Government Regulation - 12 TAHUN 2023

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GOVERNMENT OF THE REPUBLIC OF INDONESIA REGULATION NUMBER 12 OF 2023 CONCERNING THE GRANTING OF BUSINESS PERMITS, EASE OF DOING BUSINESS AND INVESTMENT FACILITIES TO ENTREPRENEURS IN THE NUSANTARA CAPITAL BY THE GRACE OF ALMIGHTY GOD THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering
a.	that to realise Nusantara Capital as a sustainable city in the world, the driving force of Indonesia’s future economy and a symbol of national identity as mandated by Law Number 3 of 2022 concerning the State Capital, it is necessary to accelerate the construction and development of Nusantara Capital which constitutes a high priority scale and has strategic values for the national economy;
b.	that based on the considerations referred to in letter a, it is necessary to provide special policies in the granting of business permits, ease of doing business and investment facilities to entrepreneurs performing investments and economic activities and/or finance the construction and development of Nusantara Capital and/or partner regions;
c.	that based on the considerations referred to in letter a and letter b, it is necessary to stipulate a Government Regulation concerning the Granting of Business Permits, Ease of Doing Business and Investment Facilities to Entrepreneurs in the Nusantara Capital;

In View of
1.	Article 5 paragraph (2) 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 50, Supplement to the State Gazette of the Republic of Indonesia Number 3263) as amended several times, last amended by Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation (State Gazette of the Republic of Indonesia of 2022 Number 238, Supplement to the State Gazette of the Republic of Indonesia Number 6841);
3.	Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 1983 Number 51, Supplement to the State Gazette Number 3264) as amended several times, last amended by Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation (State Gazette of the Republic of Indonesia of 2022 Number 238, Supplement to the State Gazette of the Republic of Indonesia Number 6841);
4.	Law Number 10 of 1995 concerning Customs (State Gazette of the Republic of Indonesia of 1995 Number 75, Supplement to the State Gazette Number 3612) as amended by Law Number 17 of 2006 concerning the Amendment to Law Number 10 of 1995 concerning Customs (State Gazette of the Republic of Indonesia of 2006 Number 93, Supplement to the State Gazette Number 4661);
5.	Law Number 25 of 2007 concerning Investments (State Gazette of the Republic of Indonesia of 2007 Number 67, Supplement to the State Gazette Number 4724) as amended several times, last amended by Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation (State Gazette of the Republic of Indonesia of 2022 Number 238, Supplement to the State Gazette of the Republic of Indonesia Number 6841);
6.	Law Number 3 of 2022 concerning the State Capital (State Gazette of the Republic of Indonesia of 2022 Number 41, Supplement to the State Gazette of the Republic of Indonesia Number 6766);

HAS DECIDED:
To enact
GOVERNMENT REGULATION CONCERNING THE GRANTING OF BUSINESS PERMITS, EASE OF DOING BUSINESS AND INVESTMENT FACILITIES TO ENTREPRENEURS IN THE NUSANTARA CAPITAL.

CHAPTER I GENERAL PROVISIONS Article 1
Referred to herein this Government Regulation:
1.	Investment is all forms of investments, both by domestic investors and foreign investors to conduct business in the territory of the Unitary Republic of Indonesia.
2.	The Capital of the State named Nusantara and hereinafter referred to as Nusantara Capital is a special local governance unit at the provincial level in whose territory, the State Capital is domiciled.
3.	The Head of the Nusantara Capital Authority, hereinafter referred to as the Head of the Authority, is the Head of the Government of the Special Region of Nusantara Capital.
4.	The Government of the Special Region of Nusantara Capital, hereinafter referred to as the Nusantara Capital Authority, is the administrator of the preparation, construction and relocation of the State Capital as well as the administrator of the Nusantara Capital Special Local Governance.
5.	Master Plan of the Nusantara Capital is an integrated planning document in implementing the preparation, construction and relocation of the State Capital as well as the administration of the Nusantara Capital Special Local Governance.
6.	National Strategic Area of the Nusantara Capital, hereinafter referred to as Nusantara Capital KSN, is a special zone whose area coverage and functions are determined and regulated pursuant to statutory provisions stipulating the State Capital.
7.	Partner Regions are certain zones on the Island of Kalimantan established for the construction and development of the Nusantara Capital economic Superhub, in collaboration with the Nusantara Capital Authority and determined through the Head of the Authority Decree.
8.	Assets under the Control of the Nusantara Capital Authority, hereinafter referred to as ADP, are land in the Nusantara Capital territory not related to the administration of governance.
9.	Entrepreneur is an individual or a business entity that conducts business and/or activities in a particular sector.
10.	Business Permit is the legality granted to Entrepreneurs to start and conduct their business and/or activities.
11.	Investment Facilities are all forms of fiscal and non-fiscal incentives as well as ease of Investment services, pursuant to statutory provisions.
12.	Online Single Submission System, hereinafter referred to as the OSS System, is an integrated electronic system managed and organised by the OSS institution for the implementation of Risk-Based Business Permits.
13.	Right to Land, hereinafter abbreviated to HAT, is the right obtained from the legal relationship between the parties entitled to land, including space on land and/or underground space to control, hold, use and utilise and maintain land, space on land and/or underground space.
14.	Right to Cultivate, hereinafter abbreviated to HGU, is the right to exploit land that is directly controlled by the State, for agricultural, fisheries or animal husbandry companies.
15.	Right to Build, hereinafter abbreviated to HGB, is the right to erect buildings for unoccupied land.
16.	Management Right, hereinafter referred to as HPL, is the right to control from the state whose authority is partially delegated to the holders of the HPL.
17.	Acquisition Duty on Right to Land and/or Building, hereinafter abbreviated to BPHTB, is a tax imposed on the acquisition of the rightsto land and/or building.
18.	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.
19.	Financial Center, hereinafter referred to as Financial Center, is an area designated as a concentration of financial services and the centre of technology development and supporting services in the financial services sector.
20.	Taxes on Imports Facilities Facilities, hereinafter referred to as PDRI facilities, are tax concessions in the form of subject to Import Value Added Tax but not collected and the exemption from Income Tax in the context of imports.
21.	Article 21 Income Tax is Income Tax withheld pursuant to the provisions under Article 21 of Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Government Regulation in lieu of Law Number 2 of 2022 concerning Job Creation.

Article 2
(1)	This government regulation aims to provide certainty, greater opportunities and participation to Entrepreneurs in the context of accelerating development in Nusantara Capital.
(2)	In the context of accelerating development in Nusantara Capital referred to in paragraph (1), the Nusantara Capital Authority, based on the criteria and according to the detailed spatial planning of Nusantara Capital and Master Plan of the Nusantara Capital, determines Partner Regions.
(3)	Entrepreneurs conducting business in Nusantara Capital Referred to in paragraph (1) or business in Partner Regions referred to in Paragraph (2) are granted Business Permits, ease of doing business and Investment Facilities.
(4)	Businesses given Business Permits, ease of doing business and Investment Facilities, in Partner Regions referred to in paragraph (3) are stipulated by the Head of the Authority Regulation.
(5)	The granting of fiscal facilities as the local governments’ authority in Partner Regions is coordinated by the Nusantara Capital Authority and local governments in Partner Regions.
(6)	The granting of fiscal facilities as the central government’s authority is coordinated by The Nusantara Capital Authority and the central government.

Article 3
The regulatory scope of this Government Regulation includes:
a.	Business Permits;
b.	ease of doing business;
c.	Investment Facilities;
d.	supervision; and
e.	evaluation.

CHAPTER II BUSINESS PERMITS Section One General Article 4
(1)	Business Permits referred to in Article 3 letter A are given by the Nusantara Capital Authority according to its authority to Entrepreneurs that will start and conduct business at Nusantara Capital and Partner Regions.
(2)	For Entrepreneurs that will start and conduct business referred to in paragraph (1), Taxpayer status confirmation is not required.
(3)	Business Permits in Nusantara Capital and in Partner Regions referred to in paragraph (1) are implemented in an integrated manner through the OSS Systems pursuant to statutory provisions.

Article 5
To Business Permits in Nusantara Capital and Partner Regions referred to in Article 4, the provisions on the requirements for the limitation of foreign capital ownership in a particular business sector do not apply.

Article 6
To Business Permits in Nusantara Capital and Partner Regions referred to in Article 5, the requirements for the partnership with micro, small and medium enterprises or cooperatives apply pursuant to statutory provisions.

Article 7
Entrepreneurs that will start and conduct business in Nusantara Capital and Partner Regions referred to in Article 4 paragraph (1) must fulfil:
a.	the basic requirements of Business Permits; and/or
b.	sectoral Business Permits.

Section Two Basic Requirements of Business Permits Article 8
Basic requirements of Business Permits referred to in Article 7 letter a include:
a.	conformity of spatial planning;
b.	environmental approval; and
c.	building approval and certificate of occupancy.

Article 9
(1)	The conformity of spatial planning referred to in Article 8 letter a is the conformity between business plans and the spatial planning and/or zoning plans.
(2)	The conformity of spatial planning referred to in paragraph (1) is granted by the Nusantara Capital Authority to Entrepreneurs with business locations according to the detailed spatial planning of Nusantara Capital.
(3)	If the detailed spatial planning of Nusantara Capital referred to in paragraph (2) has not been determined by the Head of the Authority, the conformity of spatial planning shall be conformed based on the spatial planning of the Nusantara Capital KSN, the spatial planning of Kalimantan Island, the zoning planning of the inter-regional area of the Makassar Strait or the National regional spatial planning.
(4)	The Nusantara Capital Authority shall prepare and make available the detailed spatial planning of Nusantara Capital referred to in paragraph (2) in digital form and according to standards.
(5)	Under certain conditions, the detailed spatial planning of Nusantara Capital referred to in paragraph (4) may be reviewed with due observance of the spatial planning of the Nusantara Capital KSN and Master Plan of the Nusantara Capital.
(6)	Certain conditions referred to in paragraph (5) are changes to strategic national policies pursuant to statutory provisions.

Article 10
(1)	The environmental approval referred to in Article 8 letter b refers to an analysis of the environmental impact of the Nusantara Capital territory.
(2)	If Entrepreneurs conduct business with a significant impact on the environment pursuant to statutory provisions in the environmental sector, the Entrepreneurs must submit detailed environmental management plans and detailed environmental monitoring plans.
(3)	The environmental approval referred to in paragraph (1) is granted by the Nusantara Capital Authority pursuant to statutory provisions in the environmental sector.

Article 11
(1)	The building approval and certificate of occupancy referred to in Article 8 letter c are granted by the Nusantara Capital Authority to Entrepreneurs that have obtained the conformity of spatial planning referred to in Article 9 and the environmental approval referred to in Article 10.
(2)	Entrepreneurs referred to in paragraph (1) may perform construction in parallel, according to the construction drawings submitted to the Nusantara Capital Authority and the handling of building approval.
(3)	The granting of building approval and certificate of occupancy referred to in paragraph (1) is subject to a cost of IDR0.00 (zero rupiah) for a certain period.
(4)	The specified period referred to in paragraph (3) is stipulated by the Head of the Authority Regulation.
(5)	The validity period of the certificate of occupancy of a building referred to in paragraph (1) is granted for 20 (twenty) years and may be extended according to the occupancy of the building.
(6)	The extension referred to in paragraph (5) is implemented based on an evaluation pursuant to statutory provisions in the building construction sector.
(7)	The building approval and certificate of occupancy referred to in paragraph (1) shall be granted by the Nusantara Capital Authority pursuant to statutory provisions.

Section Three Sectoral Business Permits Article 12
Sectoral Business Permits referred to in Article 7 letter b consist of the following sectors:
a.	marine and fishery;
b.	agriculture;
c.	environmental and forestry;
d.	energy and mineral resources;
e.	nuclear;
f.	industrial;
g.	trading;
h.	public works and public housing;
i.	transportation;
j.	health, medicine and food;
k.	education and culture;
l.	tourism;
m.	religious;
n.	postal, telecommunications, broadcasting as well as electronic systems and transactions;
o.	defence and security;
p.	employment;
q.	finances; and
r.	other sectors constituting a priority determined by the Head of the Authority.

Section Four Verification Article 13
(1)	Verification in the process of the granting of the approval of the basic requirements of Business Permits and/or sectoral Business Permits for certain levels of risk in Nusantara Capital is performed by the Nusantara Capital Authority.
(2)	The Nusantara Capital Authority in performing the verification referred to in paragraph (1) may assign certified or accredited professional institutions or experts.
(3)	The sources of funding for the assignment referred to in paragraph (2) are borne by:
	a.	the state budget; and/or
	b.	other legitimate sources pursuant to statutory provisions.

Article 14
(1)	Based on the verification results referred to in Article 13, the Nusantara Capital Authority grants the approval of Business Permits to Entrepreneurs.
(2)	Entrepreneurs that have obtained the Business Permits referred to in paragraph (1) must submit reports in the form of Investment reports through the OSS System.
(3)	Procedures for the submission of the Investment reports referred to in paragraph (2) comply with statutory provisions in the Investment sector.

