Tax incentives offered to new investors<\/p>\n
JAKARTA (JP): The Indonesian government is offering new
\ninvestors in pioneering industries income tax holidays of up to
\neight years in a new bid to boost investment in the country.<\/p>\n
The additional tax facilities are laid out in Presidential
\nDecree No.7\/1999 and take immediate effect.<\/p>\n
They apply to 22 categories of industry, including textiles,
\nchemicals, pharmaceuticals, steel, seamless pipes, turbine
\nengines, automotive components, machine tools, processing
\nmachines, heavy machinery components, oil refineries, electronics
\ncomponents, information technology, instrumentation equipment and
\noil and mining equipment.<\/p>\n
New investments in the 22 industries located in Java and Bali
\nwill receive a three-year tax holiday, while investments located
\nelsewhere in the country will receive a five-year tax holiday.<\/p>\n
An additional one-year tax exemption is available to projects
\nwhich employ a minimum of 2,000 workers and a second one-year tax
\nbreak is available for ventures which are at last 20 percent
\nowned by cooperatives. Both conditions must be met at the start
\nof commercial operations.<\/p>\n
A third one-year tax break can be obtained by projects worth
\nUS$200 million and over, not including land and buildings.<\/p>\n
Losses incurred during the period of tax relief cannot be
\ndeducted from taxable profits after the facility ends.<\/p>\n
Unlike tax exemptions offered by the Soeharto administration,
\nwhich were granted directly by the president to individual
\nventures on a case-by-case basis, all new investors in the 22
\nindustries stand to gain from the new facilities on offer.<\/p>\n
The decree states that tax exemption shall begin at the start
\nof commercial operations, or five years after the project is
\nlicensed, which ever comes first.<\/p>\n
If a project begins operating in less than five years after
\nbeing licensed, time remaining within the five-year construction
\nperiod can be added onto the period of tax exemption.<\/p>\n
If construction exceeds five years, the tax holiday will be
\nshortened by the extra time spent on construction.<\/p>\n
The state minister of investment\/chairman of the Investment
\nCoordinating Board (BKPM) has the authority to grant tax breaks
\nto domestic and foreign investment projects licensed by BKPM.<\/p>\n
Tax holidays for domestic investment projects licensed by
\nagencies other than BKPM are awarded at the discretion of the
\nminister of finance.<\/p>\n
The decree stipulates that tax exemptions should be awarded on
\nthe basis of recommendations made by the Team for the Assessment
\nof Tax Incentives for Certain Industries.<\/p>\n
Categories of chemical and pharmaceutical industries entitled
\nto the new exemptions includes olefins and aromatics, phenol,
\nbutadiene, caprolactam, polycarbonate resin, methyl tertiary
\nbutyl, phenacetine, antibiotics, antipyrene and aminopyridine.<\/p>\n
Only oil refineries outside Java and Bali are entitled to the
\ntax breaks. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/tax-incentives-offered-to-new-investors-1447893297",
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"sponsor": "Okusi Associates",
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