referred to in paragraph (1) in the form of in-kind and/or fringe benefits with a useful life of less than 1 (one) year are expensed in the year such expenses are incurred.

(6)

The employer or the provider of remunerations or reimbursements file costs for reimbursements or remunerations referred to in paragraph (1) given in the form of in-kind and/or fringe benefits as well as Employees and/or recipients of remunerations or reimbursements in the Annual Income Tax Return.

(7)

The provisions on costs for reimbursements or remunerations given in the form of in-kind and/or fringe benefits in respect of employment or services referred to in paragraph (1) as deductible expenses apply since:

 

a.

1 January 2022, for the employer or the provider of reimbursements or remunerations that maintain bookkeeping for the 2022 accounting year beginning before 1 January 2022; or

 

b.

the start of the 2022 accounting year, for the employer or the provider of reimbursements or remunerations that maintain bookkeeping for the 2022 accounting year beginning on 1 January 2022 or thereafter.

 

 

 

 

 

 

 

(1)

Reimbursements or remunerations in respect of employment or services received or accrued in the form of in- kind and/or fringe benefits are income that constitutes Income Tax objects referred to in Article 4 paragraph (1) subparagraph a of the Income Tax Law.

(2)

Reimbursements or remunerations in respect of employment referred to in paragraph (1) are reimbursements or remunerations in respect of the employment relationship between the employer and Employees.

(3)

Reimbursements or remunerations in respect of services referred to in paragraph (1) are reimbursements or remunerations due to service transactions between Taxpayers.

(4)

Reimbursements or remunerations in respect of employment or services in the form of in-kind referred to in paragraph (1) are reimbursements or remunerations in the form of goods other than money whose ownership is transferred from the provider to the recipient.

(5)

Reimbursements or remunerations in respect of employment or services in the form of fringe benefits referred to in paragraph (1) are reimbursements or remunerations in the form of the right to the utilisation of a facility and/or services sourced from the assets of:

 

a.

the provider of the reimbursements or remunerations; and/or

 

b.

a third party leased and/or financed by the provider, to be utilised by the recipient.

(6)

The provisions on reimbursements or remunerations in respect of employment or services received or accrued in the form of in-kind and/or fringe benefits referred to in paragraph (1) as Income Tax objects apply since:

 

a.

1 January 2022, for Employees or recipients of reimbursements or remunerations receiving or accruing reimbursements or remunerations in the form of in-kind and/or fringe benefits from the employer or the provider of reimbursements or remunerations referred to in Article 2 paragraph (7) subparagraph a; or

 

b.

the start of the 2022 accounting year of the employer or the provider of reimbursements or remunerations, for Employees or recipients of reimbursements or remunerations receiving or accruing reimbursements or remunerations in the form of in-kind and/or fringe benefits from the employer or the provider of reimbursements or remunerations referred to in Article 2 paragraph (7) subparagraph b.

 

 

 

 

 

 

Excluded from Income Tax objects for reimbursements or remunerations in the form of in-kind and/or fringe benefits referred to in Article 3 paragraph (1) include:

a.

food, foodstuff, beverage ingredients and/or beverages provided for all Employees;

b.

in-kind and/or fringe benefits provided in certain areas;

c.

in-kind and/or fringe benefits to be provided by the employer in the implementation of employment;

d.

in-kind and/or fringe benefits sourced or financed by the state budget, local government budget and/or village budget; or

e.

in-kind and/or fringe benefits of certain types and/or thresholds.

 

 

 

 

 

(1)

Food, foodstuff, beverage ingredients and/or beverages provided for all Employees referred to in Article 4 letter a include:

 

a.

food and/or beverages provided by the employer at the workplace;

 

b.

food and/or beverage vouchers for Employees who due to the nature of their employment cannot take advantage of the provision referred to in subparagraph a, including Employees in in the marketing division, transportation division and other off-site assignments; and/or

 

c.

foodstuff and/or beverage ingredients for all Employees with a certain value threshold.

(2)

The vouchers referred to in paragraph (1) subparagraph b are non-monetary transaction instruments that can be exchanged for food and/or beverages.

