Special Economic Zones (SEZ)

Tax Holiday

Applies to income received or earned from the Main Activities carried out, as regulated in PMK 237/2020 in conjunction with PMK 33/2021 and Perdenas KEK No. 2/2021.

• 100% Corporate Income Tax reduction for 10 years
• 50% Corporate Income Tax reduction for 2 years

Tax Allowance

Applies to activities outside the main activities of the SEZ, as regulated in PMK 237/2020 in conjunction with PMK 33/2021.

1. 100% Corporate Income Tax reduction for a period of:
   • 10 years for an investment value of IDR 100 billion to less than IDR 500 billion
   • 15 years for an investment value of IDR 500 billion to less than IDR 1 trillion
   • 20 years for an investment value of more than IDR 1 trillion​
2. 50% Corporate Income Tax reduction for a period of 2 years
3. Facilities (for other Activities, investment value below IDR 100 billion): Tax Allowance

Value Added Tax (VAT) and Luxury Goods Sales Tax (LGST)

Not imposed on:

• Delivery of certain tangible taxable goods from bonded logistics storage areas (TLDDP), free zones, and bonded warehouses to Business Entities and/or Business Actors;
• Import of certain tangible taxable goods into SEZs by Business Entities and/or Business Actors;
• Import of consumer goods into tourism SEZs by Business Entities and/or Business Actors; and other similar cases.

Import Duty

• Exempted for purposes of SEZ development or expansion.
• For SEZs that have completed development, import duties are exempted for consumer goods, and duty deferment is available for business activities within the SEZ.
• For monitoring purposes, part or all of an SEZ may be designated as a Customs Area.

Excise

Exempted for raw materials or auxiliary materials used in producing final goods that are not subject to excise.

Import-Related Taxes

• No Import Duty is collected on capital goods imported for SEZ development or expansion.
• For SEZs that have completed development, Import-Related Taxes are not imposed.
• Import Duty rate of 0% applies for goods with a minimum local content (TKDN) of 40%.

Goods subject to import and export regulations may be granted exemptions and/or relaxations.

1.Taxation, Customs, and Excise

• Facilities and conveniences related to Corporate Income Tax, VAT, Luxury Goods Sales Tax, Import Duty, Import Taxes, and Excise
• Application of Corporate Income Tax reductions on income from main activities
• Exemption from VAT and Luxury Goods Sales Tax for certain activities
• All SEZs may be designated as Customs Areas, with duty or excise deferral/exemption
• Additional tax facilities in Tourism SEZs
• Reduction or exemption of regional taxes/levies for Business Entities/Business Actors in SEZs of at least 50%

2.Goods Traffic

• Import of goods into SEZs is not yet subject to import restrictions or trade regulations
• Imported goods used in SEZs are not yet required to comply with Indonesian National Standards (SNI)- Implementation of import and export regulations is carried out through a nationally integrated electronic system

3.Manpower / Employment

• Approval and extension of Foreign Manpower Utilization Plans (RPTKA) in SEZs- Extension of Work Permits for Foreign Workers (IMTA) in SEZs
• Establishment of a special Tripartite Cooperation Institution

4.Immigration

• Visa on Arrival (VKSK) valid for 30 days, extendable up to 5 times for 30 days each
• Multiple-entry visas for foreign nationals​​

5.Land and Spatial Planning

• Implementation of land acquisition
• Land services and special procedures for granting, extending, and renewing land rights
• Facilitation and coordination of spatial planning​​

6.Business Licensing

• Issuance of business licenses for Business Entities and Business Actors in SEZs by the SEZ Administrator through the OSS system
• Business licensing is implemented based on a risk-based approach​