The Carbon Tax was introduced in Law No. 7/2021 on Harmonization of Tax Regulation. The Carbon Tax will be imposed on carbon emissions that have a negative impact on the environment. The law stated that the Carbon Tax would be applied starting on 1 April 2022 for coal fired power plants. The law requires an implementing regulation in the form of a Minister of Finance regulation to stipulate the tariff and basis of the Carbon Tax, and a government regulation to stipulate the tax subject and tax object. There has to be consultation on the regulations with the Indonesian parliament.
Scrutiny by tax authorities can only be expected to intensify because of the pandemic’s impacts on the global economy and tax revenues. As companies themselves recover and reassess their affairs post-pandemic, timely resolution of tax disputes is ever-critical. To help you understand tax dispute resolution options available by jurisdiction, the…
The Indonesian government has expanded the tax incentives given to taxpayers that are affected by COVID-19. Some taxpayers that were not entitled to tax incentives under Minister of Finance Regulation No. 44/PMK.03/2020 (“MOF Regulation 44”) may now enjoy those tax incentives under Minister of Finance Regulation No. 86/PMK.03/2020 (“MOF Regulation 86”). MOF Regulation 86, which revokes MOF Regulation 44, came into force on 16 July.
The Minister of Finance has issued Minister of Finance Regulation Number 67/PMK.03/2020 (‘MoF 67/2020’) on the Provisions of Value Added Tax Or Value Added Tax And Sales Tax on Luxury Goods, as well as Land And Building Tax Facilities In Upstream Oil And Gas Business Activities Under Gross Split Production Sharing Contract.
MoF67/2020 provides tax facilities during the exploration and exploitation phases until the commencement of Commercial Production, in the form of:
Value Added Tax (‘VAT’) or VAT and Sales Tax on Luxury Goods payable are not levied.
Land and Building Tax is reduced up to 100%.
MoF 67/2020, which was published on 15 June 2020 and effectively came into force by 15 July 2020, also regulates the procedures to obtain the facilities.
The government has expanded the tax incentives given to taxpayers that are affected by COVID-19. Some taxpayers that were not entitled to tax incentives under Minister of Finance Regulation No. 23/PMK.03/2020 (“MOF Regulation 23”) may now enjoy those tax incentives under Minister of Finance Regulation No. 44/PMK.03/2020 (“MOF Regulation 44”). The government has also expanded the types of tax for which tax incentives are given.
MOF Regulation 44, which revokes MOF Regulation 23, came into force on 27 April.
The Directorate General of Taxation has also issued Circular Letter No. SE29/PJ/2020 on 30 April 2020 as an implementing regulation of MOF Regulation 44.
In brief Recent developments The Indonesian government recently issued Government Regulation in Lieu of Law, Peraturan Pemerintah Pengganti Undang-Undang, No. 1 of 2020 (“Perppu 1/2020”) to mitigate the economic impact of the outbreak of Coronavirus Disease 2019 (COVID-19). This will allow more state spending and financial relief efforts to help the…