Government Yet to Finalise Alternative Incentives for Investors Amid Global Minimum Tax Implementation
JAKARTA, DDTCNews - The government has yet to complete the formulation of alternative incentives to be offered to investors following the implementation of the global minimum tax in Indonesia under Minister of Finance Regulation (PMK) 136/2024.
Minister of Investment and Downstream Industries/Head of the Investment Coordinating Board (BKPM) Rosan Roeslani said the new incentives are being reviewed by the Ministry of Finance (Kemenkeu).
"They are still under review by the Ministry of Finance and the Coordinating Ministry for Economic Affairs," he said on Tuesday (29/4/2025).
The government has been promising the formulation of alternative incentives since last year. New forms of incentives are needed to maintain investment attractiveness and provide compensation to taxpayers benefiting from tax holidays.
As a result of the implementation of the global minimum tax at a rate of 15 per cent, taxpayers receiving tax holidays may be required to pay additional tax, or top-up tax, equivalent to the difference between the minimum rate and their effective rate.
"We have informed tax holiday recipients that if this [global minimum tax] is implemented, there will be adjustments. However, they should not worry as we can provide incentives in other forms," Rosan said last year.
The global minimum tax applies to multinational enterprise groups with revenue of at least €750 million in at least two of the four tax years preceding the year in which the global minimum tax is imposed.
If a constituent entity of a multinational enterprise group pays tax at an effective rate of less than 15 per cent, the entity will be subject to additional tax equal to the difference between the effective rate and the 15 per cent minimum rate.
The income inclusion rule (IIR) and qualified domestic top-up tax (QDMTT) under PMK 136/2024 officially came into effect from 2025, whilst the undertaxed payment rule (UTPR) is set to take effect from next year.
Minister of Investment and Downstream Industries/Head of the Investment Coordinating Board (BKPM) Rosan Roeslani said the new incentives are being reviewed by the Ministry of Finance (Kemenkeu).
"They are still under review by the Ministry of Finance and the Coordinating Ministry for Economic Affairs," he said on Tuesday (29/4/2025).
The government has been promising the formulation of alternative incentives since last year. New forms of incentives are needed to maintain investment attractiveness and provide compensation to taxpayers benefiting from tax holidays.
As a result of the implementation of the global minimum tax at a rate of 15 per cent, taxpayers receiving tax holidays may be required to pay additional tax, or top-up tax, equivalent to the difference between the minimum rate and their effective rate.
"We have informed tax holiday recipients that if this [global minimum tax] is implemented, there will be adjustments. However, they should not worry as we can provide incentives in other forms," Rosan said last year.
The global minimum tax applies to multinational enterprise groups with revenue of at least €750 million in at least two of the four tax years preceding the year in which the global minimum tax is imposed.
If a constituent entity of a multinational enterprise group pays tax at an effective rate of less than 15 per cent, the entity will be subject to additional tax equal to the difference between the effective rate and the 15 per cent minimum rate.
The income inclusion rule (IIR) and qualified domestic top-up tax (QDMTT) under PMK 136/2024 officially came into effect from 2025, whilst the undertaxed payment rule (UTPR) is set to take effect from next year.