(3)

Included in the definition of vouchers referred to in paragraph (2) are reimbursements by the employer for expenses the purchase or acquisition of food and/or beverages outside the workplace borne in advance by Employees in the marketing division, transportation division and other off-site assignments referred to in paragraph (1) subparagraph b.

(4)

The value of the vouchers referred to in paragraph (1) subparagraph b excluded from Income Tax objects insofar as not exceeding:

 

a.

IDR2,000,000.00 (two million rupiah) for each Employee within a period of 1 (one) month; or

 

b.

the value of the expenses for the provision of food and/or beverages for each Employee within a period of 1 (one) month provided by the employer at the workplace referred to in paragraph (1) subparagraph a, if the value of the said expenses by the employer exceeds IDR2,000,000.00 (two million rupiah) for each Employee within a period of 1 (one) month.

(5)

The excess difference of the actual voucher value after deducted by the value referred to in paragraph (4) subparagraph a or subparagraph b constitutes an Income Tax object referred to in Article 3 paragraph (1).

(6)

The excess difference of the voucher value referred to in paragraph (5) shall be calculated as per the sample calculation listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

(1)

In-kind and/or fringe benefits to be provided by the employer in the implementation of employment referred to in Article 4 letter c include in-kind and/or fringe benefits in connection with requirements concerning the security, health and/or safety of Employees required by ministries or agencies pursuant to statutory provisions.

(2)

In-kind and/or fringe benefits to be provided by the employer in the implementation of employment in connection with requirements concerning the security, health and/or safety of Employees required by ministries or agencies pursuant to statutory provisions referred to in paragraph (1) include:

 

a.

uniform;

 

b.

equipment for employment safety;

 

c.

Employee shuttle service;

 

d.

lodging for crew members and the like; and/or

 

e.

in-kind and/or fringe benefits received in the context of handling endemic, pandemic or national disasters.

 

 

 

 

 

(1)

The determination of in-kind and/or fringe benefits of certain types and/or thresholds referred to in Article 4 letter e is based on:

 

a.

the types of the in-kind and certain thresholds of the in-kind in the form of the criteria of the recipients and/or the value of the in-kind; and

 

b.

the types of fringe benefits and certain thresholds of fringe benefits in the form of the criteria of the recipients, the value and/or functions of fringe benefits.

(2)

The determination of in-kind of certain types and thresholds referred to in paragraph (1) subparagraph a includes being intended for foodstuff and/or beverage ingredients with a certain value threshold referred to in Article 5 paragraph (1) subparagraph c.

(3)

The determination of in-kind and/or fringe benefits of certain types and thresholds referred to in paragraph (1) includes being intended for in-kind and/or fringe benefits received or accrued by the recipients during 2022.

(4)

The excess difference of the value of the in-kind or fringe benefits received or accrued by the recipient after being deducted by the certain threshold in the form of the value referred to in paragraph (1) subparagraph a and subparagraph b constitutes an Income Tax object referred to in Article 3 paragraph (1).

(5)

In-kind and/or fringe benefits of certain types and/or thresholds referred to in paragraph (1), paragraph (2) and paragraph (3) as well as the sample calculation of the excess difference of the value of the in-kind or fringe benefits referred to in paragraph (4) are listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

(1)

In-kind and/or fringe benefits provided in certain areas referred to in Article 4 letter b include means, infrastructure and/or facilities at the workplace for Employees and their families in the form of:

 

a.

residence, including housing;

 

b.

healthcare services;

 

c.

education;

 

d.

worship;

 

e.

transportation; and/or

 

f.

sports, excluding golf, power boating, horse racing, gliding or motorsports,

 

insofar as the employer’s business location obtains the determination of certain areas from the Director General of Taxes.

(2)

Means, infrastructure and/or facilities for Employees and their families referred to in paragraph (1) are in the form of means, infrastructure and/or facilities organised by:

 

a.

the employer independently; and/or

 

b.

other parties cooperating with the employer and the employer bear the costs for the organisation of the said means, infrastructure and/or facilities.

(3)

Means, infrastructure and/or facilities in the form of healthcare services and/or education for Employees and their families organised by other parties referred to in paragraph (2) subparagraph b include the means, infrastructure and/or facilities in the form of health services and/or education located in the regency or municipal area of the employer’s business location and/or the regency or municipal area directly adjacent to the regency or municipal area of the employer's business location.

