IIFC Law Includes Special Clauses on Inheritance Tax and Seed Capital

JAKARTA, DDTCNews – The Law on Indonesia International Financial Centre (IIFC Law), approved by the House of Representatives (Dewan Perwakilan Rakyat/DPR in Indonesian) at a plenary session, contains various special tax provisions that were not included in the initial draft.

The newly added provisions not included in the initial draft cover special tax treatment of inheritance and seed capital in the IIFC.

"There are also provisions on tax treatment of inheritance and tax treatment of seed capital in the IIFC," said Deputy Chairperson of House Commission XI, Mohamad Hekal, at the plenary session, as quoted on Tuesday (21/7/2026).

Beyond that, the IIFC Law also contains clauses on tax reporting rights and obligations, tax administration and penalties related to the utilisation of tax facilities.

Tax facilities included in the initial draft and retained under the agreed IIFC Law text include income tax, value added tax (VAT)/sales tax on luxury goods (STLGs) and customs facilities.

"We hope this IIFC Draft Law can become our collective effort and endeavour to realise a resilient national economy through the optimisation of investment development and the strengthening of the financial sector in maintaining the balance, advancement and unity of the national economy," said Hekal.

For information, income tax incentives available at the IIFC include a 100% corporate income tax reduction for entrepreneurs conducting financial business activities at the IIFC, financial sector supporting business activities at the IIFC or non-financial business activities at the IIFC.

Beyond that, professionals in the financial services sector at the IIFC may also obtain a 100% income tax reduction. Foreign nationals holding a golden visa at the IIFC are also excluded from being tax residents (subjek pajak dalam negeri/SPDN in Indonesian).

Non-tax residents (subjek pajak luar negeri/SPLN) are eligible for the exemption from withholding tax/income tax collection facility in respect of income derived from investment at the IIFC.

Regarding VAT facilities, those contained in the IIFC Law include VAT not collected on supplies of certain strategic taxable goods and taxable services, such as new buildings, capital goods for the development of the IIFC, property rental services, construction services and other taxable goods/services.

STLGs facility in the form of an exclusion also applies to supplies of luxury residences to those conducting business activities, serving duties and domiciled at the IIFC.

Finally, an import duty exemption facility applies to imports of goods and materials for the construction and development of the IIFC. (rig)