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Indonesia tax update: guidelines for benefits-in-kind and new procedure for collecting outstanding tax

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Jeklira Tampubolon and Reza Farhan of GNV Consulting Services review a host of Indonesian tax developments, including more clarity on the income tax treatment of benefits-in-kind and updated processes for collecting outstanding tax.

Further guidelines on benefits-in-kind (BIK)

To provide more legal certainty and equity of income tax treatment on BIK, the Ministry of Finance (MoF) issued a new regulation, No. 66 of 2022, concerning the income tax treatment on BIK (“PMK-66/2023”).

Some salient points taken from PMK-66/2023 are as follows: 

  • PMK-66 provides more clarity on the types of facilities that can be claimed as deductible from the employer's gross income, to reduce the company's taxable income. Various forms of facilities provided by companies can be used as tax-deductible expenses, if they are included as expenses to obtain, collect, and maintain income; and

  • PMK-66 has specified in more detail the types of facilities that can be exempted from income tax objects as follows:

    • a. Food and drinks for all workers in the workplace;

    • b. BIK for employees who work in certain areas (including facilities, infrastructure, and/or facilities at work locations for employees and their families);

    • c. BIK that must be provided by the employer for employees to carry out the work; 

    • d. BIK and/or benefits of certain types and/or limitation (as shown below); and





Gift provided by the employer in the form of groceries, beverage ingredients, food and/or drinks in the context of religious holidays

Enjoyed by all employees


Gift provided from the employer other than for religious holidays

a.     Enjoyed by employees; and

b.    Maximum IDR 3 million (approx. $200) in total per employee/year


Work equipment and facilities provided by employers to employees for carrying out their work, including computers, laptops or cell phones along with their support such as usage units and internet connections

a.     Enjoyed by employees; and

b.    To support their job


Health and medical service facilities from the employer

a.     Enjoyed by all employees; and

b.    Provided in the context of handling:

-        Work accidents

-        Work-related illness

-        Life-saving emergencies; or

-        Follow-up treatment because of work accidents and work-related illness


Sports facilities from the employer excluding facilities for golf, horse racing, motorised boat racing, gliding and/or automotive sports

a.     Enjoyed by employees; and

b.    Maximum IDR 1.5 million in total per employee/year


Communal residential facilities

Enjoyed by all employees


Residential facilities from employers whose utilisation rights are held by individuals, including apartments or landed houses

a.     Enjoyed by employees; and

b.    Maximum IDR 2 million in total per employee per year


Vehicle facilities from the employer

Enjoyed by employees who:

a.     Are non-shareholders

b.    Have average gross income in the last 12 months of up to IDR 100 million per employee/tax year from the employer


Contribution to pension funds whose establishment has been approved by the OJK (Indonesian Financial Services Authority) which is borne by the employer

Enjoyed by employees


Religious facilities including prayer rooms, mosques, chapels or temples

Intended solely for worship activities


BIK and/or benefits received or earned in 2022

Enjoyed by employees or service providers

  • e. BIK and/or benefits obtained from government.

Withholding of tax on said BIK and/or benefits is done at the end of the month when:

  • a. The income concerned is transferred or becomes due, whichever event occurred first; or

  • b. The transfer of rights or part of the rights to the utilisation of a facility and/or service by the provider for benefits occurs.

The provisions regarding the withholding of Article 21 income tax on benefits in kind and benefits by the provider must be applied starting from July 1 2023. However, the income received by the employee (during the January 2023 - June 2023 tax period) must be calculated, self-remitted and reported by the recipient in the 2023 annual personal income tax return.

Procedures for collecting outstanding tax

On June 9 2023, the MoF issued a new regulation, Number 61 (“PMK-61”), regarding procedures for the collection of outstanding tax. Through this regulation, the MoF has now revoked Regulations No. 85/KMK.03/2002, 23/PMK.03/2006 and 189/PMK.03/2020.

The main points of this regulation are as follows:

  • A stipulation for the tax collection of tax bearers for individual taxpayers or corporate taxpayers. Tax collection can be conducted on a tax bearer which:

    • a. Is declared bankrupt;

    • b. Is dissolved, liquidated, or its legal entity status ends;

    • c. Is involved in a merger;

    • d. Is involved in an amalgamation; and/or

    • e. Is involved in a split-up.

  • The tax collection activities which must be carried out in connection with non-payment of outstanding tax are detailed as follows:

    • a. Warning letter;

    • b. Distress warrant;

    • c. Confiscation of goods;

    • d. Auction of goods;

    • e. Banned from leaving Indonesia;

    • f. Hostage; and

    • g. Instant tax collection.

  • Under PMK-61, the Directorate General of Taxes (DGT) and official treaty partners can assist each other with implementing tax collection. This applies to collection conducted by the DGT based on international agreements (i.e. tax treaties, tax conventions on mutual administrative assistance, or other bilateral/ multilateral agreements) on a reciprocal basis.

Compliance procedure for excisable goods entrepreneurs

The Directorate General of Customs and Excise has issued Regulation No. PER-10/BC/2023, dated May 29 2023, concerning the compliance procedure for excisable goods entrepreneurs. 

The principles for implementing compliance checks of excisable goods entrepreneurs are as follows:

  • Fiscal safeguards;

  • Orderly administration; and

  • Guidance.

Compliance inspection of excisable goods entrepreneurs and excise facility users is conducted for: 

  1. Ethyl alcohol (EA) factory entrepreneurs;

  2. Beverage containing ethyl alcohol (MMEA) factory entrepreneurs;

  3. Tobacco products (HT) manufacturers;

  4. EA importers;

  5. MMEA importers and/or exporters;

  6. Importers and/or exporters of HT;

  7. Storage place entrepreneurs;

  8. Distributors;

  9. Retail point of sale entrepreneurs;

  10. Final product entrepreneurs; and/or

  11. Persons related to the compliance of excisable goods entrepreneurs.

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