(4)

Means, infrastructure and/or facilities at the workplace for Employees and their families in the form of transportation referred to in paragraph (1) subparagraph e include transportation for Employees and their families in carrying out assignments.

 

 

 

 

 

 

(1)

Certain areas referred to in Article 8 paragraph (1) include areas that are economically feasible to be developed but the condition of the economic infrastructure is generally inadequate and difficult to reach by public transportation, whether by land, sea or air, thereby, to change the available economic potentials into a real economic strength, investors bear relatively high risks and a relatively long return period, including areas of sea waters that have a depth of more than 50 (fifty) metres where the seabed has mineral reserves, including remote areas.

(2)

Economic infrastructure referred to in paragraph (1) include 8 (eight) types as follows:

 

a.

electricity;

 

b.

clean water;

 

c.

housing that may be rented by Employees;

 

d.

hospitals and/or polyclinics;

 

e.

schools;

 

f.

permanent sports and/or entertainment venues;

 

g.

places of worship; and

 

h.

markets.

(3)

Public transportation referred to in paragraph (1) includes 3 (three) types as follows:

 

a.

roads and/or bridges;

 

b.

ports or seaports, ports or river ports or airports; and

 

c.

public transportation by land, sea or air.

(4)

An employer’s business location determined as a certain area is determined by the unavailability or inadequacy of a minimum of 6 (six) of 11 (eleven) types of economic infrastructure referred to in paragraph (2) and public transportation infrastructure referred to in paragraph (3).

(5)

Unavailability or inadequacy of a minimum of 6 (six) referred to in paragraph (4) must have a minimum of 1 (one) type of unavailable or inadequate infrastructure of the types of public transportation infrastructure.

(6)

If the economic and public transportation infrastructure has been constructed independently by the employer, the said economic and public transportation infrastructure shall be taken into account as unavailable infrastructure in determining the unavailability or inadequacy referred to in paragraph (4).

 

 

 

 

 

(1)

The determination of an employer’s business location as a certain area referred to in Article 8 paragraph (1) may be granted:

 

a.

until the validity period of certain mining permits expires, for employers holding certain mining permits; or

 

b.

for a period of 5 (five) years, for employers other than employers holding certain mining permits.

(2)

Certain mining permits referred to in paragraph (1) subparagraph a include:

 

a.

contracts of employment;

 

b.

coal mining concession employment agreements; or

 

c.

permits in the field of mining pursuant to statutory provisions in the field of mineral and coal mining.

(3)

The determination of an employer’s business location holding certain mining permits referred to in paragraph (1) subparagraph a as a certain area is granted:

 

a.

immediately until the validity period of certain mining permits expires, for employers holding certain mining permits with the remaining validity period of certain mining permits of up to 5 (five) years; or

 

b.

gradually every 5 (five) year period until the validity period of certain mining permits expires, for employers holding certain mining permits with the remaining validity period of certain mining permits of more than 5 (five) years.

(4)

If when the period referred to in paragraph (1) subparagraph b and paragraph (3) subparagraph b expires, the employer’s business location continues to fulfil the criteria of a business location in a certain area referred to in Article 9 paragraph (1), the determination of a business location in certain areas referred to in paragraph (1) may be extended:

 

a.

for the next period pursuant to the provisions referred to in paragraph (3) subparagraph a or subparagraph b, for employers holding certain mining permits; or

 

b.

for a period of 5 (five) years, for employers other than employers holding certain mining permits.

 

 

 

 

 

(1)

The Director General of Taxes is authorised to determine that an employer’s business location is in certain areas.

(2)

The Director General of Taxes delegates the authority to determine that an employer’s business location is in certain areas as referred to in paragraph (1) to the Head of the Regional Office of the DGT of the Employer of Head Office Status.

 

 

 

 

 

(1)

Employers of Head Office Status with a business location in certain areas referred to in Article 9 paragraph (1) may apply for the determination of a business location in certain areas to the Head of the Regional Office of the DGT of the Employer of Head Office Status.

(2)

The application for the determination of the business location referred to in paragraph (1) is submitted for every business location that fulfils the criteria of certain areas referred to in Article 9 paragraph (1).

