Income-Tax Concessions Amended for Certain Industries

With the aim of boosting labor-intensive investments, [1] Government Regulation No. 9 of 2016 (“Amendment”) was recently issued to amend Government Regulation No. 18 of 2015 on Income-Tax Concessions for Investment in Certain Fields and/or Areas (“2015 Regulation”). [2] In order to implement the above objective, the Amendment revises the types of businesses which are entitled to receive income-tax concessions, [3] by replacing the appendices set out under the 2015 Regulation. [4] The Amendment is of relevance to domestic corporate taxpayers who have already invested, or who are intending intend to invest in Indonesia.Income-Tax Concessions for Certain Business FieldsPursuant to the 2015 Regulation, domestic corporate taxpayers (“Taxpayers”) running businesses in certain fields are entitled to receive income-tax concessions. Such businesses refer to businesses working in certain economic sectors which are highly prioritized at the national level, as specified under Appendix I to the Amendment. [5] In this regard, Appendix I of the Amendment now lists 71 business fields which are entitled to receive income-tax concessions, while Appendix I to the 2015 Regulation only regulated 66 business fields. The additional businesses fields are as follows: [6]