Officially Promulgated: Tax Facilities Available at the IIFC

JAKARTA, DDTCNews — The Government has officially enacted Law (UU) 6/2026 on the Indonesia International Financial Centre (IIFC). This regulation serves as the legal foundation for establishing a financial center equipped with various tax facilities.

The establishment of the IIFC is intended to enhance Indonesia's competitiveness as an international financial centre. In addition, the IIFC aims to attract international financial institutions, investment funds and family offices.

"To achieve these objectives, this Law stipulates business activities at the IIFC, which include business activities in the financial sector, supporting business activities in the financial sector and business activities in other sectors," reads the Elucidation of Law 6/2026, cited on Friday (30/10/2026).

In addition to governing the establishment of the IIFC, Law 6/2026 also regulates the granting of tax facilities. These facilities are available to entrepreneurs, financial sector professionals, ad hoc judges and non-tax residents (subjek pajak luar negeri/SPLN in Indonesian) who fulfil the provisions.

The tax facilities comprise income tax; value added tax (VAT); sales tax on luxury goods (STLGs); and customs facilities. Special treatment in respect of inheritances is also provided. The following sets out the key points of the tax facilities regulated under Law 6/2026:

1. Income Tax Facilities. The details of income tax-related facilities are set out in Article 49 of Law 6/2026. Under that article, income tax incentives are provided through several schemes:
   • Exclusion from income tax on foreign-sourced income. This exclusion is granted to: (i) entrepreneurs; and (ii) financial sector professionals of foreign national (warga negara asing/WNA in Indonesian) status at the IIFC;
   • A 100% reduction in corporate income tax. This facility is available to entrepreneurs in the financial sector, supporting services and other sectors. It is also extended to the IIFC Management Institution (LP) and the IIFC Financial Services Supervisory Institution (LPJK);
   • Imposition of 0% final income tax. This facility applies to income received by certain financial professionals and foreign national ad hoc judges at the IIFC Court;
   • Exclusion from tax resident status. This facility is granted to foreign nationals holding a golden visa who are registered with a family office at the IIFC, provided they do not derive income from active business activities or employment within Indonesian territory; and
   • Exclusion from Withholding Tax and/or Income TaxCollection. Non-tax residents are exempt from withholding tax on income derived from investment activities at the IIFC. The exemption from withholding tax and/or income tax collection also applies to transactions involving the purchase of ultra-luxury residences at the IIFC.
2. VAT, STLGs and Customs Facilities
   • VAT Not Collected: This facility is granted, inter alia, on imports of strategic taxable goods (barang kena pajak/BKP in Indonesian) and supplies of certain taxable goods and/or taxable services (jasa kena pajak/JKP in Indonesian). The objects covered include new buildings (landed houses, flats, office buildings, shopping centres, warehouses) and construction services for public facilities and infrastructure.
   • STLGs Exclusion: This facility is granted on the transfer of a group of luxurious residences to individuals, corporations or institutions operating or residing at the IIFC.
   • Import Duty Exemption: Law 6/2026 also provides an import duty exemption facility for imported goods used for the construction and development of IIFC infrastructure.
3. Special Treatment of Inheritances

Law 6/2026 explicitly confirms that inheritance tax shall not be applied at the IIFC. This provision applies provided that the assets are registered with a family office at the IIFC and the testator holds foreign national status and is registered with the family office.

It should be noted that Law 6/2026 was enacted on 19 August 2026. In addition to the tax facilities, the law also establishes the IIFC Court as a specialist court within the general judiciary.

See also the review of family offices in the DDTCNews focus article entitled Tax Aspects of Establishing a Family Office. (rig)