(3)

The application referred to in paragraph (1) at least contains:

 

a.

the name of the Employer of Head Office Status;

 

b.

the Taxpayer Identification Number of the Employer of Head Office Status;

 

c.

the office address of the Employer of Head Office Status;

 

d.

the tax identity of the business location for which the determination of a business location in a certain area is applied;

 

e.

the address of the business location for which the determination of a business location in a certain area is applied; and

 

f.

the coordinate points of the business location for which the determination of a business location in a certain area is applied.

(4)

Employers of Head Office Status that may apply referred to in paragraph (1) must fulfil the following provisions:

 

a.

having filed:

 

 

1.

the Annual Income Tax Returns for the last 2 (two) Tax years; and/or

 

 

2.

Periodic Value Added Tax Returns for the last 3 (three) Taxable Periods,

 

b.

not having tax liabilities or having tax liabilities but for the entire tax liabilities, a permit to defer or pay tax in instalments has been obtained pursuant to statutory provisions in the field of taxation; and

 

c.

not currently in the process of handling a tax crime and/or a money laundering crime whose predicate crime is a tax crime in the form of a public preliminary investigation, investigation or prosecution.

(5)

The application referred to in paragraph (1) is submitted by attaching required documents in the form of a copy of:

 

a.

the Business Identification Number issued by the OSS Institution or other equivalent documents issued by other competent agencies pursuant to statutory provisions;

 

b.

the location map; and

 

c.

a statement on the condition of economic infrastructure and public transportation at the business location.

(6)

The statement on the condition of economic infrastructure and public transportation at the business location referred to in paragraph (5) subparagraph c at least contains:

 

a.

the address of the business location for which the determination of a business location in a certain area is applied;

 

b.

the coordinate points of the business location for which the determination of a business location in a certain area is applied;

 

c.

the availability of economic infrastructure and public transportation referred to in Article 9 paragraph (2) and paragraph (3) at the business location;

 

d.

the condition of economic infrastructure and public transportation referred to in Article 9 paragraph (2) and paragraph (3) at the business location; and

 

e.

the date of the determination of the availability and the condition of economic infrastructure and public transportation referred to in Article 9 paragraph (2) and paragraph (3).

(7)

Employers of Head Office Status included in employers holding certain mining permits referred to in Article 10 paragraph (2), in addition to attaching the required documents referred to in paragraph (5) must attach required documents in the form of a copy of:

 

a.

the contract of employment, for holders of contracts of employment referred to in Article 10 paragraph (2) subparagraph a;

 

b.

the coal mining concession employment agreement, for holders of coal mining concession employment agreements referred to in Article 10 paragraph (2) subparagraph b; or

 

c.

permits in the field of mining pursuant to statutory provisions in the field of mineral and coal mining, for holders of permits in the field of mining referred to in Article 10 paragraph (2) subparagraph c.

 

 

 

 

 

(1)

The application referred to in Article 12 paragraph (1) as well as the required documents referred to in Article 12 paragraph (5) and paragraph (7) shall be submitted by Employers of Head Office Status in writing to the Head of the Regional Office of the DGT of the Employer of Head Office Status through the Head of the Tax Office where the Employers of Head Office Status are registered.

(2)

The application referred to in paragraph (1) may be submitted:

 

a.

in person;

 

b.

by post, a shipping company or courier services with proof of postage; or

 

c.

electronically.

(3)

The application referred to in paragraph (2) subparagraph c is submitted electronically if the system is already available.

(4)

Procedures for the electronic submission of the application referred to in paragraph (2) subparagraph c are implemented pursuant to the Ministerial Regulation stipulating procedures for the exercise of tax rights and the fulfilment of tax obligations as well as the issuance, signing and the electronic delivery of decisions or tax assessments.

 

 

 

 

 

The application referred to in Article 12 paragraph (1) and the statement on the condition of economic infrastructure and public transportation referred to in Article 12 paragraph (5) subparagraph c shall be prepared as per the sample format of the application and statement listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

(1)

The Head of the Regional Office of the DGT of the Employer of Head Office Status verifies the completeness of the application referred to in Article 12 paragraph (1).

