Draft Regulation of the Minister Aligns Tax Holiday and Global Minimum Tax

Government is finalizing a draft Regulation of the Minister of Finance on the Second Amendment to Regulation of the Minister of Finance No. 130/PMK.010/2020 on the Granting of Corporate Income Tax Deduction Facilities, as amended by Regulation of the Minister of Finance No. 69 of 2024 (collectively referred to as “Regulation 130/2020”). This step ensures that fiscal incentives remain “attractive” to strategic investors amid the implementation of a 15% global minimum tax rule.

“We continue to make adjustments to the Tax Holiday. The focus is on ensuring Indonesia’s investment appeal remains intact,” said Febrio Kacaribu, Head of the Fiscal Policy Agency (BKF) at the Ministry of Finance.

The government is expanding and redefining the scope of pioneer industries eligible for the Tax Holiday. The focus has now shifted to the downstream processing of natural resources, renewable energy, and the semiconductor industry, which have strong global supply chains.

This is supported by an integrated verification process for investment realization that is linked to the Online Single Submission (“OSS”) and Coretax systems. “It’s still in progress and targeted for this year,” he added.