Covid-19 (Corona Virus Disease) Article - Regulation of the Minister of Finance of the Republic of Indonesia No. 23/PMK.03/2020 concerning Tax Incentives for Taxpayers Affected by Corona Virus Outbreak ("PMK 23/03/2020")

The difficulty of the economy in Indonesia due to the corona virus outbreak pushed the government through the Ministry of Finance to issue regulations related to tax incentives. Regulations related to tax incentives are regulated in the Minister of Finance Regulation of the Republic of Indonesia No. 23/PMK.03/2020 concerning Tax Incentives for Taxpayers Affected by Corona Virus Outbreak ("PMK 23/03/2020"). This tax incentive consists of Income Tax Article 21 incentives, Income Tax Article 22 Incentives, Income Tax Article 25 installments and VAT incentives.

Income received by employees that must be deducted by Article 21 income tax every month by the employer will be borne by the government. Article 21 Income Tax borne by the Government must be paid in cash by the Employer at the time of payment of income to the Employee, including in the case of the Employer providing Article 21 income tax benefits or bearing Article 21 Income Tax to the Employee. Article 21 Income Tax borne by the Government received by Employees from the Employer is not counted as income subject to tax and is given from the April 2020 Tax Period to the September 2020 Tax Period. The utilization of Income Tax Article 21 incentives borne by the Government is done by giving written notification by the employer to the Head of the Tax Office where the employer is registered directly. These incentives are valid from the Notification Tax Period submitted until the Tax Period of September 2020. The Employer must submit the realization of Article 21 Income Tax borne by the Government to the Head of the Tax Office where the employer is registered.

Income Tax Article 22 Imports are collected by the Foreign Exchange Bank or the Director General of Customs and Excise when the Taxpayer imports goods. Article 22 Income Tax Import is exempt from collection to taxpayers who have the KLU code in accordance with Attachment A of PMK 23/03/2020 and has been determined as a KITE Company (Ease of Importation for Export Purposes). Exemption from collecting Income Tax is given through a Certificate of Free Collection of Income Tax Article 22 of Import submitted by the Taxpayer in writing to the Head of the Tax Office where the Central Taxpayer is registered using the Form in accordance with Attachment G PMK 23/03/2020. Taxpayers who have been exempted from Article 22 Import Tax Income must submit the realization report of Article 22 Import Tax Exemption every 3 (three) months to the Head of the Tax Office.

The amount of Income Tax of Article 25 installments in the current tax year which must be paid by taxpayers themselves for each month. Taxpayers are given a reduction in the amount of Article 25 income tax installments by 30% (thirty percent) of Article 25 income tax installments that should be owed but must submit a notice of reduction in the amount of Article 25 income tax in writing to the Head of the Tax Office where the taxpayer is directly registered.

Taxpayers who have business classifications as listed in appendix F and have been designated as a KITE Company, and submit tax returns on Value Added Tax Periods for overpaid refunds with a maximum overpayment amount of Rp5,000,000,000.00 (five billion rupiahs) can be given a refund preliminary overpayment of taxes as PKP is low risk. The VAT Period Notification Letter which is given a preliminary refund includes the VAT Period SPT including rectification of the VAT Period Notification Letter, for the Tax Period since the enactment of this regulation, which is March 23, 2020, until the September 2020 Tax Period and is submitted no later than October 31, 2020.

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