(2)

If the Employer of Head Office Status’ application is declared incomplete based on the verification referred to in paragraph (1), the Head of the Regional Office of the DGT of the Employer of Head Office Status submits a request letter for complete documents to the Taxpayer no later than 15 (fifteen) business days from the receipt of the application.

(3)

Employers of Head Office Status must complete the documents in the request letter referred to in paragraph (2) no later than 10 (ten) business days since the request letter for complete documents is received.

(4)

The request letter for complete documents referred to in paragraph (2) at least contains:

 

a.

details of the documents requested to be completed; and

 

b.

the period referred to in paragraph (3).

(5)

If the period referred to in paragraph (3) elapses and the Employer of Head Office Status is unable to complete the requested documents, the Head of the Regional Office of the DGT of the Employer of Head Office Status notifies the Employer of Head Office Status that the application cannot be considered.

(6)

The request letter for complete documents referred to in paragraph (2) shall be prepared as per the sample format of the letter listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

(1)

In respect of the complete application based on the verification referred to in Article 15 paragraph (1), the Head of the Regional Office of the DGT of the Employer of Head Office Status:

 

a.

inspects the business location; or

 

b.

may request assistance from the Head of Regional Office of the DGT of the Location to inspect if the business location is outside the employmenting area of the Head of the Regional Office of the DGT of the Employer of Head Office Status.

(2)

Based on the results of the inspection referred to in paragraph (1), the Head of the Regional Office of the DGT of the Employer of Head Office Status must issue a:

 

a.

decision on approval: or

 

b.

decision on rejection.

(3)

The decision on approval referred to in paragraph (2) subparagraph a at least contains:

 

a.

the name of the Employer of Head Office Status;

 

b.

the Taxpayer Identification Number of the Employer of Head Office Status;

 

c.

the office address of the Employer of Head Office Status;

 

d.

the tax identity of the business location approved to be determined as a certain area;

 

e.

the address of the business location approved to be determined as a certain area;

 

f.

the coordinate points of the business location approved to be determined as a certain area;

 

g.

the validity period of the decision on approval;

 

h.

the month and year the decision on approval becomes valid; and

 

i.

the month and year the decision on approval becomes invalid.

(4)

The decision referred to in paragraph (2) must be issued no later than 4 (four) months after the application is complete as referred to in paragraph (1).

(5)

The decision on approval referred to in paragraph (2) subparagraph a and the decision on rejection referred to in paragraph (2) subparagraph b shall be prepared as per the sample format of the decision listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

If the period referred to in Article 16 paragraph (4) elapses and the Head of the Regional Office of the DGT of the Employer of Head Office Status does not decide:

a.

the Employer of Head Office Status’ application is deemed approved as of the end of the Taxable Period of the period referred to in Article 16 paragraph (4); and

b.

the Head of the Regional Office of the DGT of the Employer of Head Office Status issues a decision on approval within a maximum period of 5 (five) business days after the period referred to in Article 16 paragraph (4) expires.

 

 

 

 

 

(1)

Employers of Head Office Status other than employers holding certain mining permits that have obtained a decision on approval of the determination of a business location in certain areas may apply for an extension of the determination of a business location in certain areas referred to in Article 10 paragraph (4) subparagraph b to the Head of the Regional Office of the DGT of the Employer of Head Office Status.

(2)

The application for an extension referred to in paragraph (1) must be submitted no later than 4 (four) months before the period referred to in Article 10 paragraph (1) subparagraph b expires.

(3)

If the period referred to in paragraph (2) elapses, Employers of Head Office Status may re-apply for the determination of a business location in certain areas referred to in Article 12 paragraph (1) insofar as the business location continues to fulfil the criteria of a business location in certain areas referred to in Article 9 paragraph (1).

(4)

The application for an extension referred to in paragraph (1) is submitted by attaching the required documents in the form of a copy of:

 

a.

the Business Identification Number issued by the OSS Institution or other equivalent documents issued by other competent agencies pursuant to statutory provisions;

 

b.

the location map;

 

c.

the statement on the condition of economic infrastructure and public transportation at the business location referred to in Article 12 paragraph (5) subparagraph c; and

 

d.

the decision on approval of the determination of a business location in certain areas held by the Employers of Head Office Status.