Article 15
To support the acceleration of the granting of the approval for the basic requirements of Business Permits referred to in Article 7 letter a and/or sectoral Business Permits referred to in Article 7 letter b, the Business Permit system may be simplified and modernised.

CHAPTER III EASE OF DOING BUSINESS Section One The Granting of the HAT Article 16
(1)	Land in Nusantara Capital is designated as:
	a.	state property; and
	b.	ADP.
(2)	Land designated as state property referred to in paragraph (1) subparagraph a shall be managed by the Nusantara Capital Authority pursuant to statutory provisions.
(3)	Land designated as ADP referred to in paragraph (1) subparagraph b is granted to the Nusantara Capital Authority with HPLs.
(4)	Land that has been granted HPLs referred to in paragraph (3) shall be managed by the Nusantara Capital Authority according to its authority.
(5)	The Nusantara Capital Authority referred to in paragraph (4) is authorised to perform:
	a.	allocation;
	b.	use;
	c.	utilisation;
	d.	transfer; and/or
	e.	release and disposal,
	of assets for the HPLs land portion.

Article 17
(1)	Land allocated by the Nusantara Capital Authority to Entrepreneurs may be given the HAT in the form of the:
	a.	HGU;
	b.	HGB; or
	c.	right to use,
	according to the business allotment.
(2)	The allocation of the HPLs land portion to the Entrepreneurs referred to in paragraph (1) is outlined in the form of an agreement between the Nusantara Capital Authority and the Entrepreneurs.
(3)	The Nusantara Capital Authority guarantees the period of the HGU, HGB or right to use to Entrepreneurs outlined in the agreement.
(4)	If the Nusantara Capital Authority allocates the HPLs land portion to Entrepreneurs:
	a.	the status of the land remains as an asset under the management of the Nusantara Capital Authority; and
	b.	the HAT superseding HPLs is registered under the Entrepreneurs’ names.

Article 18
(1)	The period of the HGU superseding the HPLs of the Nusantara Capital Authority is granted for a maximum of 95 (ninety-five) years through the first 1 (one) cycle with the following stages:
	a.	the granting of the right, for a maximum of 35 (thirty-five) years;
	b.	the extension of the right, for a maximum of 25 (twenty-five) years; and
	c.	the renewal of the right, for a maximum of 35 (thirty-five) years.
(2)	The HGU granted for the first 1 (one) cycle with a maximum period of 95 (ninety-five) years referred to in paragraph (1) is outlined in the decision on the granting of the right and recorded in the HGU certificate.
(3)	Extension and renewal of the HGU referred to in paragraph (1) subparagraph b and subparagraph c shall be granted at once after 5 (five) years the HGU has been used and/or utilised effectively according to the purpose of the granting of the right.
(4)	Within a period of 10 (ten) years before the end of the first cycle of the HGU, Entrepreneurs may apply for the HGU to be re-granted for the second 1 (one) cycle with a maximum period of 95 (ninety-five) years according to the land utilisation agreement referred to in Article 17 paragraph (2).
(5)	The application for the re-granting of the HGU referred to in paragraph (4) is granted if the following criteria are fulfilled:
	a.	the land is being cultivated and utilised properly according to the circumstances, characteristics and the purpose of the granting of the right;
	b.	the right holder continues to fulfil the requirements as a right holder;
	c.	the requirements for the granting of the right are fulfilled properly by the right holder; and
	d.	land utilisation conforms to spatial planning.
(6)	The extension and renewal of the HGU at once referred to in paragraph (3) and the re-granting of the HGU for the second cycle referred to in paragraph (4) shall be granted after a joint evaluation by the Nusantara Capital Authority and the ministry that administers governmental affairs in the agrarian and spatial planning sector.
(7)	The extension and renewal of the HGU at once referred to in paragraph (3) and the re-granting of the HGU for the second cycle referred to in paragraph (4) shall be outlined in the HGU certificate.

Article 19
(1)	The period of the HGB superseding the HPLs of the Nusantara Capital Authority is granted for a maximum of 80 (eighty) years through the first 1 (one) cycle with the following stages:
	a.	the granting of the right, for a maximum of 30 (thirty) years;
	b.	the extension of the right, for a maximum of 20 (twenty) years; and
	c.	the renewal of the right, for a maximum of 30 (thirty) years.
(2)	The HGB granted for the first 1 (one) cycle with a maximum period of 80 (eighty) years referred to in paragraph (1) is outlined in the decision on the granting of the right and recorded in the HGB certificate.
(3)	Extension and renewal of the HGB referred to in paragraph (1) subparagraph b and subparagraph c shall be granted at once after 5 (five) years the HGB has been used and/or utilised effectively according to the purpose of the granting of the right.
(4)	If the period of the granting of the HGB for the first cycle referred to in paragraph (1) will expire, the HGB may be re-granted for the second 1 (one) cycle if agreed upon.
(5)	The extension and renewal of the HGB at once referred to in paragraph (3) and the re-granting of the HGB for the second cycle referred to in paragraph (4) shall be granted after a joint evaluation by the Nusantara Capital Authority and the ministry that administers governmental affairs in the agrarian and spatial planning sector and outlined in the agreement.
(6)	If for the HGB referred to in paragraph (1), property is built for residential purposes and transferred to the community, the following provisions shall apply:
	a.	for landed houses, the HGB may be upgraded to the ownership right; or
	b.	for flats, the ownership right shall be granted for flat units,
	after obtaining approval from the Nusantara Capital Authority.
(7)	The HGB is upgraded to the ownership right as referred to in paragraph (6) subparagraph a after the Nusantara Capital Authority disposes of ADP through the waiver of HPLs pursuant to statutory provisions.

Article 20
(1)	The period of the right to use superseding the HPLs of the Nusantara Capital Authority is granted for a maximum of 80 (eighty) years through the first 1 (one) cycle with the following stages:
	a.	the granting of the right, for a maximum of 30 (thirty) years;
	b.	the extension of the right, for a maximum of 20 (twenty) years; and
	c.	the renewal of the right, for a maximum of 30 (thirty) years.
(2)	The right to use granted for the first 1 (one) cycle with a maximum period of 80 (eighty) years referred to in paragraph (1) is outlined in the decision on the granting of the right and recorded in the right to use certificate.
(3)	Extension and renewal of the right to use referred to in paragraph (1) subparagraph b and subparagraph c shall be granted at once after 5 (five) years the right to use has been used and/or utilised effectively according to the purpose of the granting of the right.
(4)	If the period of the granting of the right to use for the first cycle referred to in paragraph (1) will expire, the right to use may be re-granted for the second 1 (one) cycle if agreed upon.
(5)	The extension and renewal of the right to use at once referred to in paragraph (3) and the re-granting of the right to use for the second cycle referred to in paragraph (4) shall be granted after a joint evaluation by the Nusantara Capital Authority and the ministry that administers governmental affairs in the agrarian and spatial planning sector and outlined in the agreement.
(6)	Residential houses for foreigners are granted the right to use referred to in paragraph (1).

Article 21
(1)	The granting of the HAT in the form of the HGU, the HGB or the right to use superseding the HPLs is subject to the BPHTB at a rate of 0% (zero percent) of the acquisition value for a certain period.
(2)	The HAT referred to in paragraph (1) may be transferred, inherited or encumbered with encumbrance after obtaining approval from the Nusantara Capital Authority.
(3)	The party receiving the transfer of the HAT referred to in paragraph (2) is subject to the BPHTB at a rate of 0% (zero percent) for a certain period.
(4)	Provisions on the imposition of the BPHTB referred to in paragraph (1) and paragraph (3) are stipulated in a Head of the Authority Regulation.

Section Two Foreign Workers Article 22
(1)	Entrepreneurs conducting business in the Nusantara Capital territory may employ foreign workers for certain positions pursuant to statutory provisions.
(2)	For the Foreign workers referred to in paragraph (1), the foreign worker employment plan may be validated for a period of 10 (ten) years and may be extended.
(3)	Entrepreneurs employing foreign workers referred to in paragraph (1), including Entrepreneurs conducting government-owned strategic projects in Nusantara Capital are exempt from the obligation to pay remuneration funds for the employment of foreign workers for a certain period.
(4)	The obligation to pay remuneration funds for the employment of foreign workers for government agencies, representatives of foreign countries, international bodies, social institutions, religious institutions or certain positions in educational institutions is exempt pursuant to statutory provisions.
(5)	The certain period for the exemption from the obligation to pay remuneration funds for the employment of foreign workers referred to in paragraph (3) are stipulated by the Head of the Authority Regulation.

Article 23
(1)	Foreign workers referred to in Article 22 paragraph (2) may be granted a stay permit for a maximum period of 10 (ten) years pursuant to statutory provisions.
(2)	If the period for the granting of the stay permit referred to in paragraph (1) will expire, the period for the granting of the stay permit may be extended according to the period of the work agreement between the Entrepreneurs and foreign workers.
(3)	Shareholders serving as the managers of a company are granted a stay permit insofar as they serve as the managers of the company pursuant to statutory provisions.

Section Three Housing and Residential Areas Article 24
(1)	In setting the detailed spatial planning of Nusantara Capital referred to in Article 9 paragraph (2), zoning is stipulated for housing and residential areas in the Nusantara Capital territory.
(2)	The implementation of housing and residential areas referred to in paragraph (1) takes into account the zoning of:
	a.	simple housing;
	b.	middle housing; and
	c.	real estate.
(3)	Foreigners are prohibited from purchasing, owning and/or controlling simple housing referred to in paragraph (2) subparagraph a, the acquisition of which receives aid and/or housing financing facilities from the government.

Article 25
(1)	To accelerate the construction and provision of housing and residential areas for the community in Nusantara Capital, Entrepreneurs in the housing and residential areas that have not been able to fulfil the obligations of balanced housing in other areas, may be implemented in the Nusantara Capital territory.
(2)	Balanced housing is fulfilled by the Entrepreneurs as referred to in paragraph (1) through an application to the Head of the Authority with the following options:
	a.	constructing balanced housing in the Nusantara Capital territory; or
	b.	paying conversion funds for the fulfilment of balanced housing.
(3)	The application to the Head of the Authority referred to in paragraph (2) shall be submitted by attaching an independent statement of the balanced housing obligation.
(4)	A copy of the application referred to in paragraph (3) is sent to the minister who administers governmental affairs in the field of public housing and the minister who administers domestic governmental affairs.
(5)	In respect of the Entrepreneurs’ application referred to in paragraph (3), the Head of the Authority coordinates with the minister who administers governmental affairs in the field of public housing and the minister who administers domestic governmental affairs.
(6)	Based on the considerations of the fulfilment of the balanced housing obligation from the results of the coordination referred to in paragraph (5), the Head of the Authority determines the implementation of the fulfilment of the balanced housing obligation according to the development priorities of housing and residential areas in the Nusantara Capital territory.
(7)	The Head of the Authority periodically submits reports on the implementation of the fulfilment of the balanced housing obligation at least once every 1 (one) year to the minister who administers governmental affairs in the field of public housing and the minister who administers domestic governmental affairs.

CHAPTER IV INVESTMENT INCENTIVES Section One General Article 26
(1)	Investment Facilities include all forms of fiscal and non-fiscal incentives, as:
	a.	the central government’s authority, which includes:
		1.	Income Tax;
		2.	Value Added Tax and/or Sales Tax on Luxury Goods; and/or
		3.	customs.
	b.	the Nusantara Capital Authority’s authority, which includes:
		1.	special tax facilities and special revenues of Nusantara Capital; and
		2.	facilitation, provision of land, means and infrastructure for the implementation of Investments in Nusantara Capital.
(2)	Investment Facilities referred to in paragraph (1) are granted by the minister who administers governmental affairs in the field of state finances.
(3)	Investment Facilities referred to in paragraph (1) subparagraph a are granted through the OSS System or electronic channels available at the Ministry of Finance.

Section Two Income Tax Facilities Paragraph 1 General Article 27
(1)	Income Tax Facilities referred to in Article 26 paragraph (1) subparagraph a number 1 provided in Nusantara Capital are in the form of the following facilities:
	a.	the corporate Income Tax reduction for resident corporate Taxpayers;
	b.	Income Tax on financial sector activities in the Financial Center;
	c.	the corporate Income Tax reduction for the incorporation and/or relocation of the head office and/or regional offices;
	d.	the gross income reduction for the implementation of job training, internships and/or apprenticeships in the context of fostering and developing certain-competency-based human resources;
	e.	the gross income reduction for certain research and development;
	f.	the gross income reduction for donations and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities;
	g.	government-borne final Article 21 Income Tax;
	h.	0% (zero percent) final Income Tax on income from the certain gross business turnover for micro, small and medium enterprises; and
	i.	the Income Tax reduction on the transfer of rights to land and/or buildings.
(2)	Income Tax Facilities referred to in Article 26 paragraph (1) subparagraph a number 1 granted in Partner Regions are in the form of the corporate Income Tax reduction facility for resident corporate Taxpayers.

