Tax Update! - March 2025

INTRODUCTION

As we enter March 2025, the Directorate General of Taxes (DGT) has introduced several important updates to Indonesia’s tax regulations that are crucial for taxpayers, tax consultants, and business practitioners to be aware of. This month’s update includes adjustments to the list of institutions eligible to receive zakat and religious donations deductible from gross income, as well as the temporary relaxation of administrative sanctions for individual taxpayers related to the filing of annual tax returns.

These policy updates reflect the government’s ongoing efforts to provide legal certainty, encourage voluntary compliance, and integrate social-religious values into tax administration. By updating the list of approved religious donation recipients, the government ensures accountability and regulatory alignment in the management of religious and social funds.

In addition, recognizing the overlap of tax obligations with national religious holidays such as Nyepi and Eid al-Fitr, the DGT has introduced a grace period: administrative sanctions for late filing and/or payment of 2024 Individual Annual Income Tax Returns will be waived until April 11, 2025, although the official deadline remains March 31, 2025. This policy demonstrates the DGT’s commitment to responsive and compassionate public service.

In this edition, we cover the key highlights:

• PER-3/PJ/2025, which introduces the updated list of government-approved zakat and religious donation recipients;
• KEP-79/PJ/2025, which outlines the temporary policy for the removal of administrative penalties due to religious holidays.

We hope this newsletter provides helpful insights and supports your tax planning and compliance. Happy reading!

REGULATION OF THE DIRECTOR GENERAL OF TAXES NUMBER PER-3/PJ/2025
CONCERNING THE FOURTH AMENDMENT TO THE REGULATION OF THE DIRECTOR GENERAL OF TAXES NUMBER PER-04/PJ/2022 ON INSTITUTIONS OR BODIES ESTABLISHED OR APPROVED BY THE GOVERNMENT DESIGNATED AS RECIPIENTS OF ZAKAT OR MANDATORY RELIGIOUS DONATIONS THAT CAN BE DEDUCTED FROM GROSS INCOME

In March 2025, the government updated the list of Institutions or Bodies designated as recipients of zakat or government-approved mandatory religious donations, so that zakat or religious donations can be deducted from gross income.

Under this regulation, the government-authorized Institutions and Bodies include:

1. National, Provincial, and Regency/City Amil Zakat Agencies (BAZNAS);
2. Zakat, Infaq, and Shadaqah Management Institutions (LAZIS) of Nahdlatul Ulama and Muhammadiyah;
3. 49 National Zakat Management Institutions;
4. 93 Regional (Regency/City level) Zakat Management Institutions;
5. 3 Christian Religious Donation Receiving and Managing Institutions;
6. 1 Catholic Religious Donation Receiving Institution;
7. 8 National-Level Buddhist Mandatory Religious Social Fund Management Institutions;
8. 1 Provincial-Level Buddhist Mandatory Religious Social Fund Management Institution;
9. 1 Hindu Mandatory Religious Donation Receiving and Managing Institution;
10. 1 Confucian Mandatory Religious Donation Managing Institution.

DECREE OF THE DIRECTOR GENERAL OF TAXES NUMBER KEP-79/PJ/2025
CONCERNING THE POLICY ON ELIMINATION OF ADMINISTRATIVE SANCTIONS FOR LATE PAYMENT OF ARTICLE 29 INCOME TAX PAYABLE AND/OR SUBMISSION OF ANNUAL INCOME TAX RETURNS FOR INDIVIDUAL TAXPAYERS FOR FISCAL YEAR 2024
IN CONNECTION WITH NATIONAL HOLIDAYS AND COLLECTIVE LEAVE FOR NYEPI (SAKA NEW YEAR 1947) AND EID AL-FITR 1446 HIJRIYAH

The Directorate General of Taxes provides compensation related to the payment and filing of Annual Income Tax Returns for Individual Taxpayers coinciding with several religious holiday observances.

The due date for payment and filing of 2024 Individual Annual Income Tax Returns remains March 31, 2025. However, administrative sanctions for late submission and/or payment are waived until April 11, 2025.