 

 

 

 

 

The provisions on the determination of a business location in certain areas referred to in Article 13, Article 14, Article 15, Article 16 and Article 17 apply mutatis mutandis to the application for an extension of the determination of a business location in certain areas referred to in Article 18 paragraph (1).

 

 

 

 

 

(1)

The business location of employers holding certain mining permits as certain areas to be extended to the next period referred to in Article 10 paragraph (4) subparagraph a is determined ex officio by the Head of the Regional Office of the DGT of the Employer of Head Office Status.

(2)

To assess if the business location still fulfils the criteria of a business location in certain areas referred to in Article 9 paragraph (1) the Head of the Regional Office of the DGT of the Employer of Head Office Status:

 

a.

inspects the business location; or

 

b.

may request assistance from the Head of Regional Office of the DGT of the Location to inspect if the business location is outside the employmenting area of the Head of the Regional Office of the DGT of the Employer of Head Office Status.

(3)

Based on the results of the inspection referred to in paragraph (2), the Head of the Regional Office of the DGT of the Employer of Head Office Status issues:

 

a.

a decision on approval of the extension of the determination of a business location in certain areas; or

 

b.

the notification of the termination of the extension of the determination of a business location in certain areas.

(4)

The decision or notification referred to in paragraph (3) must be issued no later than the date the decision on approval of the former determination.

(5)

If the period referred to in paragraph (4) elapses, the Head of the Regional Office of the DGT of the Employer of Head Office Status does not issue a decision or notification, the Head of the Regional Office of the DGT of the Employer of Head Office Status issues a decision on approval of the extension within a maximum period of 5 (five) business days after the period referred to in paragraph (4) expires.

 

 

 

 

 

The decision on approval of the extension of the determination of a business location in certain areas referred to in Article 20 paragraph (3) subparagraph a and the notification of the termination of the extension of the determination of a business location in certain areas referred to in Article 20 paragraph (3) subparagraph b shall be prepared as per the sample format listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

 

(1)

Income in the form of reimbursements or remunerations in the form of in-kind and/or fringe benefits received or accrued in respect of employment or services referred to in Article 3 paragraph (1) is assessed pursuant to the following provisions:

 

a.

the market value for reimbursements or remunerations in the form of in-kind; and/or

 

b.

the amount of costs incurred or should be incurred by the provider for reimbursements or remunerations in the form of fringe benefits.

(2)

If reimbursements or remunerations in the form of in-kind are goods that are originally intended to be traded by the provider in the form of:

 

a.

land and/or buildings, assessed based on market value referred to in paragraph (1) subparagraph a; or

 

b.

other than land and/or buildings, the market value referred to in paragraph (1) subparagraph a is the cost of goods sold.

(3)

Reimbursements or remunerations in the form of fringe benefits with a utilisation period of more than 1 (one) month given in respect of employment are assessed every month during the utilisation period of the fringe benefits.

(4)

If reimbursements or remunerations in the form of fringe benefits are given to more than 1 (one) recipient for a facility and/or service, the calculation basis in the form of the amount of costs incurred or should be incurred referred to in paragraph (1) subparagraph b shall be allocated proportionally to each recipient of the reimbursements or remunerations in the form of fringe benefits based on the recording of the utilisation of the fringe benefits.

(5)

The calculation of:

 

a.

the assessment of reimbursements or remunerations in the form of in-kind and/or fringe benefits referred to in paragraph (1);

 

b.

the assessment of reimbursements or remunerations in the form of fringe benefits with a utilisation period of more than 1 (one) month in respect of employment every month during the utilisation period of the fringe benefits referred to in paragraph (3); and

 

c.

the assessment of reimbursements or remunerations in the form of fringe benefits given to more than 1 (one) recipient for a facility and/or service based on the recording of the utilisation of the fringe benefits referred to in paragraph (4),

 

shall be performed as per the sample calculation listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

(1)

The employer or the provider of reimbursements or remunerations in the form of in-kind and/or fringe benefits must withhold Income Tax pursuant to statutory provisions in the field of taxation.

(2)

Income Tax is withheld by the employer or the provider of reimbursements or remunerations in the form of in-kind and/or fringe benefits referred to in paragraph (1) at the end of the month in which:

 

a.

the said income is transferred or becomes payable, according to whichever event occurs first for reimbursements or remunerations in the form of in-kind; or

 

b.

the supply of the right or the acquisition of the right to the utilisation of a facility and/or service by the provider for reimbursements or remunerations in the form of fringe benefits.