Paragraph 2 Corporate Income Tax Reduction Facility for Resident Taxpayers Article 28
(1)	Resident corporate Taxpayers performing Investments in Nusantara Capital are given the corporate Income Tax reduction facility referred to in Article 27 paragraph (1) subparagraph a.
(2)	The corporate Income Tax reduction facility referred to in paragraph (1) are provided for an Investment value of a minimum of IDR10,000,000,000.00 (ten billion rupiah).
(3)	Investments eligible for the facilities referred to in paragraph (1) are Investments in business sectors with strategic values to accelerate the construction and development of Nusantara Capital which include:
	a.	public infrastructure and services;
	b.	economic revival; and
	c.	other business sectors.
(4)	Public infrastructure and services referred to in paragraph (3) subparagraph a may be in the form of:
	a.	power stations, including new and renewable energy;
	b.	the construction and operation of toll roads;
	c.	the construction and operation of seaports;
	d.	the construction and operation of airports;
	e.	the development and provision of clean water;
	f.	the construction and operation of health facilities;
	g.	the construction and operation of educational units;
	h.	the development and provision of telecommunication and informatics infrastructure;
	i.	the construction and management of urban forests;
	j.	the construction of housing, residential and office areas;
	k.	the development and management of wastewater;
	l.	the construction and management of underground utility network systems;
	m.	the construction and operation of industrial and science parks;
	n.	the construction and operation of people’s markets;
	o.	the provision of public transportation;
	p.	the construction and operation of passenger or goods transport vehicle terminals; and
	q.	the construction and operation of stadiums/sports facilities.
(5)	The economic revival referred to in paragraph (3) subparagraph b may be in the form of:
	a.	the construction and operation of shopping centres (malls);
	b.	the provision of tourism facilities and accommodation/star-hotel services;
	c.	the provision of Meetings, Incentive, Convention and Exhibition (MICE) facilities; and
	d.	refueling and/or battery charging stations for electric vehicles.
(6)	Other business sectors referred to in paragraph (3) subparagraph c may be in the form of:
	a.	agricultural cultivation and/or urban fishery;
	b.	value-added industry and/or industrial engineering;
	c.	hardware and/or software industry;
	d.	trading services;
	e.	construction services;
	f.	real estate brokerage services; and
	g.	tourism services and creative economy.
(7)	Other business sectors for trading services referred to in paragraph (6) subparagraph d, construction services referred to in paragraph (6) subparagraph e and real estate brokerage services referred to in paragraph (6) subparagraph f are services located and earn business income in Nusantara Capital.
(8)	Changes in the scope of the public infrastructure and services business sector referred to in paragraph (4), the economic revival business sector referred to in paragraph (5) and other business sectors referred to in paragraph (6), are implemented by the minister who administers governmental affairs in the field of state finances based on the proposal of the Head of the Authority.
(9)	Provisions on changes to the scope of business sectors referred to in paragraph (8) are stipulated by a regulation of the minister who administers governmental affairs in the field of state finances.
(10)	Provisions on the details of each scope of the business sectors referred to in paragraph (4), paragraph (5) and paragraph (6) are stipulated by a Head of the Authority Regulation after coordinating with the relevant ministries/agencies.

Article 29
(1)	The corporate Income Tax reduction referred to in Article 28 paragraph (1) is given by 100% (one hundred percent) of the total corporate Income Tax payable.
(2)	The corporate Income Tax reduction for the public infrastructure and service business sector referred to in Article 28 paragraph (3) subparagraph a, is granted for:
	a.	30 (thirty) tax years, for Investments performed from 2023 to 2030;
	b.	25 (twenty-five) tax years, for Investments performed from 2031 to 2035; and
	c.	20 (twenty) tax years, for Investments performed from 2036 to 2045.
(3)	The corporate Income Tax reduction for the economic revival business sector referred to in Article 28 paragraph (3) subparagraph b is granted for:
	a.	20 (twenty) tax years, for Investments performed from 2023 to 2030;
	b.	15 (fifteen) tax years, for Investments performed from 2031 to 2035; and
	c.	10 (ten) tax years, for Investments performed from 2036 to 2045.
(4)	The corporate Income Tax reduction for other business sectors referred to in Article 28 paragraph (3) subparagraph c is granted for:
	a.	10 (ten) tax years, for Investments performed from 2023 to 2030; and
	b.	10 (ten) tax years, for Investments performed from 2031 to 2045.
(5)	Excluded from the provisions of paragraph (1) for the corporate Income Tax reduction for other business sectors granted for 10 (ten) tax years referred to in paragraph (4) subparagraph b, the corporate Income Tax reduction is granted by 50% (fifty percent) of the percentage of the Income Tax reduction referred to in paragraph (1).
(6)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	procedures for the application for approval;
	c.	procedures for the granting of the decision on approval;
	d.	procedures for the applications for utilisation;
	e.	procedures for the granting of the decision on utilisation;
	f.	obligations and prohibitions for eligible Taxpayers; and
	g.	criteria for revocation,
	of the corporate Income Tax reduction facility in Nusantara Capital are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 30
(1)	Resident corporate Taxpayers performing Investments in Partner Regions are granted the corporate Income Tax reduction facility referred to in Article 27 paragraph (2).
(2)	The corporate Income Tax reduction facility referred to in paragraph (1) is granted for an Investment value of a minimum of IDR10,000,000,000.00 (ten billion rupiah).
(3)	Investments eligible for the facilities referred to in paragraph (1) are Investments in the public infrastructure and services business sector which may be in the form of:
	a.	power stations, including new and renewable energy;
	b.	the construction and operation of toll roads;
	c.	the construction and operation of seaports;
	d.	the construction and operation of airports; and
	e.	the construction and supply of clean water.

Article 31
(1)	The corporate Income Tax reduction referred to in Article 30 paragraph (1) is granted by 100% (one hundred percent) of the total corporate Income Tax payable.
(2)	The corporate Income Tax reduction for the public infrastructure and services business sector referred to in Article 30 paragraph (3), is granted for:
	a.	25 (twenty-five) tax years, for Investments performed from 2023 to 2030;
	b.	20 (twenty) tax years, for Investments performed from 2031 to 2035; and
	c.	15 (fifteen) tax years, for Investments performed from 2036 to 2045.
(3)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	procedures for the application for approval;
	c.	procedures for the granting of the decision on approval;
	d.	procedures for the applications for utilisation;
	e.	procedures for the granting of the decision on utilisation;
	f.	obligations and prohibitions for eligible Taxpayers; and
	g.	criteria for revocation,
	of the corporate Income Tax reduction facility in Partner Regions are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 3 Income Tax Facilities for Financial Sector Activities in the Financial Center Article 32
(1)	Resident corporate Taxpayers and permanent establishments conducting financial sector business at the Nusantara Capital Financial Center, are given the corporate Income Tax reduction facility referred to in Article 27 paragraph (1) subparagraph b with a certain percentage and period.
(2)	Financial sector businesses at the Nusantara Capital Financial Center referred to in paragraph (1) include the following businesses:
	a.	banking;
	b.	insurance;
	c.	sharia finances;
	d.	capital markets, financial derivatives and carbon exchanges;
	e.	pension funds;
	f.	financing;
	g.	venture capital;
	h.	financial sector technological innovations;
	i.	guarantees;
	j.	international commodity trading;
	k.	bullion;
	l.	trusts;
	m.	special purpose vehicles;
	n.	financial holding companies;
	o.	financial market infrastructure;
	p.	money market, foreign exchange market and the derivative transactions thereto;
	q.	the operation of payment system services; and/or
	r.	other financial services.
(3)	Resident corporate Taxpayers and permanent establishments conducting financial sector business at the Nusantara Capital Financial Center referred to in paragraph (2) subparagraph a, subparagraph b and subparagraph c are given the corporate Income Tax reduction facility by 100% (one hundred percent) of the amount of corporate Income Tax payable on the share of income used for investment or financing the construction, development and economic activities in Nusantara Capital and/or Partner Regions.
(4)	The corporate Income Tax reduction facility for the financial sector referred to in paragraph (3) is granted for:
	a.	25 (twenty-five) tax years, for Investments performed from 2023 until 2035; and
	b.	20 (twenty) tax years, for Investments performed from 2036 until 2045.
(5)	Resident corporate Taxpayers and permanent establishments conducting financial sector business at the Nusantara Capital Financial Center referred to in paragraph (2) subparagraph d to subparagraph r, are given the corporate Income Tax reduction facility by 85% (eighty-five percent) of the amount of corporate Income Tax payable on:
	a.	the share of income sourced from foreign investors, for the financial sectors referred to in paragraph (2) subparagraph d and subparagraph j; or
	b.	the share of income sourced from Entrepreneurs and/or the community located in the Nusantara Capital territory, for the financial sectors referred to in paragraph (2) subparagraph e, subparagraph f, subparagraph g, subparagraph h, subparagraph i, subparagraph k, subparagraph l, subparagraph m, subparagraph n, subparagraph o, subparagraph p, subparagraph q and subparagraph r.
(6)	The corporate Income Tax reduction facility for the financial sectors referred to in paragraph (5) is granted for:
	a.	25 (twenty-five) tax years, for Investments performed from 2023 until 2035; and
	b.	20 (twenty) tax years, for Investments performed from 2036 until 2045.
(7)	Provisions on financial sector business at the Financial Center referred to in paragraph (2) are stipulated by a regulation of the authorities in the financial sector.
(8)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	procedures for the application for approval;
	c.	procedures for the granting of the decision on approval;
	d.	procedures for the applications for utilisation;
	e.	procedures for the granting of the decision on utilisation;
	f.	obligations and prohibitions for eligible Taxpayers; and
	g.	criteria for revocation,
	of the corporate Income Tax reduction facility for resident corporate Taxpayers and permanent establishments conducting financial sector business at the Nusantara Capital Financial Center are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 33
(1)	Income sourced from investments at the Nusantara Capital Financial Center received or accrued by non tax residents is exempt from the withholding and/or collection of Income Tax for a period of 10 (ten) years from the first placement of funds at the Nusantara Capital Financial Center.
(2)	Provisions on the granting of the exemption from the withholding and/or collection of Income Tax referred to in paragraph (1) are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 34
(1)	Financial sectoral Business Permits in the Financial Center referred to in Article 32 in the Nusantara Capital territory, including the Financial Center area, are issued by authorities in the financial sector.
(2)	The Financial Center area referred to in paragraph (1) is determined by the Head of the Authority which is listed in the detailed spatial planning.
(3)	Entrepreneurs conducting Financial Center activities.
	a.	must ensure the confidentiality of data;
	b.	may perform placement and management in foreign currencies pursuant to statutory provisions; and
	c.	may use and pay in digital financial forms with technological support pursuant to statutory provisions.
(4)	Permits and businesses for financial sector Entrepreneurs that obtain Business Permits from the authorities in the financial sector referred to in paragraph (1) are supervised by the authorities in the financial sector according to their authority.
(5)	Penalties in the context of supervision on Entrepreneurs in the financial sector that obtain Business Permits from the authorities in the financial sector referred to in paragraph (4) are imposed by the authorities in the financial sector according to their authority.

Paragraph 4 Corporate Income Tax Reduction Facility for the Incorporation and/or Relocation of the Head Office and/or Regional Offices Article 35
(1)	Entrepreneurs of the non tax resident status that establish and/or relocate their head office and/or regional offices to Nusantara Capital are granted the corporate Income Tax reduction facility referred to in Article 27 paragraph (1) subparagraph c.
(2)	The corporate Income Tax reduction facility referred to in paragraph (1) is granted with the following provisions:
	a.	having a minimum of 2 (two) affiliated units and/or related business entities outside Indonesia;
	b.	having economic substance in Nusantara Capital; and
	c.	establishing a legal entity in the form of a limited liability company in Indonesia.
(3)	Affiliates and/or related business entities outside Indonesia referred to in paragraph (2) subparagraph a are subsidiaries, business branches, joint ventures or other similar entities.
(4)	Resident Taxpayers that establish their head office and/or regional offices in Nusantara Capital are granted the corporate Income Tax reduction facility referred to in Article 27 paragraph (1) subparagraph c for income received or accrued from Entrepreneurs in Nusantara Capital or the community in Nusantara Capital.
(5)	The corporate Income Tax reduction facility referred to in paragraph (4) is granted with the following provisions:
	a.	having economic substance in Nusantara Capital; and
	b.	establishing a legal entity in the form of a limited liability company in Indonesia.
(6)	The corporate Income Tax reduction facility referred to in paragraph (1) and paragraph (4) are granted until 2045.

