All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

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


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 & bottom lb ros

More from across our site

Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
ITR is delighted to reveal all the shortlisted firms, teams, and practitioners for the 2022 Americas Tax Awards – winners to be announced on September 22
‘Care’ is the operative word as HMRC seeks to clamp down on transfer pricing breaches next year.
Tax directors tell ITR that the CRA’s clampdown on unpaid taxes on insurance premiums is causing uncertainty for businesses as they try to stay compliant.
HMRC has informed tax directors that it will impose automated assessments on online sellers with inaccurate VAT returns, in a bid to fight fraud.
UK businesses need to reset after the Upper Tribunal ruled against BlackRock over interest deductions it claimed on $4 billion in inter-company loans, say sources.
Hong Kong SAR’s incoming regime for foreign income exemptions could remove it from an EU tax watchlist but hand Singapore top spot in APAC.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree