INTRODUCTION
At the beginning of 2025, the
Indonesian government has introduced several new tax policies aimed at
supporting economic growth, enhancing taxpayer compliance, and providing
incentives for specific sectors. In response to global and national economic
dynamics, tax regulations continue to be adjusted to effectively stimulate
businesses and the public.
This newsletter summarizes the
latest Minister of Finance Regulations (PMK) issued in February 2025, covering
various aspects of taxation, including income tax incentives (PPh Article 21),
changes in Value Added Tax (VAT) regulations, incentives for electric vehicles,
and new procedures for tax audits and investigations.
Some key policies highlighted in
this edition include:
- PMK Number 10 of 2025 – Government-borne PPh 21
incentives for employees in specific sectors as an economic stimulus.
- PMK Number 11 of 2025 – Adjustments to the tax
base calculation for Value Added Tax (VAT).
- PMK Number 12 of 2025 – VAT and Luxury Goods
Sales Tax (PPnBM) incentives for battery-based electric vehicles with
specific local content requirements (TKDN).
- PMK Number 13 of 2025 – Government-borne VAT for
the sale of landed houses and apartment units.
- PMK Number 15 of 2025 – Reformation of tax audit
procedures, introducing three new types of tax audits.
- PMK Number 17 of 2025 – Regulations on the
investigation of tax crimes to enhance legal certainty and taxpayer
compliance.
With these latest regulations,
taxpayers, both individuals and businesses, are expected to understand the
policy changes and optimize the benefits provided. This newsletter aims to
deliver clear and concise information regarding the latest tax policies and
their implications for various business sectors and the broader public.
MFR NUMBER 10 OF 2025 CONCERNING INCOME TAX
ARTICLE 21 ON CERTAIN INCOME BORNE BY THE GOVERNMENT IN THE CONTEXT OF ECONOMIC
STIMULUS FOR THE 2025 FISCAL YEAR
The government provides
Government-Borne Income Tax 21 incentives which will take effect from February
4, 2025. This incentive is given on all gross income in 2025 received by
employees with a period of January 2025 to December 2025.
This incentive is given to certain
Employees, both Permanent Employees and/or Non-Permanent Employees of the
Employer with certain criteria, namely:
Conducting
business activities in the industrial sector:
1.
Footwear;
2.
Textiles and apparel;
3.
Furniture; or
4.
Leather and leather goods.
Certain
Permanent Employees must meet the following criteria:
a.
Have an TIN or NIN that has been integrated
with the Directorate General of Population and Civil Registration and the
Directorate General of Taxes;
b.
Receiving a fixed and regular gross income
of not more than IDR 10,000,000 on:
1.
January 2025 Tax Period, for certain
employees who start working before January 2025; or
2.
The first month of employment Tax Period,
for certain employees who have just worked in 2025; and
c.
Do not receive Income Tax 21 incentives
borne by other governments.
Certain
Non-Permanent Employees must meet the following criteria:
a.
Have a TIN or NIN that has been integrated
with the Directorate General of Population and Civil Registration and the
Directorate General of Taxes;
b.
Receive wages in the amount:
1.
The average of 1 day is not more than IDR
500,000 in terms of wages received on a daily, weekly, unit, or wholesale
basis; or
2.
Not more than IDR 10,000,000 in terms of
wages received or earned on a monthly basis;
c.
Do not receive Income Tax 21 incentives
borne by other governments.
Employers
are required to report the use of incentives for each Tax Period in the
Periodic Tax Return every month.
MFR
NUMBER 11 OF 2025 CONCERNING OTHER VALUE PROVISIONS AS THE BASIS FOR IMPOSITION
OF TAXES AND CERTAIN AMOUNTS OF VALUE-ADDED TAX
After the Government provides the
provisions of the Other Value Tax Base of 11/12 which applies to VAT
calculations, in addition to the VAT imposed with the Other Value Tax Base
which has been regulated separately and VAT with a certain amount.
MFR Number 11 of 2025 provides similar
provisions that apply to VAT with the separately regulated Other Value Tax Base
and VAT with a certain amount. The amended provisions include:
1.
MFR Number 75/MFR.03/2010 concerning Other
Values as the Basis for Imposition of Tax;
2.
MFR Number 102/MFR.011/2011 concerning Other
Values as a Basis for Imposition of Tax on the Utilization of BKPTB from
Outside the Customs Area in the Customs Area in the form of Imported Story
Films and Submission of Import Story Films, as well as the Basis for Collection
of Income Tax 22 on Import Story Film Import Activities;
3.
MFR Number 6/MFR.03/2021 concerning the
Calculation and Collection of VAT and Income Tax on Submission in connection
with the sale of Credit, Starter Packs, Tokens, and Vouchers;
4.