Article 36
(1)	The corporate Income Tax reduction facility referred to in Article 35 are granted by 100% (one hundred percent) of the total corporate Income Tax payable.
(2)	The corporate Income Tax reduction facility referred to in paragraph (1) are granted for 10 (ten) tax years.
(3)	After the period of the granting of the corporate Income Tax reduction referred to in paragraph (2) expires, the Taxpayers are granted a corporate Income Tax reduction of 50% (fifty percent) of the total corporate Income Tax payable for the next 10 (ten) tax years.
(4)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	procedures for the application for approval;
	c.	procedures for the granting of the decision on approval;
	d.	procedures for the applications for utilisation;
	e.	procedures for the granting of the decision on utilisation;
	f.	obligations and prohibitions for eligible Taxpayers; and
	g.	criteria for revocation,
	of the corporate Income Tax reduction facility for the establishment and/or relocation of the head office and/or regional offices are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 5 The Granting of the Approval, Utilisation, Obligation, Prohibitions and Revocation of Facilities Article 37
(1)	Approval for the corporate Income Tax reduction facility referred to in Article 29 paragraph (1), Article 31 paragraph (1), Article 32 paragraph (1), Article 35 paragraph (1) and Article 35 paragraph (4) is granted based on a decree of the minister who administers governmental affairs in the field of state finances.
(2)	To obtain approval for the corporate Income Tax reduction facility referred to in paragraph (1), the Taxpayers must apply:
	a.	before the commencement of commercial operations, for Taxpayers applying for the corporate Income Tax reduction facility referred to in Article 29 paragraph (1), Article 31 paragraph (1) or Article 32 paragraph (1); or
	b.	no later than 30 (thirty) days after the tax year of the incorporation and/or relocation of the Taxpayers’ head office and/or regional office ends, for Taxpayers applying for the corporate Income Tax reduction facility referred to in Article 35 paragraph (1) or Article 35 paragraph (4).
(3)	The application referred to in paragraph (2) is submitted through the OSS System.
(4)	The authority to approve the corporate Income Tax reduction facility referred to in paragraph (1) is delegated in the form of a mandate by the minister who administers governmental affairs in the field of state finances to the minister who administers governmental affairs in the field of investment/investment coordination.

Article 38
(1)	The corporate Income Tax reduction facility referred to in Article 29 paragraph (1), Article 31 paragraph (1), Article 32 paragraph (1), Article 35 paragraph (1) or Article 35 paragraph (4) begin to be utilised by Taxpayers as of the tax year the commercial operations commence.
(2)	The utilisation of the corporate Income Tax reduction facility referred to in paragraph (1) is stipulated by the minister who administers governmental affairs in the field of state finances based on the findings of a field audit conducted by the Director General of Taxes.
(3)	The Director General of Taxes conducts the field audit referred to in paragraph (2) after receiving an application for the utilisation of the corporate Income Tax reduction facility from the Taxpayers.
(4)	The Director General of Taxes conducts the field audit referred to in paragraph (3) pursuant to statutory provisions.
(5)	The minister who administers governmental affairs in the field of state finances delegates authority to determine the utilisation of the corporate Income Tax reduction facility referred to in paragraph (2) in the form of the delegation to the Head of the Regional Office of the Directorate General of Taxes whose working area covers Nusantara Capital.
(6)	The Director General of Taxes delegates authority to:
	a.	receive the application for the utilisation of the corporate Income Tax reduction facility; and
	b.	conduct a field audit, referred to in paragraph (3),
	in the form of the delegation to the Head of the Regional Office of the Directorate General of Taxes whose working area includes Nusantara Capital.
(7)	The application for the utilisation of the corporate Income Tax reduction facility referred to in paragraph (3) shall be submitted after the commencement of commercial operations.
(8)	The application for the utilisation of the corporate Income Tax reduction facility referred to in paragraph (3) shall be submitted by Taxpayers through the OSS System.

Article 39
(1)	Taxpayers that have obtained the corporate Income Tax reduction facility referred to in Article 29 paragraph (1), Article 31 paragraph (1) or Article 32 paragraph (1) must:
	a.	realise the Investment plans no later than 2 (two) years after the approval for the corporate Income Tax reduction facility referred to in Article 37 paragraph (1) is issued;
	b.	submit the Investment realisation report and business realisation report;
	c.	maintain separate bookkeeping between Investments eligible for the corporate Income Tax reduction facility and those not eligible for the corporate Income Tax reduction facility; and
	d.	withhold and collect Income Tax pursuant to statutory provisions in the field of Income Tax.
(2)	Taxpayers that have obtained the corporate Income Tax reduction facility referred to in Article 35 paragraph (1) or Article 35 paragraph (4) must:
	a.	start the realisation of the relocation of the head office and/or regional offices no later than 1 (one) year after the approval for the corporate Income Tax reduction facility referred to in Article 37 paragraph (1) is issued;
	b.	submit a report on the realisation of the incorporation and/or relocation of the head office and/or regional offices;
	c.	maintain separate bookkeeping between Investments eligible for the corporate Income Tax reduction facility and those not eligible for the corporate Income Tax reduction facility; and
	d.	withhold and collect Income Tax pursuant to statutory provisions in the field of Income Tax.

Article 40
Taxpayers that have obtained the corporate Income Tax reduction facility referred to in Article 29 paragraph (1) or Article 31 paragraph (1) are prohibited from:
a.	importing, purchasing or acquiring used capital goods, for the realisation of Investments eligible for the corporate Income Tax reduction facility unless the said used capital goods are parts of machinery and equipment required for the implementation of investments in the health, research and innovation and construction sectors in Nusantara Capital and Partner Regions;
b.	using capital goods eligible for the corporate Income Tax reduction facility other than to provide the facilities during the utilisation period of the corporate Income Tax reduction facility for the implementation of investments in Nusantara Capital and/or Partner Regions;
c.	transferring capital goods eligible for the corporate Income Tax reduction facility for the utilisation period of the corporate Income Tax reduction facility unless the transfer does not result in the realised value of the Investments being lower than the investment value threshold referred to in Article 28 paragraph (2) and Article 30 paragraph (2) and:
	1.	is performed to increase efficiency; and/or
	2.	is an obligation that must be fulfilled pursuant to statutory provisions;
	or
d.	relocating Investments outside of Nusantara Capital and/or Partner Regions.

Article 41
(1)	If the Taxpayers that have obtained the corporate Income Tax reduction facility referred to in Article 29 paragraph (1), Article 31 paragraph (1), Article 32 paragraph (1), Article 35 paragraph (1) or Article 35 paragraph (4):
	a.	do not fulfil the provisions referred to in Article 39 paragraph (1) subparagraph a or paragraph (2) subparagraph a;
	b.	violate the provisions referred to in Article 40;
	c.	have been operating commercially upon the submission of the application for the corporate Income Tax reduction; and/or
	d.	there is non-conformity between the realisation and the main business plans,
	are subject to administrative penalties in the form of the revocation of the granted corporate Income Tax reduction facility.
(2)	For Taxpayers subject to the revocation of the corporate Income Tax reduction facility referred to in paragraph (1), the corporate Income Tax reduction that has been utilised must be repaid and subject to administrative penalties pursuant to statutory provisions in the field of taxation.

Paragraph 6 Gross Income Reduction Facility for the Implementation of Job Training, Internships and/or Apprenticeships for the Fostering and Development of Certain Competency-Based Human Resources Article 42
(1)	Resident corporate Taxpayers that organise and/or involve human resources in education and/or training in Nusantara Capital for job training, internships and/or apprenticeships in the context of fostering and developing certain competency-based human resources are granted the gross income reduction facilities referred to in Article 27 paragraph (1) subparagraph d.
(2)	The gross income reduction facilities referred to in paragraph (1) are granted by a maximum of 250% (two hundred and fifty percent) of the total costs incurred for job training, internships and/or apprenticeships.
(3)	Job training and/or internships referred to in paragraph (1) are activities that may be attended by:
	a.	students, educators and/or education staff at vocational high schools or vocational madrasah aliyah;
	b.	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 do not have an employment relationship with any party coordinated by the ministry that administers governmental affairs in the field of manpower, the Nusantara Capital Authority, the provincial governments or regency/municipal governments,
	as part of the occupational or vocational education curriculum in the context of mastering skills or expertise in a particular field.
(4)	Apprenticeship referred to in paragraph (1) is teaching activities carried out by parties assigned by the Taxpayers to teach at vocational high schools, vocational madrasah aliyah, diploma program colleges in vocational education and/or job training centres located in the Nusantara Capital territory.
(5)	The competence for job training, internships and/or apprenticeships referred to in paragraph (1) shall be determined by the Head of the Authority.
(6)	To obtain the gross income reduction facilities referred to in paragraph (1), Taxpayers must apply through the OSS System.
(7)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	the forms of eligible job training and/or internships as well as apprenticeships;
	c.	the types of eligible job training, internship and/or apprenticeship costs;
	d.	the mechanisms for the calculation of the amount;
	e.	procedures for the application;
	f.	obligations for the utilising Taxpayers; and
	g.	criteria for revocation; and
	h.	period of the granting,
	of the gross income reduction facilities for the implementation of job training, internships and/or apprenticeships in the context of fostering and developing certain competency-based human resources in Nusantara Capital are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 43
The gross income reduction facilities referred to in Article 42 are granted until 2035.

Paragraph 7 Gross Income Reduction Facility for Certain Research and Development Article 44
(1)	Resident corporate Taxpayers with domiciles and/or places of business conducting certain research and development in Nusantara Capital, are granted the gross income reduction facilities referred to in Article 27 paragraph (1) subparagraph e.
(2)	The gross income reduction facilities referred to in paragraph (1) are granted by a maximum of 350% (three hundred and fifty percent) of the total costs incurred for certain research and development that are expensed within a certain period.
(3)	Certain research and development referred to in paragraph (1) are research and development conducted in Nusantara Capital to produce inventions, develop innovations, control new technologies and/or transfer technologies for industrial development to increase the competitiveness of national industries.
(4)	To obtain the gross income reduction facilities referred to in paragraph (1), Taxpayers must apply through the OSS System.
(5)	The gross income reduction facilities referred to in paragraph (1) are provided until 2035.
(6)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	the forms of eligible research and development;
	c.	the types of eligible research and development;
	d.	the mechanisms for the calculation of the amount;
	e.	procedures for the application for approval;
	f.	obligations for the utilising Taxpayers; and
	g.	criteria for revocation; and
	h.	period of the granting,
	of the gross income reduction facilities for certain research and development in Nusantara Capital are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 8 Gross Business Income Reduction for Donations and/or Expenses for the Construction of Public Facilities, Social Facilities and/or Other Non-Profit Facilities Article 45
(1)	Resident Taxpayers that provide donations and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities in the Nusantara Capital territory are granted the gross income reduction facilities referred to in Article 27 paragraph (1) subparagraph f.
(2)	The gross income reduction facilities referred to in paragraph (1) are granted in the form of the gross income reduction for the calculation of taxable income for Taxpayers up to a certain amount of a maximum of 200% (two hundred percent) of the total donations and/or expenses incurred for the construction of public facilities, social facilities and/or other non-profit facilities.
(3)	Donations and/or expenses referred to in paragraph (1) are provided in the form of money, in kind and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities.
(4)	Donations and/or expenses referred to in paragraph (1) are deducted from the gross income provided that:
	a.	the Taxpayers have net fiscal income based on the annual Income Tax return for the previous tax year;
	b.	the donations and/or expenses do not result in a loss in the tax year the donations and/or expenses are provided;
	c.	supported by valid evidence; and
	d.	obtaining technical approval and specifications from the Nusantara Capital Authority if the donations are given in kind and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities.
(5)	The gross income reduction facilities for donations and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities referred to in paragraph (1) are granted until 2035.
(6)	The utilisation of donations and/or expenses provided for the construction of public facilities, social facilities and/or other non-profit facilities referred to in paragraph (1) shall be determined by the Head of the Authority.

Article 46
Donations and/or expenses referred to in Article 45 cannot be deducted from the donor’s gross income if the donations and/or expenses are used to construct public facilities, social facilities and/or other non-profit facilities as the obligation of the business providing the donations and/or expenses in the Nusantara Capital territory.

Article 47
(1)	The value of donations and/or expenses in the form of money referred to in Article 45 paragraph (3) is determined based on the nominal amount of the donated money.
(2)	The value of donations and/or expenses in kind referred to in Article 45 paragraph (3) is determined based on:
	a.	the acquisition value, for donated goods that have not been depreciated;
	b.	the fiscal value, for donated goods that have been depreciated; or
	c.	the cost of goods sold, for donated goods that are self-produced.
(3)	The value of donations and/or expenses in the form of expenses for the construction of public facilities, social facilities and/or other non-profit facilities referred to in Article 45 paragraph (3) is determined based on the amount actually incurred to construct public facilities, social facilities and/or other non-profit facilities.

Article 48
(1)	Donations and/or expenses referred to in Article 45 paragraph (1) must be recorded according to their designation by the donor and/or expenses.
(2)	The Head of the Authority must submit a report on the receipt of donations and/or expenses to the Director General of Taxes no later than 30 (thirty) days after the end of the tax year the donations and/or expenses are received.

