Minister of Finance Sri Mulyani released a regulation regarding the provision of tax facilities in the Nusantara Capital City (IKN). The provisions are contained in Minister of Finance Regulation (PMK) Number 28 of 2024, effective since its promulgation on 16 May 2024.
For information, this regulation is a derivative regulation of Government Regulation Number 12 of 2023 on Providing Business Licensing, Ease of Doing Business, and Investment Facilities for Business Actors in the Nusantara Capital City
In general, three tax facilities will be provided for business activities in IKN: Income Tax, Value Added Tax (VAT), and/or Sales Tax on Luxury Goods (STLG) facilities, as well as customs facilities.
Read: Building Nusantara Capital City, Government Exempts Corporate Income Tax for Up to 30 Years
Types of Facility
In detail, there are nine income tax facilities provided. First, the reduction of corporate income tax for domestic corporate taxpayers up to 100% or Tax Holiday. The Tax Holiday incentive is given to companies in strategic sectors for the construction and development of IKN or infrastructure and public services in partner regions that invest a minimum of IDR 10 billion and meet other requirements. The details can be read in: Tax Holiday in IKN: Longer Duration, Lower Investment Value
Second, income tax facilities on financial sector activities in financial centers, in the form of income tax reduction for corporations engaged in the financial industry in IKN.
Third, corporate income tax reduction facilities of 100% and 50% for the establishment and/or relocation of head offices and/or regional offices. This incentive is provided for foreign tax subjects and domestic taxpayers who establish or relocate their head office or regional office to IKN until 31 December 2045.
Fourth, gross income deduction for organizing certain competency-based apprenticeships, work practices, learning, and human resource development activities.
Read: Minister of Finance Hands Over the Tax Holiday Granting Authority to BKPM
Fifth, gross income deduction for certain research and development activities. Sixth, gross income deduction for donations or construction costs for public facilities, social facilities, and other non-profit facilities.
Seventh, Income Tax Article (ITA) 21 facility borne by the government and final for permanent employees and/or non-permanent employees who meet certain criteria. Eighth, 0% final income tax for domestic taxpayers who are Micro, Small, and Medium Enterprises (MSMEs). Ninth, reduction of income tax on the transfer of land and/or buildings (L&B) rights.
Meanwhile, incentives provided related to VAT and/or STLG include non-collected VAT and STLG exemptions. Then, the customs incentives provided consist of exemption from import duties and tax facilities in the context of importing goods imported by the central or regional governments for the public interest in IKN.
Next, exemption from import duties and tax facilities in the context of importing capital goods for industrial development in IKN and partner regions. Lastly, import duty exemption facilities on imports of goods and materials for industrial development in IKN and partner regions. (ASP/CIN/AUD/CHY/KEN)
