On 20 December 2022, the Indonesian government issued Government Regulation No. 55 of 2022 on the Adjustment of Regulations in the Field of Income Tax (“GR 55/2022”). This regulation is one of a series of government regulations issued in December 2022 as the implementing regulations of Law No. 7 of 2021 on Tax Regulation Harmonization (“HPP Law”). Several regulations related to income tax (i.e., GR 18/2009, GR 23/2018, and GR 30/2020) are no longer valid, and have been consolidated through the issuance of GR 55/2022. GR 55/2022 mainly provides confirmation and a detailed explanation of income tax provisions under the HPP Law. These include income tax on benefits-in-kind, anti-tax avoidance measures, and international tax agreements.

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.