Article 49
(1)	To obtain facilities for donations and/or expenses referred to in Article 45 paragraph (1), Taxpayers must apply through the OSS System or electronic channels available at the Ministry of Finance.
(2)	If the OSS System or electronic channels at the Ministry of Finance are not yet available, the application referred to in paragraph (1) may be submitted offline to the Head of the Authority with a copy to the Director General of Taxes.
(3)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	forms of eligible donations and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities;
	c.	the mechanisms for the calculation of the amount;
	d.	procedures for the application for approval;
	e.	procedures for the application for utilisation;
	f.	obligations for the utilising Taxpayers; and
	g.	reporting obligation of the Nusantara Capital Authority;
	h.	criteria for revocation; and
	i.	period of the granting,
	of the gross income reduction facilities for donations and/or expenses for the construction of public facilities, social facilities and/or other non-profit facilities in Nusantara Capital are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 9 Government-Borne Final Article 21 Income Tax Facilities Article 50
(1)	Income received or accrued by employees in respect of employment must be subject to Withholding Tax by the employer pursuant to the provisions under Article 21 of Law Number 7 of 1983 concerning Income Tax and the amendments thereto.
(2)	Article 21 Income Tax referred to in paragraph (1) on income received by certain employees is granted facilities in the form of government-borne final Income Tax referred to in Article 27 paragraph (1) subparagraph g.
(3)	Certain employees referred to in paragraph (2) are employees who:
	a.	receive or accrue income from certain employers;
	b.	reside in the Nusantara Capital territory; and
	c.	have a Taxpayer Identification Number registered at the tax office whose working area covers the Nusantara Capital territory.
(4)	Provisions on Article 21 Withholding Tax referred to in paragraph (2) on the income of certain employees referred to in paragraph (3) shall be implemented pursuant to statutory tax provisions.
(5)	Article 21 Income Tax referred to in paragraph (2) must be paid in cash by the employer upon the payment of income to employees.
(6)	Government-borne Final Article 21 Income tax received by employees from the employer referred to in paragraph (5) is not taken into account as taxable income.
(7)	Excluded from the imposition of government-borne final Article 21 Income Tax referred to in paragraph (2) if:
	a.	the income recipients are state officials, civil servants, members of the Indonesian National Armed Forces and members of the Indonesian National Police;
	b.	income is sourced from the state budget or local government budget; and
	c.	Article 21 Income Tax has been borne by the government pursuant to statutory tax provisions.
(8)	Income received by state officials, civil servants, members of the Indonesian National Armed Forces and members of the Indonesian National Police subject to final Article 21 Income Tax pursuant to statutory tax provisions may be granted government-borne Article 21 Income Tax facilities referred to in paragraph (2).

Article 51
(1)	Certain employees referred to in Article 50 paragraph (3) must file annual individual Income Tax returns pursuant to statutory tax provisions.
(2)	Income received or accrued by certain employees other than income received in respect of employment remains subject to Income Tax pursuant to statutory provisions in the field of Income Tax, including income sourced from outside the Nusantara Capital territory.

Article 52
(1)	Certain employers referred to in Article 50 paragraph (3) subparagraph a are employers that fulfil the following provisions:
	a.	residing, domiciled or having a place of business in the Nusantara Capital territory;
	b.	having a Taxpayer Identification Number registered at a tax office whose working area covers the Nusantara Capital territory or having tax identification at the place of business in the Nusantara Capital territory;
	c.	having submitted a notice of the utilisation of the government-borne final Article 21 Income Tax facilities to the Director General of Taxes and having received validation from the Director General of Taxes; and
	d.	having submitted a realisation report on the utilisation of government-borne final Article 21 Income Tax facilities to the Director General of Taxes.
(2)	Employers referred to in paragraph (1) must:
	a.	prepare the withholding receipt of government-borne final Article 21 Income Tax; and
	b.	file the withholding receipt in the periodic Article 21 Income Tax returns.
(3)	The notice of the utilisation of the government-borne final Article 21 Income Tax facilities referred to in paragraph (1) subparagraph c and the realisation report on the utilisation of government-borne final Article 21 Income Tax facilities referred to in paragraph (1) subparagraph d shall be submitted through electronic channels available at the Ministry of Finance.

Article 53
Government-borne Final Article 21 Income Tax referred to in Article 50 paragraph (2) is applicable until 2035.

Article 54
The implementation and accountability of government-borne Article 21 Income Tax referred to in Article 50 paragraph (2) shall be carried out pursuant to statutory laws and regulations stipulating the mechanisms for the implementation and accountability of government-borne taxes.

Article 55
Provisions on:
a.	the application; and
b.	procedures for the submission of the application, issuance, cancellation or revocation of approval and reporting,
of the utilisation of government-borne final Article 21 Income Tax facilities are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 10 Final 0% (Zero Percent) Income Tax Facilities on Income from Certain Gross Business Turnover in Micro, Small and Medium Enterprises Article 56
(1)	Resident Taxpayers, excluding permanent establishments, performing Investments in Nusantara Capital with a value of less than IDR10,000,000,000.00 (ten billion rupiah) and fulfil certain requirements may be subject to final Income Tax at a rate of 0% (zero percent) referred to in Article 27 paragraph (1) subparagraph h in a certain period.
(2)	Final Income Tax referred to in paragraph (1) is imposed on income from gross business turnover of up to IDR50,000,000,000.00 (fifty billion rupiah) in 1 (one) tax year received or accrued at the business location in the Nusantara Capital territory, excluding income:
	a.	received or accrued by individual Taxpayers from services in respect of independent personal services;
	b.	received or accrued by corporate Taxpayers in the form of limited partnerships or firms incorporated by individual Taxpayers with special expertise supplying services similar to services in respect of independent personal services;
	c.	from services performed other than in the Nusantara Capital territory and/or utilised by service users residing or domiciled other than in the Nusantara Capital territory;
	d.	that has been subject to final Income Tax pursuant to statutory tax provisions, except for business income subject to final Income Tax as referred to in the Government Regulation stipulating Income Tax on the business income received or accrued by Taxpayers with a certain gross turnover; and
	e.	excluded from Income Tax objects.
(3)	Certain requirements referred to in paragraph (1) include:
	a.	residing or domiciled and/or having a branch in the Nusantara Capital territory;
	b.	conducting business in the Nusantara Capital territory;
	c.	registered as Taxpayers at a tax office whose working area covers the Nusantara Capital territory or having tax identification at the place of business in the Nusantara Capital territory;
	d.	having performed Investments in the Nusantara Capital territory as well as having micro, small and medium enterprise qualifications issued by the competent authority; and
	e.	having applied to utilise the final Income Tax facilities referred to in paragraph (1) no later than 3 (three) months since the Investments referred to in subparagraph d and obtained approval for the granting of Income Tax facilities referred to in paragraph (1).
(4)	If a Taxpayer has more than 1 (one) place of business or branch in the Nusantara Capital territory, the threshold of the value of Investments in Nusantara Capital of less than IDR10,000,000,000.00 (ten billion rupiah) referred to in paragraph (1) and the threshold of the gross turnover of up to IDR50,000,000,000.00 (fifty billion rupiah) referred to in paragraph (2) shall be determined based on the consolidation of the Taxpayer’s places of business or branches in the Nusantara Capital territory.
(5)	Final Income Tax referred to in paragraph (1) is granted starting from the approval for the granting of the facilities referred to in paragraph (3) subparagraph e until 2035.
(6)	Business income that:
	a.	is excluded from the imposition of final Income Tax referred to in paragraph (2) subparagraph a to subparagraph e;
	b.	received or accrued at a place of business other than in the Nusantara Capital territory; and/or
	c.	received or accrued at a place of business in the Nusantara Capital territory sourced from gross turnover that exceeds the threshold of IDR50,000,000,000.00 (fifty billion rupiah),
	is subject to Income Tax pursuant to statutory tax provisions.
(7)	Taxpayers that utilise final Income Tax facilities referred to in paragraph (1) must:
	a.	maintain bookkeeping separately, for Taxpayers required to maintain bookkeeping; or
	b.	maintain recording separately, for Taxpayers not required to maintain bookkeeping,
	between income eligible for the final Income Tax facilities referred to in paragraph (1) and income not eligible for the said facilities.
(8)	In the event of inseparable joint costs in the context of calculating the amount of taxable income for Taxpayers with income eligible for the final Income Tax facilities referred to in paragraph (1) and income not eligible for the the facilities referred to in paragraph (6), they shall be expensed proportionally.
(9)	Provisions on:
	a.	the application; and
	b.	procedures for the submission of the application, issuance, cancellation or revocation of the approval letter and reporting,
	of final Income Tax of 0% (zero percent) on income from certain gross business turnover in micro, small and medium enterprises are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 11 Income Tax Reduction Facility for the Transfer of Rights to Land and/or Buildings Article 57
(1)	Taxpayers transferring rights to land and/or buildings in Nusantara Capital are granted the Income Tax reduction facilities for the transfer of rights to land and/or buildings referred to in Article 27 paragraph (1) subparagraph i.
(2)	The Income Tax reduction facilities for the transfer of rights to land and/or buildings referred to in paragraph (1) are granted by 100% (one hundred percent) of the amount of Income Tax for the transfer of rights to land and/or buildings payable.
(3)	The Income Tax reduction facilities for the transfer of rights to land and/or buildings referred to in paragraph (1) are granted in the event of a transfer of rights to land and/or buildings to a buyer that constitutes the first acquisition of rights to land and/or buildings in Nusantara Capital.
(4)	The Income Tax reduction facilities for the transfer of land rights and/or buildings referred to in paragraph (1) are granted until 2035.
(5)	The application for the Income Tax reduction facilities for the transfer of rights over land and/or buildings referred to in paragraph (1) shall be submitted through electronic channels available at the Ministry of Finance.
(6)	The Income Tax reduction facilities for the transfer of rights over land and/or buildings referred to in paragraph (1) are granted through the issuance of an exemption certificate.
(7)	Provisions on:
	a.	the subjects, forms of the facilities and criteria for eligibility;
	b.	procedures for the application for approval;
	c.	procedures for the granting of the decision on approval;
	d.	procedures for the application for the utilisation and/or the issuance of the exemption certificate;
	e.	procedures for the granting of the decision on utilisation and/or the issuance of the exemption certificate;
	f.	obligations and prohibitions for eligible Taxpayers; and
	g.	criteria for revocation,
	of the Income Tax reduction facilities for the transfer of rights to land and/or buildings are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Section Three Value Added Tax Non-Collected and Exclusion from Sales Tax on Luxury Goods Facilities Article 58
(1)	Tax relief in the form of Value Added Tax and/or Sales Tax on Luxury Goods referred to in Article 26 paragraph (1) subparagraph a number 2 are granted in Nusantara Capital in the form of:
	a.	Value Added Tax non-collected; and
	b.	the exclusion from Sales Tax on Luxury Goods on supplies of taxable goods.
(2)	Tax relief in the form of Value Added Tax referred to in Article 26 paragraph (1) subparagraph a number 2 are granted in Partner Regions in the form of Value Added Tax non-collected.

