Regulation Update
Tax Holiday at IKN: Longer Duration, Lower Investment Value

Tuesday, 28 May 2024

Tax Holiday at IKN: Longer Duration, Lower Investment Value

The government finally released detailed rules regarding the provision of tax facilities in the Nusantara Capital City and partner regions, namely certain areas on the Kalimantan island formed as IKN economic superhubs. 

The provision mentioned is the Minister of Finance Regulation (PMK) Number 28 of 2024 which takes effect on 16 May 2024.

One of the facilities offered in the regulation, which is a derivative regulation of Government Regulation (PP) Number 12 of 2023, is a tax exemption incentive of up to 100% of the amount of tax payable to domestic taxpayers.

This facility is often referred to as Tax Holiday. However, Tax Holiday is actually not a new incentive in Indonesia. Previously, through PMK Number 130 of 2020, the government also offered tax exemptions for business activities in Indonesia.

Read: Sri Mulyani Releases a Regulation on Tax Facilities in IKN, Here are the Details.

In general, companies entitled to Tax Holiday incentives in IKN consist of companies engaged in infrastructure and public services, companies in the economic revitalization sector (usaha bangkitan ekonomi), and other business sectors.

Longer Tenor

However, specifically for business activities in IKN, the government provides several advantages, such as a longer duration or period, which is a maximum of 30 years from the existing provisions which are a maximum of only 20 years.

In addition, to obtain a Tax Holiday in IKN, companies only need to invest a minimum of IDR 10 billion. This amount is smaller than the Tax Holiday facility that applies outside IKN, which is a minimum of IDR 100 billion.

The Tax Holiday period will depend on the taxpayer realizing the investment. The faster the realization, the longer the tax exemption is given. 

In this regard, the government divides the tenor of Tax Holidays into three groups, except for other business sectors. 

Year of Investment Realization

Infrastructure and Public Services

Economic Revitalization 

Other Business Sectors


30 years

20 years


10 years


25 years

15 years


20 years

10 years

For the record, companies in other business sectors that realize their investments between 2031-2045 are given a maximum corporate income tax reduction facility of up to 50% for ten years. 

Business Sectors

In detail, 17 infrastructure and public service sub-fields, four sub-sectors related to economic revitalization, and seven other sub-sectors are eligible for facilities.

A. Infrastructure and General Services

There are 17 business sectors that are included in the infrastructure and general services group of Tax Holiday recipients in IKN, including:


Business Sectors


Power plant


Construction and Operator of toll road


Construction and Operator of seaport 


Construction and Operator of the airport 


Clean water construction and supply


Construction and operator of health facilities


Construction and operator of education units


Construction and provision of telecommunication and informatics infrastructure


Construction and management of urban park forests


Construction of housing, residential areas, and offices


Construction and management of wastewater


Construction and management of underground utility network system


Construction and operator of industrial estates and research and innovation centers


Construction and operator of public market


Provision of public transportation


Construction and operator of passenger or freight vehicle terminals


Construction and operation of stadiums/sports facilities

B. Business Sector of Economic Revitalization


Business Sectors


Construction and operator of Shopping Center


Provision of tourist facilities and accommodation services/star hotels


Provision of Meeting, Incentive, Convention and Exhibition (MICE) facilities


Electric vehicle refueling and/or charging stations

C. Other Business Sectors


Business Sectors



Urban agriculture and/or fisheries cultivation



Value-added industry and/or industrial engineering



Hardware and/or software industry



Trade services

Sourced from warehouses in areas in IKN and earned income from business activities through store locations in IKN, and/or traded goods are sold to consumers in IKN.


Construction Services

In the form of construction consulting services, construction work, and/or integrated construction work.


Real estate brokerage services

Service activities carried out by property trading brokerage companies in IKN.


Tourism and creative economy services

Services located and earning income from business activities in the form of tourism and creative economy in IKN.

Application Procedure

To obtain this Tax Holiday facility, the company must first have obtained a business license in Indonesia from the OSS system. Later, the OSS system will scrutinize to ensure that the Taxpayer has met the set criteria. 

Furthermore, the OSS system will send a notification to the Taxpayer, whether they have met the criteria or not. After receiving a notification stating they have met the criteria and requirements, the company can only apply for a Tax Holiday facility in IKN through the OSS system.

The application is submitted before the company operates commercially, not more than one year after the business license is issued. It should be noted that when applying, the company must upload documents in the form of a list of tangible fixed assets in the investment value plan. (ASP/ALF/KEN)


Global Recognition
Global Recognition | Word Tax     Global Recognition | Word TP
Contact Us

MUC Building
Jl. TB Simatupang 15
Jakarta Selatan 12530

+6221-788-37-111 (Hunting)

+6221-788-37-666 (Fax)

Graha Pena 15th floor
Jl. Ahmad Yani 88
Surabaya 60231



For more updates and information, drop us an email or phone number.

© 2020. PT Multi Utama Consultindo. All Rights Reserved.