Indonesia: Tax holiday extended for “pioneer industry” | KPMG | GLOBAL

Indonesia: “Tax holiday” extended for “pioneer industry” entities

Indonesia: Tax holiday extended for “pioneer industry”

The Indonesian government has renewed “tax holiday” incentives for entities in “pioneer industries.” The incentives include corporate income tax reductions for a period between five years and 15 years.


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The tax holiday is available for companies and permanent establishments that were established after 15 August 2011 (the effective date of the initial tax holiday guidance). The entity’s business activities must be classified as being in a “pioneer industry.” The entity must satisfy investment threshold amounts and a debt-to-equity ratio of 4:1, among other items. Eligible entities also must provide a commitment letter, stating that they will keep at least 10% of the approved investment plan amount on deposit in Indonesian banks.

The list of pioneer industries includes basic metals, petroleum and refining, industrial machinery, renewable resources, and telecommunications equipment.

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