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Dear members,
The breakfast meeting was held successfully on March 22nd 2007 at Le Meridien Hotel Jakarta, sponsored by AIRFRANCE / KLM. It features Mr. Yari Yuhari as the head of Sub Directorate of public relation in The Directorate General of Taxes who was replacing Mr. Djoko Slamet Surjo Putro who had to cancel his attendance due to the important meeting in the last minute with his Excellency Mr. Susilo Bambang Yudhoyono.
The topic itself discussed the Income Tax Facilities for investment in certain sectors and or in specific regions. Here is the resume you could consider for your business investment concerning the new government regulation taxation in Indonesia.
Mr. Yari Yuhari explained it is necessary to provide Income Tax Facilities in line with Article 31 A of Income Tax Law to promote the direct investment in order to spread and accelerate development in Indonesia. The meaning of investment refers to the forms of fixed assets, including the land they use for main activities of the business, whether it is new investment or the expansion of the existing.
The Minister of Finance, Mrs. Sri Mulyani, issues the decision to provide Income Tax Facilities that given:
- Net income deductions as much as 30 % of total investment, expensed in 6 years or 5 % per year
- Accelerated depreciation and amortization
- Income Tax imposed on dividend paid to non tax resident on a rate of 10 %
- Loss carry forward for longer than 5 years but not exceed than 10 years
Mr. Yari Yuhari also stated that tax payers who already have tax facilities on their business within Integrated Economic Development Zone (KAPET), based on Government Regulation (GR) number 20 of 2000 concerning Tax Treatment in KAPET as last amendment by Government Regulation number 147 of 2000 are no longer eligible for tax facilities since January 1st 2007.
Furthermore, Mr. Yari Yuhari stated that under Tax Holidays Facilities, there is no Corporate Income Tax for five years, even though the company receives gain. But, under Income Tax Facilities based on Government Regulation No. 1/2007, the company gets investment allowance of 30 % in 6 years period, accelerated depreciation, loss carry forward more than 5 years is up to 10 years.
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