(3)

Income Tax referred to in paragraph (2) is withheld as per the samples listed in the Appendix which constitutes an integral part of this Ministerial Regulation.

(4)

Reimbursements or remunerations in respect of employment or services in the form of in-kind and/or fringe benefits received or accrued in the January 2023 Taxable Period until the June 2023 Taxable Period are excluded from the withholding referred to in paragraph (1).

 

 

 

 

 

For reimbursements or remunerations in respect of employment or services in the form of in-kind and/or fringe benefits received or accrued since 1 January 2023 until 30 June 2023 that have not been subject to Withholding Tax by the employer or the provider of reimbursements or remunerations, Income Tax payable must be calculated and self-paid as well as filed by the recipient in the Annual Income Tax Return.

 

 

 

 

 

 

When this Ministerial Regulation comes into force:

a.

decision letters on approval of the determination or an extension of the determination of a business location in certain areas that have been issued pursuant to the Minister of Finance Regulation Nomor 167/PMK.03/2018 concerning the Provision of Food and Beverages for All Employees as Well as Reimbursements or Remunerations in the Form of In-Kind and Fringe Benefits in Certain Areas and Those Relating to the Implementation of Employment Which Are Deductible from the Employer’s Gross Income (Official Gazette of the Republic of Indonesia of 2018 Number 1683) remain valid until the expiration of the determination period or the extension of the said determination;

b.

the treatment of in-kind and/or fringe benefits provided in certain areas determined under the decision letters referred to in letter a shall be implemented pursuant to the provisions referred to in Article 8 of this Ministerial Regulation;

c.

for the application for the determination or an extension of the determination of a business location in certain areas received before the enactment of this Ministerial Regulation but no decision has been issued, the Regional Office of the DGT of the Employer of Head Office Status must settle the application pursuant to the provisions under this Ministerial Regulation;

d.

for the application for the determination or an extension of the determination of a business location in certain areas received before the enactment of this Ministerial Regulation but based on the results of the verification, the application is incomplete and a request letter for complete documents has not been submitted, the Regional Office of the DGT of the Employer of Head Office Status must send a request letter for complete documents no later than 15 (fifteen) days since the enactment of this Ministerial Regulation;

e.

the application for the determination or an extension of the determination of certain areas referred to in letter c subject to an inspection by the Regional Office of the DGT of the Location and no decision has been issued after 4 (four) months since the application is completely received, shall be excluded from the provisions under Article 16 paragraph (4) and a decision must be issued no later than:

 

1.

6 (six) months after the application is completely received; or

 

2.

1 (one) month since this Ministerial Regulation comes into force,

 

according to whichever event occurs first; and

f.

employers holding certain mining permits referred to in Article 10 paragraph (1) subparagraph a that hold a decision letter on approval for the determination or an extension of the determination of a business location in certain areas which expires after the issuance of this Ministerial Regulation are required to re-apply in the context of an extension of the determination of a business location in certain areas no later than 4 (four) months before the expiration of the period in the approval of the determination or the extension of the determination.

 

 

 

 

 

 

When this Ministerial Regulation comes into force, the Minister of Finance Regulation Number 167/PMK.03/2018 concerning the Provision of Food and Beverages for All Employees as Well as Reimbursements or Remunerations in the Form of In-Kind and Fringe Benefits in Certain Areas and Those Relating to the Implementation of Employment Which Are Deductible from the Employer’s Gross Income (Official Gazette of the Republic of Indonesia of 2018 Number 1683), is revoked and declared invalid.

 

 

 

 

 

This Ministerial Regulation shall come into force on 1 July 2023.

 

 

 

 

 

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

 

 

 

 

 

Enacted in Jakarta

on 27 June 2023

MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,

signed

SRI MULYANI INDRAWATI

 

Promulgated in Jakarta

on 27 June 2023

DIRECTOR GENERAL OF LEGISLATION

MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,

signed

ASEP N. MULYANA

 

OFFICIAL GAZETTE OF THE REPUBLIC OF INDONESIA OF 2023 NUMBER 495