Indonesia’s Omnibus Law continues to impact the business, tax, and regulatory landscape. In this article, we note new income tax exemptions for dividend and offshore income in Indonesia as well as reduced withholding tax rate on bond interest, taxation of foreigners, and VAT treatment during the pre-production period. Indonesia introduced Government Regulation 9 of 2021 (GR 9/2021) and its implementing regulation under the Ministry of Finance Regulation 18 0f 2021 (PMK 18/2021) in February 2021 that makes amendments to the country’s income tax law, and value-added tax law (VAT). The two regulations aim to provide a relaxation of income tax and a more business friendly approach to VAT, among others, as the government continues to reform the tax system to support the ease of doing business in Indonesia. These regulations are part of the 76 or so amended regulations initiated by Indonesia’s Omnibus Law , which represents the first time in the country’s legal history where such ... » Learn More about What Are the Changes in Tax Treatment Under Indonesia’s Omnibus Law?
Editorial board (The Jakarta Post) PREMIUM Jakarta ● Wed, September 15 2021 The government’s decision to cut the income tax on bond interests from 15 to 10 percent for domestic investors as of September will be a great boon in encouraging retail investors to buy government and corporate bonds, not only because the interest income from time deposits at banks is still subject to a final tax of 20 percent, but the interest of time deposits has also declined to a range of only 2.5 to 3 percent a year. Even though the new policy is also aimed at establishing income tax parity between domestic and foreign investors, the lower tax is also expected to deepen the financial market and make bonds more liquid. Earlier in February, the government slashed the income tax on bond interest for foreign investors from 20 to 10 percent as global investors have become net sellers of late. The reduced tax rate applies to any income received or gained... to Read Full Story ... » Learn More about Expanding bond market