Taking stock: Indonesian tax changes include bonded logistics centres amendment
Aditya Wicaksono and Irsan Pratama of GNV Consulting report on an update to the rules concerning bonded zones in Indonesia and summarise two new income tax-related regulations enacted at the start of 2024
The implementation of bonded logistics centres
Indonesia’s Directorate General of Customs and Excise (DGCE) issued PER-23/BC/2023 on December 14 2023, regarding the Third Amendment on the Implementation of Bonded Logistics Centres.
There are additions to Article 1, paragraphs 8a, 8b, and 8c, as follows:
A bonded zone is a bonded stockpile (TPB) to store imported goods and/or goods originating from other places within the customs territory to be processed or combined before being exported or imported for use;
A bonded zone operator that is also a bonded zone entrepreneur is a legal entity engaged in the management and operation of a bonded zone; and
An entrepreneur in a bonded zone that is also an operator in the bonded zone is a legal entity engaged in the operation of a bonded zone located within the bonded zone owned by the bonded zone operator, which has a different legal entity status.
There are additional changes to the bonded logistic centres (PLBs) operator's licence, the PLB entrepreneur’s licence, or PDPLB licence that can be made on behalf of a company, supported by changes to the most recent deed and business licence that already uses the new company name.
For licence changes in the form of transferring a tax identification number to a different entity, there are the following provisions:
The old PLB permit is revoked, and a new PLB permit is issued, following the requirements for revocation and establishment of a PLB; and
The inventory balance from the old PLB becomes the opening balance of the new PLB.
The transfer of PLB goods to another TPB shall be carried out by installing an electronic security seal or other type of seal based on a risk assessment by the customs office.
The correction of data elements that have obtained a registration number may be made by the head of the customs office, based on an application letter from the PLB operator, PLB entrepreneur, or PDPLB, or the authority of the head of the customs office itself. This is done on the basis of oversight and without an element of intent.
The following customs documents are used.
BC 2.7 is used for:
The importation of goods owned by a bonded zone from the bonded zone to a PLB;
The return of goods owned by a bonded zone that had been entrusted to a PLB, from the PLB to the original bonded zone; and
The exportation of goods from a bonded zone that had been entrusted to a PLB, from the PLB to another bonded zone.
BC 2.5 is used for the exportation of entrusted goods from a bonded zone containing imported elements, from a PLB to other areas within the Indonesian customs territory for importation for use; and
BC 4.1 is used for the exportation of entrusted goods from a bonded zone that originate from elsewhere within the customs territory, from a PLB to another location within the customs territory.
The regulation became effective on January 13 2024.
Exemption from income tax on certain land and/or buildings transactions
On December 15 2023, the DGCE issued Regulation PER-8/PJ/2023, which provides for an exemption from income tax on income received from the transfer or sale and purchase of land or buildings and any amendments.
The exemption can be obtained through the issuance of an income tax exemption certificate, which is obtained by submitting an application for each transfer of rights to land and/or a building, or agreement to bind the sale and purchase of land and/or a building and its amendments. An exemption letter is issued if the individual or entity meets the requirements described in Article 4, paragraph (3).
Business entities that obtain income from the transfer of rights to land and/or buildings, or agreements to bind the sale and purchase of land and/or buildings and their changes in special economic zones receive a corporate income tax (CIT) reduction facility of 100% of the amount of CIT payable for ten tax years and 50% of the amount of CIT payable for two tax years after the end of the 10-year period.
The CIT reduction facility is provided through the issuance of a certificate of income tax exemption on the income received or obtained by the business entity from the transfer of rights to land and/or buildings, or sale and purchase agreements on land and/or buildings and their amendments in the special economic zones.
For corporate taxpayers’ sale or transfer of residential houses or residences classified as ‘very luxurious’, income tax is still payable on the sale of goods classified as very luxurious, except for the sale of residential houses or residences classified as very luxurious in a tourism special economic zone. The facility of exemption from income tax collection is provided through the issuance of a certificate of exemption from income tax collection on the sale of residential houses or dwellings classified as very luxurious in a tourism special economic zone.
The regulation became effective on December 15 2023.
Article 21 income tax withholding rate on certain types of individual income
The issuance of Government Regulation (PP) No. 58 Year 2023 on December 27 2023 set forth provisions on Article 21 income tax calculation for income related to employment, services, or activities of individual taxpayers.
The regulation revokes the provisions of Article 2, paragraph (3) of PP No. 80 Year 2010.
The main change of PP No. 58 Year 2023 from PP No. 80 Year 2010 is related to the effective rate imposed on gross income, both on a monthly and daily basis. This rate applies for tax periods except for the last tax period. In the last tax period, the calculation of Article 21 income tax uses the income tax rate of Article 17, paragraph (1) of the Income Tax Law.
The monthly effective rate is categorised based on the amount of non-taxable income according to the marital status and number of dependants of the taxpayer at the beginning of the tax year. The monthly effective rate is divided into three categories:
Category A is applied to an unmarried couple without dependants, an unmarried couple with one dependant, or a married couple without dependants;
Category B is applied to an unmarried couple with two or three dependents, and a married couple with one or two dependants; and
Category C is applied to married couples with three dependants.
The effective rates also apply on a daily basis. The rate is determined together with the amount of gross daily income for each rate.
The regulation became effective on January 1 2024.