11 Benefit-in-Kinds with Certain Types and Limits of Benefit-in-Kinds are Tax-Free, Here are the Details!

Wednesday, 05 July 2023

11 Benefit-in-Kinds with Certain Types and Limits of Benefit-in-Kinds are Tax-Free, Here are the Details!

JAKARTA. The government has released Minister of Finance Regulation (PMK) Number 66 Year 2023 related to the imposition of tax on Benefit-In-Kind (BIK).

The regulation, which is a derivative of the Harmonized Tax Law (HPP Law) and Government Regulation (PP) Number 55 of 2022, has been much awaited.

One of the substances that many parties are anticipating is the type of BIK with certain types or limits that are exempted from the object of Income Tax.

Thus, in the regulation released on 27 June 2023, it is mentioned that there are 11 types of BIK with certain limitations that are tax-free, including:

  1. Gifts from employers in the form of food ingredients, beverage ingredients, food, and/or drinks for religious holidays such as Idul Fitri, Christmas, Nyepi, Vesak, and Chinese New Year are received by employees or all employees.
  2. Gifts from the employer given other than in the context of religious holidays to employees with a value of not more than IDR 3 million per tax year for each employee.
  3. Work equipment and facilities from the employer such as laptops, computers, and cell phones along with supporting facilities such as credit and internet. With restrictions received by employees and used to support work.
  4. Health and medical service facilities from the employer for employees, in order to handle work accidents, occupational diseases, life-saving emergencies or treatment, and further treatment due to work accidents or occupational diseases.
  5. Sports facilities from employers received by employees with a value not exceeding IDR 1.5 million for each employee per one tax year. Except for golf, horse racing, motorboat racing, gliding, or automotive sports facilities.
  6. Communal living facilities such as mes, dormitories, boarding houses, or barracks for employees.
  7. Residential facilities whose utilization rights are held by individuals such as apartments or landed houses for employees with a maximum value of IDR 2 million per month for each employee.
  8. Private vehicle facility for employees who have an average gross income of IDR 100 million a month in the last 12 months.
  9. Pension fund contribution facility borne by employers for employees. Worship facilities such as prayer rooms, mosques, chapels, or temples.

All BIK received or accrued by employees during 2022, if the value of the BIK provided is above the specified limit, then the difference will be subject to income tax. (ASP/KEN)


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