Misbakhun Confirms PFII Will Still Refer to GMT Agreement
Jakarta, CNBC Indonesia – The Indonesian International Financial Centre (PFII) will provide attractive taxation facilities to investors. Nevertheless, these facilities will remain guided by the Global Minimum Tax (GMT) agreement.
This was affirmed by Mukhamad Misbakhun, Chair of Commission XI of the House of Representatives (DPR), to CNBC Indonesia on Thursday (23/7/2016).
“The law already stipulates that investors are granted a 50-year tax exemption. But of course we are aware of changes in the international tax landscape, and we follow all of that,” he said.
“The mechanism is already in place; we just need to see whether the companies investing in PFII fall within the scope of the global minimum tax or not. If not, it means they can still enjoy the tax exemption for 50 years,” Misbakhun asserted.
The GMT is a global agreement that has been implemented in more than 60 countries. Indonesia is on that list, having applied the GMT since 1 January 2025, along with Singapore, Malaysia, Hong Kong and the UAE.
Within PFII, the GMT rules will also apply to covered Multinational Enterprises (MNEs), namely multinationals with global turnover of at least 750 million euros.
The scheme for MNE groups operates through the Qualified Domestic Minimum Top-up Tax (QDMTT) imposed by the country of the subsidiary, the Income Inclusion Rule (IIR) imposed by the country of the parent entity, and the Undertaxed Payment Rule (UTPR) imposed by other countries in the group.
This implementation will not create additional taxation if the business operator is an individual and not part of an MNE with global turnover below 750 million euros. Furthermore, business operators in PFII whose effective tax rate is above 15% after consolidation with their subsidiaries outside PFII in Indonesia will not be affected.
“Beyond the tax holiday, investors, business operators and experts there will also be granted various other facilities, such as exemptions from income tax collection for SPLN, as well as various VAT and luxury goods sales tax (PPnBM) facilities,” he explained.
PFII is the implementation of Article 248A of Law Number 4 of 2026 concerning Amendments to Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK), which mandates the regulation of the Indonesian International Financial Centre through separate legislation.
PFII is a strategic step to act as a catalyst for deepening the financial market, diversifying instruments and funding sources, increasing investment, and strengthening Indonesia’s position as part of the global financial ecosystem.