Indonesia recently enacted significant changes regarding the Tax Holiday, regulated by Minister of Finance Regulation No. 130/PMK.03/2021. These changes aim to provide clarity and incentives for taxpayers, particularly concerning investments and production realization. Let's delve into some key points from these amendments.
1. Submission Process via OSS to MoF
The Online Single Submission (OSS) system remains the main gateway for taxpayers to apply for a tax holiday. Upon approval, taxpayers are obligated to submit annual reports on investments and production realization.
2. Timely Consequences
PMK-130 mandates that the obligation to submit annual reports must be fulfilled within 30 days after the end of the year. Failure to do so can result in a warning letter from the Directorate General of Taxation (DGT) and potentially trigger a tax audit.
3. Proposal Submission Deadline
It is crucial to note that proposals for Tax Holiday can only be submitted up to four years after the effective date of PMK-130, precisely until October 8, 2024.
4. Transition Provisions
PMK-130 also includes relevant transition provisions:
- Taxpayers who have obtained Tax Holiday under the old regulations can continue using the facility until the end of the period.
- Tax Holiday submissions by taxpayers outside pioneer industries with undecided criteria will be processed according to PMK-130, with a commitment to realizing investment plans.
- Taxpayers licensed by OSS since November 27, 2018, until the issuance of PMK-130 can apply for Tax Holiday following the updated conditions.
- Taxpayers granted Tax Holiday under the old regulations but have not utilized it can apply for usage under PMK-130, with reporting and commercial production determination based on previous DGT regulations.