Covid-19 Incentives Extended, Recipient Business Sectors are Trimmed

Once again, the government has extended the tax incentives provided for companies affected by the Covid-19 pandemic by six months until December 2021.

Some of the tax facilities whose validity period has been extended are:

• Income Tax Article (ITA) 21 borne by the government (DTP)
• Final Income Tax borne by the government,
• Acceleration of VAT refunds,
• Reduction of ITA 25 installments, and
• Exemption of ITA 22 on Import

The incentive extension is contained in the Minister of Finance Regulation (PMK) Number 82/PMK.03/2021, which revises the previous provisions (PMK Number 9/PMK.03/2021).

Business Classifications are Trimmed

However, the criteria for receiving tax incentives are trimmed. Practically only the recipients of incentives government-borne ITA 21 whose criteria are not changed, that is given to 1,189 Classification of Business Classifications (KLU)

The government through the Minister of Finance confirms that tax facilities will be provided selectively. That is only for business sectors that are considered to be still stranded and need to get support to recover.

In addition, the extension of the validity period of tax incentives also focus on fiscal capacity in supporting the strengthening of public health, while accelerating the national economic recovery.

The following are the criteria for KLU who are entitled to receive tax facilities until the tax period of December 2021:

Types of Incentive	Latest	Previous
Government-borne ITA 21	1189 KLU	1189 KLU
Government-borne MSMEs Final Income Tax	gross income below IDR 4.8 billion	gross income below IDR 4.8 billion
ITA 22 on Import	132 KLU	730
Reduction of ITA 25 installments	216 KLU	1.018 KLU
Acceleration of VAT refunds	132 KLU	725 KLU

 

Reapplying

Companies that wish to take advantage of the government-borne ITA 21 incentive and reduction of ITA 25 installments must re-submit the notification of incentive utilization.

Meanwhile, for companies that wish to obtain the exemption of ITA 22 on Import, apart from submitting notification, they must also re-apply for a tax exemption letter.

The notification form for the incentive utilization and the application for a tax exemption letter can be accessed through the www.pajak.go.id page.

Health Facilities and Donations

In addition, the government also extended the provision of other income tax incentives in order to support health care until 30 June 2021, which includes: 

1. Additional net income reduction for taxpayers who produce medical devices
2. Donations can be a deduction from gross income
3. The imposition of 0% (final) income tax on income received by human resources in the health sector
4. The imposition of 0% (final) income tax on income in the form of compensation or replacement for the use of assets

The certainty of the extension of the incentive validity period is contained in PMK No. 83/PMK.03/2021, which is an amendment to PMK No. 239/PMK.03/2020. 

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