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

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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

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

Sponsored by

sponsored-firms-gnv.png
intl-updates-small.jpg

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 & shared bottom lb ros

More from across our site

It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
New French legislation should create a more consistent legal environment for taxing gains from management packages, say Bruno Knadjian and Sylvain Piémont of Herbert Smith Freehills Kramer
The South Africa vs SC ruling may embolden the tax authority to take a more aggressive approach to TP assessments, an adviser tells ITR
Indirect tax professionals now rate compliance as a bigger obstacle than technology and automation; in other news, Italy approved a VAT cut on art sales
AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
Gift this article