Article 59
(1)	Tax relief in the form of Value Added Tax non-collected referred to in Article 58 paragraph (1) subparagraph a in Nusantara Capital, is granted for:
	a.	supplies of certain strategic taxable goods and/or taxable services; and/or
	b.	imports of certain strategic taxable goods.
(2)	Certain strategic taxable goods referred to in paragraph (1) subparagraph a include:
	a.	new buildings in the form of landed houses, flat units, offices, shops/shopping centres and/or warehouses for certain individuals, certain agencies and/or ministries/institutions;
	b.	motor vehicles with plate numbers registered in Nusantara Capital, that use domestically produced battery electric vehicles for individuals, agencies and/or ministries/institutions; and
	c.	other certain strategic taxable goods required in the context of the preparation, construction, relocation and development in Nusantara Capital.
(3)	Certain strategic taxable services referred to in paragraph (1) subparagraph a include:
	a.	lease services for landed houses, flat units, offices, shops/shopping centres and/or warehouses supplied to individuals, agencies and/or ministries/institutions, conducting business, assigned or domiciled in Nusantara Capital;
	b.	construction services for the construction of roads, bridges, dams, clean water treatment plants, new and renewable energy power stations, drinking water supply systems, telecommunications networks, energy networks, water/irrigation networks, waste and/or sewage treatment plants, hospitals/clinics, health laboratories, schools or colleges, government buildings, landed houses, flats unit, offices, shops and/or warehouses, airports, seaports, terminals, railway networks or other similar infrastructure constructed in Nusantara Capital;
	c.	garbage and/or waste processing services for the garbage and/or waste produced in Nusantara Capital; and
	d.	other certain strategic taxable services required in the context of the preparation, construction, relocation and development in Nusantara Capital.
(4)	Tax relief in the form of Value Added Tax non-collected referred to in paragraph (1) subparagraph a and subparagraph b is also granted for:
	a.	imports by; and/or
	b.	supplies to,
	taxable persons for VAT purposes producing electricity from new and renewable energy in Nusantara Capital in the form of machinery and factory equipment, both main machinery/equipment and supporting machinery/equipment to produce electricity from new and renewable energy in Nusantara Capital.
(5)	Tax relief in the form of Value Added Tax non-collected referred to in Article 58 paragraph (2) is granted for supplies of certain strategic taxable services in the form of construction services in respect of the development in Partner Regions to Taxpayers eligible for Income Tax facilities referred to in Article 30 paragraph (1), for the following business sectors:
	a.	power stations, including new and renewable energy;
	b.	the construction and operation of toll roads;
	c.	the construction and operation of seaports;
	d.	the construction and operation of airports; and
	e.	the development and supply of clean water.
(6)	Value Added Tax non-collected referred to in paragraph (1) and paragraph (5) may be granted until 2035.
(7)	Value Added Tax payable on imports and/or acquisitions of taxable goods referred to in paragraph (2), paragraph (3), paragraph (4) and paragraph (5) must be paid if:
	a.	the taxable goods that have received tax relief in the form of Value Added Tax non-collected referred to in paragraph (2) and paragraph (4) within a period of 4 (four) years:
		1.	are used not according to the original purpose;
		2.	are transferred to another party, either in part or in whole; and/or
		3.	are registered with a plate number outside Nusantara Capital if the taxable goods are in the form of vehicles.
	b.	the taxable services that have received tax relief in the form of Value Added Tax non-collected referred to in paragraph (3) and paragraph (5):
		1.	are used not according to the original purpose within a period of 4 (four) years; and/or
		2.	are leased back to another party during the lease period if the taxable services are in the form of a lease.
(8)	Provisions on:
	a.	the threshold, subject and criteria for taxable goods and/or taxable services eligible for the tax relief in the form of Value Added Tax non-collected referred to in paragraph (2), paragraph (3), paragraph (4) and paragraph (5);
	b.	procedures for the granting of tax relief in the form of Value Added Tax non-collected on imports and/or supplies of certain taxable goods and/or certain strategic taxable services referred to in paragraph (2), paragraph (3), paragraph (4) and paragraph (5);
	c.	procedures for the payment of Value Added Tax on certain taxable goods and/or certain strategic taxable services provided with the tax relief in the form of Value Added Tax non-collected referred to in paragraph (7);
	d.	other certain strategic taxable goods and/or certain taxable services provided with the tax relief in the form of Value Added Tax non-collected referred to in paragraph (2) subparagraph c and paragraph (3) subparagraph d; and
	e.	other certain strategic taxable goods required in the context of the preparation, construction, relocation and development in Nusantara Capital referred to in paragraph (1) subparagraph b whose imports are provided with the tax relief in the form of Value Added Tax non-collected,
	are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 60
(1)	Tax relief in the form of the exclusion from the imposition of Sales Tax on Luxury Goods referred to in Article 58 paragraph (1) subparagraph b is granted for supplies of the group of luxurious residences to individuals, agencies and/or ministries/industries, conducting business, assigned or domiciled in Nusantara Capital.
(2)	Exclusion from the imposition of Sales Tax on Luxury Goods referred to in paragraph (1) may be granted until 2035.
(3)	Provisions on procedures for the exclusion from the imposition of Sales Tax on Luxury Goods referred to in paragraph (1) are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Section Four Customs Paragraph 1 General Article 61
(1)	The customs regulation referred to in Article 26 paragraph (1) subparagraph a number 3 includes:
	a.	import duty exemption and PDRI Facilities for imports of goods by the central government or local governments intended for public interest in the Nusantara Capital and Partner Regions;
	b.	import duty exemption and PDRI Facilities on imports of capital goods for industrial construction and development in Nusantara Capital and Partner Regions; and
	c.	import duty exemption on imports of goods and materials for industrial construction and development in the Nusantara Capital and/or Partner Regions.
(2)	Import duty exemption and/or PDRI Facilities for Partner Regions referred to in paragraph (1) subparagraph b and subparagraph c are granted to Taxpayers eligible for Income Tax facilities referred to in Article 30 paragraph (1) for business sectors that support the construction and development of Nusantara Capital, including:
	a.	power stations, including new and renewable energy;
	b.	the construction and operation of toll roads;
	c.	the construction and operation of seaports;
	d.	the construction and operation of airports; and
	e.	the development and supply of clean water.
(3)	Import duty exemption and/or PDRI Facilities referred to in paragraph (1) and paragraph (2) may be granted until 2045.

Paragraph 2 Import Duty Exemption and PDRI Facilities for Imports of Goods by the Central Government or Local Governments Intended for Public Interest in the Nusantara Capital Area and Partner Regions Article 62
(1)	Imports of goods by the central government or local governments intended for public interest in the Nusantara Capital territory and Partner Regions referred to in Article 61 paragraph (1) subparagraph a are granted import duty exemption and PDRI Facilities.
(2)	Goods referred to in paragraph (1) may be imported by:
	a.	the central government or local governments;
	b.	third parties based on contracts or work agreements; and/or
	c.	other parties.
(3)	Imports of goods by the central government or local governments referred to in paragraph (1) may be sourced from:
	a.	the state budget and/or local government budget;
	b.	foreign grants or loans; and/or
	c.	other legitimate sources pursuant to statutory provisions.
(4)	Provisions on the implementation and procedures for the granting of import duty facilities and PDRI Facilities for imports of goods referred to in paragraph (1) are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Paragraph 3 Import Duty Exemption and/or PDRI Facilities on Imports of Goods for the Industrial Construction and Development in the Nusantara Capital and Partner Regions Article 63
(1)	Imports of capital goods for industries that produce goods and/or industries that produce services admitted into Nusantara Capital and Partner Regions for the construction and development in Nusantara Capital referred to in Article 61 paragraph (1) subparagraph b, are granted import duty exemption and PDRI Facilities.
(2)	Imports of goods and materials for industries that produce goods admitted into the Nusantara Capital territory and Partner Regions for the construction and development in Nusantara Capital referred to in Article 61 paragraph (1) subparagraph c are granted import duty exemption.
(3)	Capital goods referred to in paragraph (1) include machines, machinery, factory installation equipment, tools or equipment used for the construction and development of the industrial sector, including industries that produce services.
(4)	Goods and materials referred to in paragraph (2) include all goods or materials, regardless of their type and composition, used as materials or components to produce finished goods.
(5)	Import duty exemption and/or PDRI Facilities are granted insofar as the capital goods and goods and materials referred to in paragraph (1) and paragraph (2):
	a.	have not been produced domestically;
	b.	have been produced domestically but have not fulfilled the required specifications; or
	c.	have been produced domestically but the quantity is insufficient for industrial needs,
	based on the list of goods stipulated by the minister who administers governmental affairs in the industrial sector.
(6)	If the imports of goods and materials referred to in paragraph (2) are granted tax facilities, the tax facilities shall be granted pursuant to statutory tax provisions.

Article 64
(1)	Import duty exemption referred to in Article 62 paragraph (1) and Article 63 paragraph (1) and paragraph (2) may be granted to capital goods as well as goods and materials from the Free Port and Free Trade Zones, Special Economic Zones and/or Bonded Storage.
(2)	PDRI Facilities referred to in Article 62 paragraph (1) and Article 63 paragraph (1) may be granted for imports of goods from the Bonded Logistic Centre.

Article 65
(1)	Import duty exemption and PDRI Facilities referred to in Article 63 paragraph (1) may be granted for an import period of a maximum of 2 (two) years from the effective date of the decision on the import duty exemption and PDRI Facilities.
(2)	The import period referred to in paragraph (1) may be extended according to the period for the completion of construction and development.
(3)	Companies that have completed industrial development and are ready to produce, are granted import duty exemption on imports of goods and materials referred to in Article 63 paragraph (2) with an import period of a maximum of 4 (four) years, according to installed capacity, from the effective date of the decision on the import duty exemption.
(4)	Companies that have completed business sector development insofar as they add capacity of a minimum of 30% (thirty percent) of installed capacity, may be granted import duty exemption on the imports of goods and materials referred to in Article 63 paragraph (2) for a maximum of 4 (four) year, according to the installed capacity, from the effective date of the decision on the import duty exemption.
(5)	The import period referred to in paragraph (3) and paragraph (4) may be extended for 2 (two) years from the expiration date of the import duty exemption facilities.
(6)	Companies that have completed construction and/or development referred to in paragraph (3) and paragraph (4), insofar as they use domestically produced machines of a minimum of 30% (thirty percent) of the total value of the machines, may be granted import duty exemption for imports of goods and materials referred to in Article 63 paragraph (2) for 6 (six) years according to the installed capacity from the effective date of the decision on the import duty exemption.
(7)	Industries that produce services are excluded from the provisions referred to in paragraph (3), paragraph (4) and paragraph (6).
(8)	Companies that fulfil the requirements of using domestically produced machines of a minimum of 30% (thirty percent) of the total value of the machines referred to in paragraph (6), shall be determined based on recommendations from the minister who administers governmental affairs in the industrial sector.
(9)	Further provisions on the types of industries that produce services referred to in Article 63 are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Article 66
(1)	To obtain import duty exemption facilities and/or PDRI Facilities referred to in Article 63 paragraph (1) or import duty exemption referred to in Article 63 paragraph (2), Taxpayers apply through the OSS System.
(2)	The authority of the granting of the approval/rejection of the import duty exemption and/or PDRI Facilities for the application referred to in paragraph (1) is delegated in the form of a mandate by the minister who administers governmental affairs in the field of state finances to the minister who administers governmental affairs in the field of investment/investment coordination.
(3)	If the application is approved, the minister who administers governmental affairs in the field of investment/investment coordination issues a decision on import duty exemption and/or PDRI Facilities.
(4)	If the application is rejected, the minister who administers governmental affairs in the field of investment/investment coordination prepares a letter of rejection of the application by stating the reasons for the rejection.
(5)	Provisions on the implementation and procedures for the granting of import duty facilities and/or PDRI Facilities referred to in Article 63 are stipulated in a regulation of the minister who administers governmental affairs in the field of state finances.

Section Five Investment Facilities as the Authority of the Nusantara Capital Authority Paragraph 1 Special Tax Facilities and Special Revenues of Nusantara Capital Article 67
(1)	Special Tax Facilities and special revenues of the Nusantara Capital referred to in Article 26 paragraph (1) subparagraph b number 1 consist of:
	a.	incentives in the form of special tax reduction, relief or exemption of the Nusantara Capital; and
	b.	incentives in the form of reduction, relief or exemption from special revenues of the Nusantara Capital.
(2)	Incentives in the form of special tax reduction, relief or exemption of Nusantara Capital referred to in paragraph (1) subparagraph a are granted as listed in Article 21 paragraph (1) and paragraph (3).
(3)	Incentives in the form of reduction, relief or exemption from special revenues of Nusantara Capital referred to in paragraph (1) subparagraph b are granted as listed in Article 11 paragraph (3).
(4)	Investment Facilities referred to in paragraph (1) are granted according to the priorities determined by the Head of the Authority.

Paragraph 2 Facilitation, Provision of Land and Means and Infrastructure for the Implementation of Investments in the Nusantara Capital Article 68
(1)	Facilitation, provision of land and means and infrastructure for the implementation of Investments in the Nusantara Capital referred to in Article 26 paragraph (1) subparagraph b number 2 consist of:
	a.	the provision of land or location for Entrepreneurs;
	b.	the provision of means and infrastructure;
	c.	the provision of ease and security of investments; and/or
	d.	ease of access to ready-to-use and skilled workforce.
(2)	Facilitation, provision of land, means and infrastructure for the implementation of Investments in the Nusantara Capital referred to in paragraph (1) are provided by the Nusantara Capital Authority according to its authority as referred to in Article 16 paragraph (5).
(3)	Facilities, provision of land, means and infrastructure for the implementation of Investments referred to in paragraph (1) shall be provided according to the priorities determined by the Head of the Authority.

CHAPTER V SUPERVISION Article 69
The Nusantara Capital Authority supervises:
a.	the conformity between business conduct and Business Permits and business reports;
b.	the conformity of spatial planning and building standards;
c.	the fulfilment of health, safety and/or environmental standards.

Article 70
(1)	If the results of the supervision referred to in Article 69 show non-conformity/non-compliance by Entrepreneurs with statutory provisions, the Head of the Authority shall guide the Entrepreneurs.
(2)	If after the guidance referred to in paragraph (1), the Entrepreneurs continue to not show conformity/compliance, the Head of the Authority imposes administrative penalties on Entrepreneurs.
(3)	The imposition of penalties referred to in paragraph (2) consists of:
	a.	written reprimand;
	b.	administrative fines;
	c.	the suspension of Business Permits;
	d.	the revocation of Business Permits; and/or
	e.	the return of facilities.
(4)	Further provisions on the guidance and imposition of administrative penalties referred to in paragraph (1) and paragraph (2) are stipulated in a Head of the Authority Regulation.

CHAPTER VI EVALUATION Article 71
(1)	The implementation of the provisions in this Government Regulation is evaluated periodically every 5 (five) years or at any time if necessary.
(2)	Evaluation referred to in paragraph (1) is carried out by the Nusantara Capital Authority.
(3)	In conducting the evaluation referred to in paragraph (2), the Nusantara Capital Authority coordinates with the relevant ministries/institutions.

