Indonesia: Indonesia releases tax regulations on food and beverage provisions to employees

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Indonesia: Indonesia releases tax regulations on food and beverage provisions to employees

Sponsored by

sponsored-firms-gnv.png
intl-updates-small.jpg

On December 19 2018, Indonesia's Minister of Finance (MoF) issued regulation No. 167/PMK.03/2018 (PMK-167) regarding the provision of food and beverages to all employees, and compensation in the form of benefit in kind (BIK) in certain regions that can be deducted from gross income. PMK-167 replaces the previous regulation: MoF Regulation No. 83/PMK.03/2009 (PMK-83). The benefit in kind that can be deducted from the employer's gross income are as follows.

Provision of food and beverages

The provision of food and beverages to all employees relating to the performance of work is covered by the regulation. The provision also covers food and beverage coupons given to employees who are unable to enjoy those food and beverages in the workplace, i.e. employees in marketing, transportation and on other business trips.

Benefit in kind related to region of work

Compensation in the form of a BIK is provided in relation to work in a certain region in order to support government policies to encourage development in that certain region. The compensation covers residence (including housing), health services, education, religious services, transportation, and sports (excluding golf, power boating, horse racing, and gliding).

In relation to transportation in the new BIK regulation, PMK-167 specifically governs that it is only related to the beginning and the end of an assignment. The certain region facility is given for a period of five years, and it can be extended for another five years, provided the location still meets the requirements as a "certain region". Especially for special mining business license (IUPK) holders, the period of "certain region" is 10 years and can be extended for another 10 years, provided the location still meets the requirements as a "certain region".

Benefit in kind related to safety

Provision of a BIK in situations where it is a necessity to carry out the work with safety equipment or because of the nature of the work requires it are also included. The benefit shall be related to the workers' safety as required by a government institution handling manpower. BIK covered include:

  • Clothing and safety equipment;

  • Uniforms for security personnel;

  • Shuttle transport for employees;

  • Lodging for ship crews and the like; and/or

  • Taxpayer's vehicles that are used by certain employees.

If the BIK has use for more than one year, it should be expensed through depreciation. If not, then it is directly expensed.

Especially for vehicles used by certain employees, 50% of the depreciation and the maintenance expense is allowed to be a tax-deductible expense.

This regulation is effective from December 19 2018.

more across site & shared bottom lb ros

More from across our site

E-invoicing is currently characterised by dynamism, with fragmentation acting as a key catalyst for increasing interoperability, says Aida Cavalera of the International Observatory on eInvoicing
Pillar two and the US tax system ‘could work in harmony’, Scott Levine tells ITR in an exclusive interview to mark his arrival at Baker McKenzie
Peter White, who has a tax debt of A$2 million, has been banned for five years from seeking registration with Australia’s Tax Practitioners Board (TPB)
Wopke Hoekstra’s comments followed US measures aimed against ‘unfair foreign taxes’; in other news, Grant Thornton and Holland & Knight made key tax partner hires
An Administrative Review Tribunal ruling last month in Australia v Alcoa represents a 'concerning trend' for the tax authority, one expert tells ITR
A recent decision underlines that Indian courts are more willing to look beyond just legal compliance and examine whether foreign investment structures have real business substance
Following his Liberal Party’s election victory, one source expects Mark Carney to follow the international consensus on pillar two, as experts assess the new administration
A German economics professor was reportedly ‘irritated’ by how the Finnish ministry of finance used his data
Countries that care about the fair taxation of tech multinationals and equitable global distribution of wealth should back the UN’s tax framework, writes economist Abdelmalek Riad
The cuts disproportionately affected staff in certain positions, the report also found; in other news, MHA announced the €24m acquisition of Baker Tilly South East Europe
Gift this article