The Government published the Ministry of Finance (MoF) Regulation (“Peraturan Menteri Keuangan” or “PMK”) No. 159/PMK.010/2015 related to the Provision for Corporate Income Tax Reduction Facility, or known as Tax Holiday to revise PMK No. 192/PMK.011/2014. This regulation is effective on August 16, 2015 and the changes are as follows:

• First, the format of the tax facility provision is no longer in the kind of tax exemption up to 0%, but in the form of a tax reduction. The reduction of corporate income tax is given at most 100% and at minimum of 10% of the amount of corporate income tax payable.
• Second, the maximum tenor (term) of the previous tax facility provided was 10 years. But now, it is extended up to 15-20 years.
• Third, the recipient sectors of the previous tax holiday are available only for 5 industries. Now, this tax holiday is dedicated to 9 industries, including:

1. Upstream metal industry;
2. Petroleum refining industry;
3. Organic basic chemicals industry derived from petroleum and natural gas;
4. Machinery industry that produces industrial machine;
5. Telecommunication, information, and communication industry; Additional sectors:
6. Processing industry based on agriculture, forestry, and fisheries products, e.g.: food crops, plantations, forestry, fisheries and livestock;
7. Marine transportation industry, e.g.: shipbuilding;
8. Processing industry which is a major industry in the Special Economic Zone (SEZ); and/or
9. Economic infrastructure other than those using the scheme of the Government and Enterprises Cooperation (“Kerjasama Pemerintah dan Badan Usaha” or “KPBU”), e.g : toll roads and power plants.