CHAPTER VII OTHER PROVISIONS Article 72
(1)	Insofar as not specifically regulated under this Government Regulation, all tax facilities stipulated under statutory laws and regulations in the field of taxation shall apply mutatis mutandis in Nusantara Capital.
(2)	If the regulation of tax facilities pursuant to this Government Regulation has the same scope of the granting of facilities applicable outside Nusantara Capital and Partner Regions but has different benefits, the more favourable provisions on tax facilities shall apply.

Article 73
This Government Regulation shall come into force on the date of promulgation.

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

Stipulated in Jakarta on 6 March 2023 PRESIDENT OF THE REPUBLIC OF INDONESIA, signed JOKO WIDODO Promulgated in Jakarta on 6 March 2023 MINISTER OF THE STATE SECRETARIAT OF THE REPUBLIC OF INDONESIA, signed PRATIKNO STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2023 NUMBER 37

ELUCIDATION

GOVERNMENT OF THE REPUBLIC OF INDONESIA REGULATION

NUMBER 12 OF 2023

CONCERNING

THE GRANTING OF BUSINESS PERMITS, EASE OF DOING BUSINESS AND INVESTMENT INCENTIVES TO ENTREPRENEURS IN NUSANTARA CAPITAL

GENERAL

Pursuant to Law Number 3 of 2022 concerning the State Capital, Nusantara Capital has been established as a sustainable city in the world, the driving force of Indonesia’s future economy and a symbol of national identity. To accelerate the construction and development of Nusantara Capital which constitutes a high-priority scale and has strategic values for the national economy, special policies that may encourage Entrepreneurs in the preparation, construction, relocation and development of Nusantara Capital and Partner Regions are necessary.

The involvement of Entrepreneurs is expected to render Nusantara Capital the centre of governance as well as an Indonesia-centric centre of economic activities, specifically, in the provision of infrastructure and activities that generate economic revival aimed at making Nusantara Capital the centre and locomotive of future economic growth. To provide greater certainty, opportunities and participation to Entrepreneurs in the context of accelerated development in Nusantara Capital, the government needs to regulate the granting of Business Permits, ease of doing business and Investment facilities in Nusantara Capital.

Business permits, ease of doing business and Investment facilities in Nusantara Capital facilities in this Government Regulation are granted to accelerate the development of Nusantara Capital as an economic superhub with investment activities by the private sector both domestically and overseas.

II.

ARTICLE BY ARTICLE

Article 1

Sufficiently clear.

Article 2

Sufficiently clear.

Article 3

Sufficiently clear.

Article 4

Paragraph (1)

The authority of the Nusantara Capital Authority is the special authority of the Nusantara Capital Authority stipulated under statutory provisions on State Capital.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 5

Sufficiently clear.

Article 6

Sufficiently clear.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Sufficiently clear.

Article 10

Sufficiently clear.

Article 11

Sufficiently clear.

Article 12

Letter a

Sufficiently clear.

Letter b

Sufficiently clear.

Letter c

Sufficiently clear.

Letter d

Sufficiently clear.

Letter e

Sufficiently clear.

Letter f

Sufficiently clear.

Letter g

Sufficiently clear.

Letter h

Sufficiently clear.

Letter i

Sufficiently clear.

Letter j

Sufficiently clear.

Letter k

Sufficiently clear.

Letter l

Sufficiently clear.

Letter m

The implementation of Business Permits for the religious sector is related to the activities of Entrepreneurs that organise special hajj and umrah pilgrimages as well as Business Permits to support businesses, including the certification of kosher product guarantees.

Letter n

Sufficiently clear.

Letter o

Sufficiently clear.

Letter p

Sufficiently clear.

Letter q

Sufficiently clear.

Letter r

Sufficiently clear.

Article 13

Sufficiently clear.

Article 14

Sufficiently clear.

Article 15

Sufficiently clear.

Article 16

Sufficiently clear.

Article 17

Sufficiently clear.

Article 18

Sufficiently clear.

Article 19

Sufficiently clear.

Article 20

Sufficiently clear.

Article 21

Sufficiently clear.

Article 22

Sufficiently clear.

Article 23

Sufficiently clear.

Article 24

Sufficiently clear.

Article 25

Sufficiently clear.

Article 26

Sufficiently clear.

Article 27

Sufficiently clear.

Article 28

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Example 1: Trading Services.

PT ABC is a resident corporate Taxpayer that has an automotive parts trading business. PT ABC has been incorporated and domiciled in Jakarta since 2015. Through the place of business in Jakarta, PT ABC serves consumers throughout Indonesia. In 2023, PT ABC performs a new investment of IDR12,000,000,000.00 (twelve billion rupiah) by establishing a new branch in the Nusantara Capital territory in the form of a warehouse and spare parts store. Through the warehouse and shop located in the Nusantara Capital territory, PT ABC serves consumers in the Nusantara Capital territory.

For the investment in the Nusantara Capital territory, PT ABC is entitled to facilities in the form of a corporate Income Tax reduction pursuant to this Government Regulation. However, these facilities are only provided for income from the sales of spare parts which are:

a.	sourced from the warehouse in the Nusantara Capital territory;
b.	performed through the shop in the Nusantara Capital territory; and/or
c.	sold to consumers residing in the Nusantara Capital territory.

On the other hand, sales performed through the place of business in Jakarta are not eligible for the corporate Income Tax reduction facility pursuant to this Government Regulation.

Example 2: Construction Services in the form of construction work.

PT XYZ is a resident corporate Taxpayer conducting construction business. PT XYZ is domiciled in Jakarta. During 2023, PT XYZ performs building construction projects in Jakarta, Surabaya and Samarinda. In 2023, PT XYZ also performs a new investment of IDR15,000,000,000.00 (fifteen billion rupiah) by opening an office in the Nusantara Capital territory in the context of working on a housing development project in the Nusantara Capital territory. In addition to opening an office in the Nusantara Capital territory, PT XYZ also performs a new investment by purchasing high-tech construction equipment amounting to IDR100,000,000,000.00 (one hundred billion rupiah) which may increase the efficiency of project completion time.

For the investment in the Nusantara Capital territory, PT XYZ is entitled to the facilities in the form of a corporate Income Tax reduction pursuant to this Government Regulation. However, these facilities are only provided for construction projects carried out by PT XYZ to construct housing in the Nusantara Capital territory, whereas building construction projects in Jakarta, Surabaya and Samarinda carried out by PT XYZ are not entitled to the corporate income tax reduction facility pursuant to this Government Regulation.

Example 3: Construction Services in the form of construction consulting.

PT DEF is a resident corporate Taxpayer conducting a construction consulting business. PT DEF is domiciled in Surabaya. During 2023, PT DEF provides construction consulting services for building construction in Bandung and Yogyakarta. In 2023, PT DEF also performs a new investment of IDR20,000,000,000.00 (twenty billion rupiah) by opening an office in the Nusantara Capital territory in the context of providing construction consulting services for housing development projects in the area.

For the investment in the Nusantara Capital territory, PT DEF is entitled to the facilities in the form of a corporate Income Tax reduction pursuant to this Government Regulation. However, these facilities are only provided for the provision of construction consulting services:

a.	performed through an office located in the Nusantara Capital territory; and
b.	for construction projects implemented in the Nusantara Capital territory.

On the other hand, construction consulting services for the construction of buildings in Bandung and Yogyakarta are not eligible for the corporate Income Tax reduction facility pursuant to this Government Regulation.

Example 4: Real Estate Brokerage Services.

PT PQR is a resident corporate Taxpayer conducting real estate brokerage services business. PT PQR has been incorporated and domiciled in Jakarta since 2017. Through its office in Jakarta, PT PQR connects real estate providers/property developers and potential consumers throughout Indonesia.

In 2023, PT PQR performs a new investment of IDR15,000,000,000.00 (fifteen billion rupiah) by establishing a branch office in the Nusantara Capital territory. Through this branch office, PT PQR also connects property developers in the Nusantara Capital territory and potential customers throughout Indonesia.

For the investment in the Nusantara Capital territory, OT PQR is entitled to the facilities in the form of a corporate Income Tax reduction pursuant to this Government Regulation. However, these facilities only provided for income sourced from real estate brokerage services for:

a.	transferred property or real estate in the Nusantara Capital territory; and
b.	buyers residing in the Nusantara Capital territory or intending to reside in the Nusantara Capital territory based on actual facts and conditions.

Paragraph (8)

Sufficiently clear.

Paragraph (9)

Sufficiently clear.

Paragraph (10)

Sufficiently clear.

Article 29

Sufficiently clear.

Article 30

Sufficiently clear.

Article 31

Sufficiently clear.

Article 32

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Subparagraph a

Sufficiently clear.

Subparagraph b

Sufficiently clear.

Subparagraph c

“Sharia finanes” refer to all financial activities of fundraising carried out based on sharia principles which include banking and insurance.

Subparagraph d

Sufficiently clear.

Subparagraph e

Sufficiently clear.

Subparagraph f

Sufficiently clear.

Subparagraph g

Sufficiently clear.

Subparagraph h

Sufficiently clear.

Subparagraph i

Sufficiently clear.

Subparagraph j

Sufficiently clear.

Subparagraph k

“Bullion” refers to a gold-related business in the form of deposits, financing, trading, safekeeping of gold and/or other activities carried out by financial service institutions related to gold.

Subparagraph l

“Trust” refers to the safekeeping and management of the trustee’s property based on a written agreement.

Subparagraph m

Sufficiently clear.

Subparagraph n

“Financial holding company” refers to a legal entity held by the controlling shareholders or ultimate controlling shareholders to control, consolidate and be accountable for all financial holdings.

Subparagraph o

Sufficiently clear.

Subparagraph p

Sufficiently clear.

Subparagraph q

Sufficiently clear.

Subparagraph r

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

“Regulation of the authorities in the financial sector” refers to a regulation stipulating the financial sector with contents that include business models, schemes, business permits, ease of doing business and supervision, including the imposition of penalties.

Paragraph (8)

Sufficiently clear.

Article 33

Paragraph (1)

“Non tax resident” refers to a non tax resident other than a permanent establishment in Indonesia and constitutes the beneficial owner.

Paragraph (2)

Sufficiently clear.

Article 34

Paragraph (1)

“Authorities in the financial sector” include the Financial Services Authority and Bank Indonesia according to their authority.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Subparagraph a

Sufficiently clear.

Subparagraph b

Sufficiently clear.

Subparagraph c

“Digital finances” refer to transactions conducted digitally that are recorded and traded globally with a high level of security.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Article 35

Paragraph (1)

“Establish and/or relocate their head office and/or regional offices to Nusantara Capital” refers to the incorporation of a new head office and/or regional offices, whereas the activities of subsidiaries or affiliates located outside Nusantara Capital continue to pay Income Tax liabilities pursuant to statutory provisions in the field of taxation.

Paragraph (2)

Subparagraph a

Sufficiently clear.

Subparagraph b

“Having economic substance” refers to:

a.	the Taxpayer’s business is managed by the management and the management has sufficient authority to conduct the business;
b.	the Taxpayer has sufficient and adequate fixed assets and/or non-fixed assets to conduct business in the Nusantara Capital territory;
c.	the Taxpayer has a sufficient and adequate number of employees with certain expertise and skills according to the conducted business sector;
d.	the Taxpayer has an active business in addition to only receiving income in the form of dividends, interest, royalties and/or profits from the transfer of assets; and
e.	the Taxpayer conducts strategic activities for companies and/or business groups, such as implementing corporate strategic decisions, consolidating the implementation of new investments, spin-offs, mergers, acquisitions, dissolution of affiliations, consolidation of financial management and/or human resources.

Subparagraph c

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

“Establish their head office and/or regional offices in Nusantara Capital” refers to the incorporation of a new head office and/or regional offices, whereas the activities of subsidiaries or affiliates located outside Nusantara Capital continue to pay Income Tax liabilities pursuant to statutory provisions in the field of taxation.

Paragraph (5)

Subparagraph a

“Having economic substance” refers to:

a.	the Taxpayer’s business is managed by the management and the management has sufficient authority to conduct the business;
b.	the Taxpayer has sufficient and adequate fixed assets and/or non-fixed assets to conduct business in the Nusantara Capital territory;
c.	the Taxpayer has a sufficient and adequate number of employees with certain expertise and skills according to the conducted business sector;
d.	the Taxpayer has an active business in addition to only receiving income in the form of dividends, interest, royalties and/or profits from the transfer of assets; and
e.	the Taxpayer conducts strategic activities for companies and/or business groups, such as implementing corporate strategic decisions, consolidating the implementation of new investments, spin-offs, mergers, acquisitions, dissolution of affiliations, consolidation of financial management and/or human resources.

Subparagraph b

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Article 36

Sufficiently clear.

Article 37

Sufficiently clear.

Article 38

Sufficiently clear.

Article 39

Sufficiently clear.

Article 40

Sufficiently clear.

Article 41

Sufficiently clear.

Article 42

Sufficiently clear.

Article 43

Sufficiently clear.

Article 44

Paragraph (1)

Example 1:

Research and Development through Head Offices Eligible for Facilities.