Regulation of the Minister of Finance Number
173/MFR.03/2021 concerning Procedures for Payment, Payment, and Administration
of Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods on the
Delivery of Taxable Goods and/or Taxable Services from and/or to Free Trade
Zones and Free Ports;
5.
Regulation of the Minister of Finance Number
62/MFR.03/2022 concerning VAT on the Delivery of Certain LPG;
6.
Regulation of the Minister of Finance Number
63/MFR.03/2022 concerning VAT on the Delivery of Tobacco Products;
7.
Regulation of the Minister of Finance Number
66/MFR.03/2022 concerning Value Added Tax on the Delivery of Subsidized
Fertilizers for the Agricultural Sector;
8.
Regulation of the Minister of Finance Number
79 of 2024 concerning Tax Treatment in Operating Cooperation.
VAT
with a Certain Amount:
1.
Regulation of the Minister of Finance Number
62/MFR.03/2022 concerning Value Added Tax on the Delivery of Certain Liquefied
Petroleum Gas;
2.
Regulation of the Minister of Finance Number
64/MFR.03/2022 concerning Value Added Tax on the Delivery of Certain
Agricultural Products;
3.
Regulation of the Minister of Finance Number
65/MFR.03/2022 concerning Value Added Tax on the Delivery of Used Motor
Vehicles;
4.
Regulation of the Minister of Finance Number
71/MFR.03/2022 concerning Value Added Tax on the Delivery of Certain Taxable
Services;
5.
Regulation of the Minister of Finance Number
41 of 2023 concerning Value Added Tax on the Delivery of Collateral
Expropriated by Creditors to Collateral Buyers;
6.
Regulation of the Minister of Finance Number
48 of 2023 concerning Income Tax and/or Value Added Tax on the Sale/Delivery of
Gold Jewellery, Gold Bars, Jewellery Made of Materials Not Made of Gold,
Gemstones and/or Other Similar Stones, as well as Services related to Gold Jewellery,
Gold Bars, Jewellery Made of Materials Not Made of Gold, and/or Gemstones
and/or Other Similar Stones, carried out
by Gold Jewellery Manufacturers, Gold Jewellery Traders, and/or Gold Bullion
Entrepreneurs;
7.
Regulation of the Minister of Finance Number
81 of 2024 concerning Tax Provisions in the Context of the Implementation of
the Core System of Tax Administration.
MFR
NUMBER 12 OF 2025 CONCERNING VALUE-ADDED TAX ON THE DELIVERY OF CERTAIN
FOUR-WHEELED BATTERY-BASED ELECTRIC MOTOR VEHICLES AND CERTAIN BUS
BATTERY-BASED ELECTRIC MOTOR VEHICLES AS WELL AS SALES TAX ON LUXURY GOODS ON
THE DELIVERY OF CERTAIN TAXABLE GOODS CLASSIFIED AS LUXURY IN THE FORM OF
CERTAIN LOW-CARBON ELECTRIC EMISSION FOUR-WHEELED MOTOR VEHICLES BORNE BY THE
GOVERNMENT FOR THE 2025 FISCAL YEAR
The government again provides VAT and
PPnBM incentives for the Delivery of Certain Four-Wheeled-Based Electric
Motorized Vehicles and Certain Buses. This is regulated in MFR Number 12 of
2025.
KBL that receives this facility must
meet the TKDN value criteria as follows:
a.
Certain Four-Wheeled Battery-Based KBL with
a minimum TKDN value of 40%;
b.
Certain Bus Battery-Based KBL with a minimum
TKDN value of 40%;
c.
KBL Based on Certain Bus Batteries with a
minimum TKDN value of 20% to less than 40%.
So
there are 2 schemes in this VAT incentive, namely:
1.
Electric Cars and Electric Buses with a
minimum TKDN (Domestic Component Level) of 40%, then VAT BORNE BY THE
GOVERNMENT is 10%. So that the buyer only pays VAT of 2%.
2.
Electric Buses with a minimum TKDN (Domestic
Component Level) of 20% to less than 40%, then VAT BORNE BY THE GOVERNMENT is
5%. So that the buyer only pays VAT of 7%.
In
addition, this MFR also regulates Sales Tax incentives on Luxury Goods Borne by
the Government for the Delivery of Certain Low Carbon Emission Four-Wheeled
Motorized Vehicles. Facilities that are 3% of the Selling Price.
MFR
NUMBER 13 OF 2025 CONCERNING VALUE-ADDED TAX ON THE HANDOVER OF LANDED HOUSES
AND FLATS UNITS BORNE BY THE GOVERNMENT FOR THE 2025 FISCAL YEAR
The
government continues the incentives that are always given every year, namely
Government-Borne VAT on VAT payable on the handover of landed houses and flats
for the 2025 Fiscal Year.
