Income Tax Borne by the Government for Certain Incomes for the 2017 Budgetary Year

As an implementation of Article 4 (3b) of Law No. 18 of 2016 on the State Budget for the 2017 Budgetary Year, as amended by Law No. 8 of 2017 (“State Budget Law”), the Ministry of Finance (“Ministry”) has issued Regulation No. 126/PMK.010/2017 on Government-Borne Income Tax on Interest or Rewards of State Commercial Papers which are Issued through the International Market, and Third-Party Income on Services which are Provided to the Government for the Issuance and/or Repurchase/Exchange of State Commercial Papers through the International Market for the 2017 Budgetary Year(“Regulation 126/2017”). [1] Regulation 126/2017 sets out several types of income for which the income tax is to be borne by the government during the 2017 budgetary year, as described in the following two provisions: 1) Income Tax Borne by the Government; and 2) Expenditure on Government-Borne Income-Tax Subsidies.Income Tax Borne by the GovernmentThere are two types of income for which the income tax is to be borne by the government for the 2017 budgetary year (“Borne Income Tax”), specifically: [2]