International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

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


Winds of change: Indonesia targets customs improvements through KITE facilities

Sponsored by


Irsan Pratama and Jeklira Tampubolon of GNV Consulting summarise important updates to the rules governing Indonesia’s Import Facility for Export Purposes, and the exportation of palm oil, palm olein, and cooking oil.

The Indonesian Ministry of Finance (MoF) has issued two regulations as part of its Import Facility for Export Purposes (Kemudahan Impor Tujuan Ekspor, or KITE) with the aim of improving customs services. The regulations are designed to simplify procedures; expand supply chains and export channels; accommodate the development of business process activities; refine policies in the field of import duty facilities on the importation of goods for export purposes; and increase competitiveness, investment, and national exports.

The regulations, which have been effective since November 1 2022, are as follows:

  • MoF Regulation No. 145/PMK.04/2022 concerning Refund of Import Duty that Has Been Paid on Import of Goods and Materials to be Processed, Assembled, or Installed on Other Goods for the Purpose of Export. This regulation revokes MoF Regulation No. 161/PMK.04/2018.

  • MoF Regulation No. 149/PMK.04/2022 concerning Exemption of Import Duty and Non-Collection of Value Added Tax or Value Added Tax and Luxury Goods Sales Tax on Import of Goods and Materials to be Processed, Assembled, or Installed on Other Goods for the Purpose of Export. This regulation revokes MoF Regulation No. 160/PMK.04/2018.

The main changes in the new MoF regulations are as follows:

  • New requirements for obtaining the KITE facility:

    • The business entity must be a taxable enterprise that was not previously regulated;

    • The applicant must install CCTV to monitor incoming, storage, and releasing of goods, and the CCTV should be accessible by the Indonesian Customs Authority;

    • The list of raw materials and finished goods should be included with the harmonised system code at eight-digit level; and

    • The requirement that the KITE facility holder must submit a conversion formula before starting production has been removed.

  • Reporting:

    • The new regulations require the KITE facility holder to submit annual reports on June 30 at the latest (previously, the deadline was the end of the fourth month after the end of the fiscal year); and

    • Under the KITE Exemption, in the event that the licence has expired and/or been revoked, the facility holder is required to submit a liability report within 60 days after the expiry date of the KITE facility (the previous stipulation was within 30 days).

  • Sources of raw material and/or goods to be further processed:

    • The raw material and/or goods can be sourced from:

      • Importation – outside the customs territory and a Bonded Logistics Centre; and

      • Local – a bonded warehouse, a bonded zone, a bonded exhibition zone, a free trade zone (FTZ), a special economic zone, and/or another economic zone.

  • Guarantee (applicable for a KITE Exemption facility):

    • Under the new regulations, the guarantee can be in the form of a cash guarantee, a bank guarantee, a customs bond, an Indonesia Eximbank guarantee, or a corporate guarantee.

  • Unloading:

    • Under a subcontract arrangement, the unloading of imported goods can be performed at the subcontractor’s premises, provided that the KITE facility holder has obtained approval from the Customs Office.

New regulation on palm oil, palm olein, and cooking oil

The government has also issued Minister of Trade (MoT) Regulation No. 50 of 2022 concerning Export Procedures for Crude Palm Oil, Refined, Bleached, and Deodorised Palm Oil, Refined, Bleached, and Deodorised Palm Olein, and Used Cooking Oil.

The provisions for the exportation of these products apply to the following:

  • The release of goods from the Indonesian Customs Territory to outside the Customs Territory;

  • The release of goods from an FTZ to outside the Customs Territory;

  • The issuance of export licences is based on export rights, which can be transferred to other parties by submitting an application for the transfer of export rights electronically to the Director General through the Indonesian National Single Window System (SINSW); and

  • Exports carried out by exporters that have obtained export approval are subject to:

    • Export duty in accordance with the provisions of the laws and regulations concerning the determination of export goods subject to export duty; and

    • The rate for public service agencies of the Palm Oil Plantation Fund Management Agency in accordance with the provisions of the laws and regulations concerning the determination of goods subject to the rate for the Palm Oil Plantation Fund Management Agency's public services.

The summary of goods under export restrictions is stipulated in the Attachment of MoT Regulation No. 50 of 2022 and has been effective since October 7 2022.

more across site & bottom lb ros

More from across our site

A steady stream of countries has announced steps towards implementing pillar two, but Korea has got there first. Ralph Cunningham finds out what tax executives should do next.
The BEPS Monitoring Group has found a rare point of agreement with business bodies advocating an EU-wide one-stop-shop for compliance under BEFIT.
Former PwC partner Peter-John Collins has been banned from serving as a tax agent in Australia, while Brazil reports its best-ever year of tax collection on record.
Industry groups are concerned about the shift away from the ALP towards formulary apportionment as part of a common consolidated corporate tax base across the EU.
The former tax official in Italy will take up her post in April.
With marked economic disruption matched by a frenetic rate of regulatory upheaval, ITR partnered with Asia’s leading legal minds to navigate the continent’s growing complexity.
Lawmakers seem more reticent than ever to make ambitious tax proposals since the disastrous ‘mini-budget’ last September, but the country needs serious change.
The panel, the only one dedicated to tax at the World Economic Forum, comprised government ministers and other officials.
Colombian Finance Minister José Antonio Ocampo announced preparations for a Latin American tax summit, while the potentially ‘dangerous’ Inflation Reduction Act has come under fire.
The OECD’s two-pillar solution may increase global tax revenue gains by more than $200 billion a year, but pillar one is the key to such gains due to its fundamental changes to taxing rights.