Indonesia—Implementing regulation on Income Tax Law issued

Government Regulation Number 55 of 2022 (PP-55) issued by the Indonesian government on 20 December 2022 and effective as from that date implements the income tax provisions of Law Number 7 of 2021 regarding the Harmonisation of Tax Regulations (Harmonisasi Peraturan Perpajakan [HPP Law]).

Some significant developments resulting from PP-55 that require immediate attention from taxpayers are clarification of the taxation of BIK provided by employers to their employees as from fiscal year (FY) 2022, new measures to prevent tax avoidance, changes to the provisions relating to depreciation and amortisation of assets with a useful life of more than 20 years, and amendments to the final income tax regime. In general, the provisions for other topics covered under PP-55 are aligned with the existing regulations issued by the Ministry Of Finance. However, taxpayers may wish to review the full text of the regulation to evaluate its potential impact on their current or proposed activities.

For further information, please contact Melisa Himawan and Muslimin Damanhuri.