What Are the Effects of Transferring Tax Allowance Authority to BKPM?

By Editorial Team 05/08/2020
Tax system
Summary

The Investment Coordinating Board (BKPM) finally has full authority over the submission of tax allowance incentives from investors. So far, the authority to grant tax allowance lies in the hands of the Finance Ministry. This transfer of authority refers to the issuance of the Finance Ministerial Regulation (PMK) No. 96/PMK/0.10/2020 concerning Amendments to the Amendment of PMK No. 11/PMK.011/2020 on the Implementation of Government Regulation No. 78/2019 concerning Income Tax Facilities for Investment in Certain Field and/or certain Regions.

The new tax allowance regulation applies as of August 11, 2020. It is mentioned in PMK No. 96/2020 that investors who want to get income tax (PPh) facilities must register themselves through the Online Single Submission (OSS), which is a portal owned by BKPM. Although the tax allowance submission moves through BKPM, the Finance Ministry, as the fiscal authority, determines the recipient of the tax allowance. "The decision on granting income tax facilities is determined by the Finance Minister," as stated in Article 8, Paragraph 1 of PMK No. 96/2020.

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