This
facility is provided on VAT when the handover occurs when:
1.
the signing of the sale and purchase deed
made by the official who made the land deed; or
2.
the signing of the binding agreement on the
sale and purchase in full before the notary,
and
an actual transfer of rights to use or control ready-to-live landed houses or
ready-to-live flats as evidenced by the minutes of the handover from January 1,
2025 to December 31, 2025.
This
Government-Borne VAT is given only for TAX BASE up to IDR 2 billion with a
maximum selling price of IDR 5 billion, as for the details:
1.
100% for the submission of the handover
minutes from January 1, 2025 to June 30, 2025.
2.
50% for the handover whose handover minutes
date is carried out from July 1, 2025 to December 31, 2025
Taxable
Entrepreneurs who make this submission are required to make a Tax Invoice in
accordance with the provisions of the law and the VAT realization report borne
by the Government.
MFR
NUMBER 15 OF 2025 CONCERNING TAX AUDIT
The
government has issued new provisions regarding Tax Audit which will be
promulgated on February 10, 2025. This provision replaces the provisions that
have been previously issued, including:
1.
MFR Number 17 of 2014 concerning Tax Audit
Procedures;
2.
MFR Number 256 of 2014 concerning Procedures
for Land and Building Tax Audit and Research;
3.
MFR Number 18 of 2021 concerning Job
Creation Implementation Regulations
Points
of Change in MFR 15 of 2025:
1.
In Article 2 Chapter II, there are 3 types
of new tax audits, namely:
a.
Complete audit – Thoroughly test tax
compliance with all posts in the tax return and/or SPOP. For example, the
examination of the Annual Income Tax Return, VAT Periodic Return, Luxury Tax,
and Land Tax. The period of this examination is 5 months.
b.
Focused examination – Examine one or more
posts in the tax return or SPOP in depth. The tax auditor will provide a
written notice to the taxpayer regarding the post being inspected. The term is
3 months.
c.
Specific checks – Conducted to verify a
specific post in a tax return, tax data, or other tax liability with a simpler
procedure. For example, verification of withholding Income Tax 21 on employee
salaries. The term is 1 month.
2.
In Article 6 Chapter IV, tax audits for
other, such as transfer pricing and financial transaction engineering, now have
an extension period of up to 4 months.
3.
Article 12 of the Fourth Part which
stipulates that taxpayers must submit the requested data within 1 month. If the
deadline is exceeded, the documents provided may be considered non-submitted.
The tax auditor is also required to prepare a Minutes that record the
fulfillment of documents by taxpayers.
4.
In situations where the documents provided
are insufficient or make the examination difficult, the tax auditor may
calculate taxable income by position. If indications of tax crimes are found,
the examiner may propose an examination of the Preliminary Evidence.
5.
In Article 18 paragraph (2) of the Eighth
Section, the period for taxpayers response to the Audit Result Notification
Letter (SPHP) is changed from 7 working days to 5 working days.
MFR
NUMBER 17 OF 2025 CONCERNING THE INVESTIGATION OF CRIMINAL ACTS IN THE FIELD OF
TAXATION
The government
provides legal certainty for the implementation of criminal investigations in
the field of taxation. MFR Number 17 of 2025 was issued to replace the previous
provision, namely MFR Number 55/MFR.03/2016 concerning Procedures for
Requesting the Termination of Criminal Investigation in the Field of Taxation.
This MFR has 10 Chapters which
include:
1.
General Provisions
2.
Scope
3.
Investigation Basis
4.
Investigation Activities
5.
Termination of Investigation for the Sake of
State Revenue
6.
Request for Information on Losses on State
Revenue
7.
Handling Investigations Outside Indonesian
Jurisdiction or Across State Borders
8.
Document Submission
9.
Transitional Conditions
10. Closing
Provisions
Investigations
in the field of Taxation can be carried out by DGT Investigators who have the
authority to carry out the investigation process. Types of Tax Crimes that Can
Be Investigated include:
1.
Submission of incorrect or incomplete tax
returns;
2.
Use of fictitious Tax Invoices;
3.
Not depositing the tax that has been
collected;
4.
Manipulation of bookkeeping or Financial
Statements;
5.
Violation of Article 39A of the KUP Law
(Document Falsification).
The
Investigation Stage is as follows:
1.
Examination of Preliminary Evidence;
2.
Issuance of Investigation Warrants;
3.
Examination and Collection of Evidence;
4.
Submission of Files to the Prosecutors
Office
If
the suspect or taxpayer is willing to pay off all state losses and pay
administrative sanctions, the Minister of Finance can submit an application for
termination of the investigation to the Attorney General.