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Scirj Volume IV, Issue IX, September 2016 Edition
ISSN: 2201-2796


Dr. H. Djafar Al Bram

Abstract: Tax Holiday is one form of the investment facilities that was provided by the Government to investors who like to invest in Indonesia. This provision is stipulated in the article 18 of the Law No. 25 Year 2007 on investment. This tax facility is different from those mentioned in the Article 31A of the Law Number 7 of 1983 concerning income tax that has been amended few times into the Act No. 36 of 2008. The facility given is in the form of exemption or reduction of corporate income tax for strategic industries. However, the study that examined the detail of this fiscal policy is limited. For that reason, this study, using legal official documents and other secondary sources, aims at examining and discussing procedures and mechanism to have a granting exemption facility of income tax for the new investment in the pioneer industry. The study found that there are at least seven regulations that support the granting exemption facility of the income tax. The length of corporate income tax exemption was for a maximum period of ten taxable years and the five-year minimum taxable years since the fiscal year when the commercial production begin. The taxpayers will be granted the exemption facility or reduction of corporate income tax if they have fulfilled at least four criteria. There are team and institutions that conduct an evaluation of the use of the exemption facility or reduction of corporate income taxes. Also, the investors must submit periodical report to the Head of The Investment Coordinating Board every 6 months period. Finally, the time length of verification documents to have a granting approval for the exemption facility for the income tax will be within a maximum period of 30 working days after the proposal have been received by the Minister of Industry or the Head of the Investment Coordinating Board.

Reference this Paper: GRANTING THE EXEMPTION FACILITIES OF INCOME TAX FOR NEW INVESTMENTS IN INDONESIA by Dr. H. Djafar Al Bram published at: "Scientific Research Journal (Scirj), Volume IV, Issue IX, September 2016 Edition, Page 63-69 ".

Search Terms: tax holiday, corporate income tax, granting exemption facility, pioneer industry, foreign and domestic investments

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