PT ABC is a manufacturing company in the computer hardware sector, which is domiciled in Nusantara Capital. In 2023, PT ABC performs research and development in Nusantara Capital. For the implementation of research and development by PT ABC in the Nusantara Capital territory, PT ABC is entitled to utilise the gross income reduction facilities for certain research and development pursuant to this Government Regulation.

Example 2:

Research and Development through Branch Offices Eligible for Facilities.

PT XYZ is a manufacturing company in the pharmaceutical sector domiciled in Jakarta. In 2023, PT XYZ opens a branch office in the Nusantara Capital territory and performs research and development for the company. For the implementation of research and development by the branch office in the Nusantara Capital territory, PT XYZ is entitled to utilise the gross income reduction facilities for certain research and development pursuant to this Government Regulation.

Example 3:

Research and Development through Branch Offices Ineligible for Facilities.

PT PQR is a manufacturing company in the pharmaceutical sector domiciled in Nusantara Capital. In 2024, PT PQR opens a branch office in Jakarta in the context of performing research and development for the company. For the implementation of research and development by the branch office in Jakarta, PT PQR is not entitled to utilise the gross income reduction facilities for certain research and development pursuant to this Government Regulation because the research and development are not performed in the Nusantara Capital territory.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Article 45

Paragraph (1)

“Other non-profit facilities" include facilities for environmental sustainability and ecosystem conservation.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Article 46

Sufficiently clear.

Article 47

Sufficiently clear.

Article 48

Sufficiently clear.

Article 49

Sufficiently clear.

Article 50

Sufficiently clear.

Article 51

Sufficiently clear.

Article 52

Paragraph (1)

Subparagraph a

"Residing in the Nusantara Capital territory" refers to having a place determined according to the actual situation, including:

a.	a permanent home of the individuals and their families;
b.	a centre of vital interests, if the individuals:
	1)	have permanent homes as referred to in subparagraph a in 2 (two) or more places; or
	2)	do not have a permanent home as referred to in subparagraph a; or
c.	where the individuals have resided the longest within the last 1 (one) calendar year if the centre of vital interests referred to in subparagraph b cannot be determined.

Example:

Wildan has a permanent home as well as a place of trading business in Nusantara Capital. In addition, Wildan also has a permanent home in Jakarta. Thus, Wildan is considered to reside in Nusantara Capital because he has a centre of vital interests in Nusantara Capital.

“Domiciled in the Nusantara Capital territory” refers to having a place determined according to the actual situation, including:

a.	the location of the director’s office as well as administrative and financial centre stated in:
	1)	the deed or documents of establishment and amendments thereto;
	2)	a certificate of appointment from the head office for permanent establishments;
	3)	business and/or activity permit documents;
	4)	certificate of a place of business; or
	5)	joint operation agreement for joint operations;
b.	the location of the director’s office as well as administrative and financial centre according to the actual conditions, if the location of the director’s office as well as administrative and financial centre differs from that stated in:
	1)	the deed or documents of establishment and amendments thereto;
	2)	a certificate of appointment from the head office for permanent establishments;
	3)	business and/or activity permit documents;
	4)	certificate of a place of business; or
	5)	joint operation agreement for joint operations;
c.	the location of the director’s office, if the location of the director’s office is separate from the administrative and financial centre as well as the place of business; or
d.	the place of business, for corporate Taxpayers engaged in certain business sectors determined by the Director General of Taxes.

Example:

PT A is incorporated in Nusantara Capital and the address has been stipulated in the deed or documents of establishment and the address is the domicile of the director and administrative and financial centre. Thus, PT A is domiciled in Nusantara Capital.

“Having a place of business in the Nusantara Capital territory” refers to having a place used for production, distribution, marketing or management that may be in the form of a business location, company branch office, representative office, warehouse, marketing unit or similar place of business.

Example:

PT Y is domiciled in Bandung and has a distribution business unit in Nusantara Capital. Thus, PT Y is deemed to have a place of business in Nusantara Capital.

Subparagraph b

“Taxpayer Identification Number” refers to a number issued to Taxpayers as a means of tax administration that is used as a personal identity or Taxpayer identity in conducting their tax rights and obligations, and may be in the form of the Head Office Taxpayer Identification Number or Branch Taxpayer Identification Number.

“Tax identification at the place of business” refers to an identification number issued for a Taxpayer’s place of business that is separate from the Taxpayer’s residence or domicile, and may be in the form of the Branch Taxpayer Identification Number or Place of Business Identification Number.

Subparagraph c

Sufficiently clear.

Subparagraph d

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 53

Sufficiently clear.

Article 54

Sufficiently clear.

Article 55

Sufficiently clear.

Article 56

Paragraph (1)

Sufficiently clear.

Paragraph (2)

The object of final Income Tax at a rate of 0% (zero percent) within a certain period is income from the share of gross business turnover up to IDR50,000,000,000.00 (fifty billion rupiah) in 1 (one) year tax received or accrued at the business location in the Nusantara Capital territory.

Example:

PT A establishes a business in the Nusantara Capital territory that fulfils the requirements to obtain the final Income Tax at a rate of 0% (zero percent) facilities from the 2024 tax year and in the 2025 tax year, PT A has gross business turnover received or accrued at the business location in the Nusantara Capital territory of IDR6,000,000,000.00 (six billion rupiah). The income from the said business is subject to final Income Tax at a rate of 0% (zero percent).

“Income from gross business turnover of up to IDR50,000,000,000.00 (fifty billion rupiah) in 1 (one) tax year received or accrued at the business location in the Nusantara Capital territory” refers to income from industrial activities and/or supplies of goods and/or services performed in the Nusantara Capital territory.
Subparagraph a

“Services in respect of independent personal services” refer to:

a.	professionals who perform independent personal services, consisting of lawyers, accountants, architects, doctors, consultants, notaries, conveyancers, appraisers and actuaries;
b.	musicians, presenters, singers, comedians, film stars, soap opera stars, commercial stars, directors, film crews, photo models, models, actors/actresses and dancers;
c.	sportsmen;
d.	advisors, teachers, trainers, public speakers, extension workers and moderators;
e.	authors, researchers and translators;
f.	advertising agencies;
g.	project supervisors or managers;
h.	intermediaries;
i.	salespeople;
j.	insurance agents; and
k.	distributors of multilevel marketing or direct selling companies and other similar activities.

Subparagraph b

Example:

Mr. A is a tax consultant, and together with Mr. B, a fellow tax consultant, establish AB and Partner Firm. The firm conducts business by providing tax consulting services. Considering that the services provided by the firm are the same as the services provided by Mr. A and Mr. B in respect of independent personal services in the form of tax consultant services, the income from the firm is not included as income that may be subject to final Income Tax at a rate of 0% (zero percent).

Subparagraph c

Sufficiently clear.

Subparagraph d

Taxpayers’ income that has been subject to final Income Tax under separate statutory tax provisions cannot be subject to final Income Tax at a rate of 0% (zero percent) pursuant to this Government Regulation.

Pursuant to statutory provisions stipulating Income Tax on the business income received or accrued by Taxpayers with a certain gross turnover, micro, small and medium enterprise Taxpayers that fulfil the criteria and have a certain gross turnover are subject to final Income Tax.

To provide convenience and facilities, micro, small and medium enterprise Taxpayers conducting business in the Nusantara Capital territory may utilise the final Income Tax at a rate of 0% (zero percent) facilities pursuant to this Government Regulation.

Example:

PT AB establishes a business in the Nusantara Capital territory in 2025 and later in the 2025 tax year, PT AB has the following gross business turnover:

1.	from the business of leasing land and/or buildings of IDR500,000,000.00 (five hundred million rupiah); and
2.	from the business of selling building materials of IDR1,000,000,000.00 (one billion rupiah).

On the said income, Income Tax is imposed as follows:

income from the business of leasing land and/or buildings of IDR500,000,000.00 (five hundred million rupiah) is subject to the final Income Tax referred to in the Government Regulation stipulating Income Tax on income from the lease of land and/or buildings, thereby, cannot be subject to final Income Tax at a rate of 0% (zero percent) pursuant to this Government Regulation.

although the Taxpayer fulfils the criteria to be subject to the final Income Tax referred to in the Government Regulation stipulating Income Tax on the business income received or accrued by Taxpayers with a certain gross turnover, income from the business of selling building materials of IDR1,000,000,000.00 (one billion rupiah) may be subject to final Income Tax at a rate of 0% (zero percent) pursuant to this Government Regulation.

Subparagraph e

Sufficiently clear.

Paragraph (3)

Example:

PT B is engaged in the industrial sector, establishes its business and is domiciled and conducts business in the Nusantara Capital territory. PT B registers its business with an investment of IDR8,000,000,000.00 (eight billion rupiah) on 1 July 2025. PT B is registered as a Taxpayer at the tax office whose working area covers the Nusantara Capital territory.

PT B applies for the final Income Tax at a rate of 0% (zero percent) facilities on 1 August 2025 and obtains approval for the granting of the facilities on 5 August 2025.

Because PT B fulfils the investment criteria of less than IDR10,000,000,000.00 (ten billion rupiah) and certain requirements, PT B is entitled to the final Income Tax at a rate of 0% (zero percent) facilities on income from gross business turnover of up to IDR50,000,000,000.00 (fifty billion rupiah) in 1 (one) tax year received or accrued at the business location within the Nusantara Capital territory up to a certain period.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

According to the example referred to in paragraph (3), PT B is entitled to the final Income Tax imposition at a rate of 0% (zero percent) facilities starting from the date of approval of the granting of the final Income Tax facilities until the end of 2035.

Paragraph (6)

Example:

According to the example referred to in paragraph (3), PT B in 2027 opens a business branch outside the Nusantara Capital territory. PT B’s gross business turnover in the 2027 Tax Year is as follows:

a.	at the business location in the Nusantara Capital territory of IDR5,000,000,000.00 (five billion rupiah); and
b.	at the business location outside the Nusantara Capital territory of IDR2,000,000,000.00 (two billion rupiah).

PT B’s income from the gross business turnover of up to IDR50,000,000,000.00 (fifty billion rupiah) at the business location in the Nusantara Capital territory referred to in subparagraph a is subject to final Income Tax at a rate of 0% (zero percent).

Income from the gross business turnover at the business location other than that in the Nusantara Capital territory of IDR2,000,000,000.00 (two billion rupiah) is subject to Income Tax pursuant to applicable statutory tax provisions.

Paragraph (7)

Sufficiently clear.

Paragraph (8)

Joint costs refer to expenditures or costs that are directly related to activities to derive, collect and maintain income and at the same time, are directly related to activities to derive, collect and maintain other income.

Joint costs constituting the basis for the allocation of expensing in the context of calculating the amount of taxable income are joint costs after fiscal adjustments/corrections have been performed pursuant to the Law stipulating Income Tax.

Paragraph (9)

Sufficiently clear.

Article 57

Sufficiently clear.

Article 58

Sufficiently clear.

Article 59

Sufficiently clear.

Article 60

Paragraph (1)

“Luxury residences” include luxury houses, apartments, condominiums, townhouses and the like.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 61

Sufficiently clear.

Article 62

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Subparagraph a

Sufficiently clear.

Subparagraph b

Sufficiently clear.

Subparagraph c

“Other parties” refer to those performing imports, among others, for grants to the central government or local governments that are not recorded in the state budget.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Article 63

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

“Tools or equipment used for industries that produce services” refer to components of tools or equipment used to support the conduct of service industry activities, such as radiology components in health services, components required for research and innovation.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Article 64

Sufficiently clear.

Article 65

Sufficiently clear.

Article 66

Sufficiently clear.

Article 67

Sufficiently clear.

Article 68

Sufficiently clear.

Article 69

Sufficiently clear.

Article 70

Sufficiently clear.

Article 71

Paragraph (1)

“Evaluation at any time if necessary” is, among others, due to:

a.	instructions from the President;
b.	the development and improvement of the investment ecosystem; or
c.	businesses in the context of accelerating development in Nusantara Capital. Paragraph (2)

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Article 72

Sufficiently clear.

Article 73

Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6854

Gunakan Akun Perpajakan DDTC

Dapatkan akses harian untuk baca berbagai dokumen di kanal Sumber Hukum

GOVERNMENT OF THE REPUBLIC OF INDONESIA REGULATION NUMBER 12 OF 2023

Considering

In View of

To enact

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

Article 21

Article 22

Article 23

Article 24

Article 25

Article 26

Article 27

Article 28

Article 29

Article 30

Article 31

Article 32

Article 33

Article 34

Article 35

Article 36

Article 37

Article 38

Article 39

Article 40

Article 41

Article 42

Article 43

Article 44

Article 45

Article 46

Article 47

Article 48

Article 49

Article 50

Article 51

Article 52

Article 53

Article 54

Article 55

Article 56

Article 57

Article 58

Article 59

Article 60

Article 61

Article 62

Article 63

Article 64

Article 65

Article 66

Article 67

Article 68

Article 69

Article 70

Article 71

Article 72

Article 73

ELUCIDATION

Government Regulation - 12 TAHUN 2023 - Perpajakan DDTC

GOVERNMENT OF THE REPUBLIC OF INDONESIA REGULATION
NUMBER 12 OF 2023