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Indonesia: New income tax for REIT schemes enacted


Freddy Karyadi

Anastasia Irawati

Following the regulation under the 11th Economy Package, the Indonesian government has issued a new tax regulation for real estate investment trust (REIT) schemes.

Regulation No. 40 of 2016 (Regulation 40), which entered into force on October 17 2016, imposes an income tax on earnings from the transfer of real estate through REIT schemes to certain collective investment contracts.

Regulation 40 stipulates that when transferring real estate to a special purpose company (SPC) or collective investment contract (KIK) under certain schemes, a final income tax will be applied to the income received by the taxpayer for the transfer. The rate for the final income tax is 0.5% of the gross income arising from the transfer of such real estate. Before the new rules were introduced, the rate for this kind of final income tax was 5%. Under Regulation 40, the gross income covers:

  • The real value received by the SPC or the KIK, in cases where the taxpayer does not have a special relationship with the SPC or the KIK; or

  • The value that should be received by the SPC or the KIK in cases where the taxpayer has a special relationship with the SPC or the KIK.

Furthermore, the regulation states that the final income tax should be paid by the taxpayer before the signing of deeds, resolutions, agreements, or consents for the transfer of real estate by the competent authority (among others notaries, conveyancers, district head or camat, or other authorities that have the power to sign such documents pursuant to the relevant land laws and regulations).

The taxpayer must then send a notification on the transfer to the tax office where registered as a tax resident and obtain a fiscal statement from the head of the tax office.

However, the competent authority can only sign the deeds, resolutions, agreements, or consents on the transfer of the real estate if the taxpayer can provide the following requirements:

  • Delivering a copy of the tax payment letter (surat setoran pajak) and showing the original to the tax office;

  • Delivering the receipt of the notification sent to the tax office and the copy of the fiscal statement from the head of the tax office.

After signing the deeds, resolutions, agreements, or consents on the transfer, the competent authority must deliver a report on the signed documents to the Directorate General of Taxation of the Ministry of Finance.

Freddy Karyadi ( and Anastasia Irawati (

Ali Budiardjo, Nugroho, Reksodiputro, Law Offices

Tel: +62 21 250 5125


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