Investment in IIFC May Be Tax-Free for Foreign Investors
JAKARTA, DDTCNews - Income received by non-tax residents (subjek pajak luar negeri/SPLN in Indonesian) from investment activities at the Indonesia International Financial Centre (IIFC) will be exempt from withholding tax (WHT). This topic is among the reviews featured in the national media today, Wednesday (4/11/2026).
These facilities are granted under Law 6/2026 on the IIFC, which has been promulgation since August 2026 and has been in force from the date of promulgation.
"The income tax facility in the form of the exemption from withholding tax and/or income tax collection...shall be granted to non-tax residents...for income derived from investment activities...at the IIFC," reads Article 54 paragraph (1) of the IIFC Law.
Income derived from investment activities refers to interest, dividends, discounts, profits from transfers of assets in whatever name and form and distributions of profits of a permanent establishment (PE).
Without the incentive referred to in Article 54 paragraph (1), income received by non-tax residents in connection with investment activities at the IIFC would be subject to Article 26 WHT at 20%, or a lower rate according to the applicable tax treaty (persetujuan penghindaran pajak berganda/P3B in Indonesian).
Further provisions on the granting of income tax facilities will be regulated in a minister of finance regulation (MoF Reg.). Pursuant to Article 72 of the IIFC Law, the implementing regulations of the IIFC Law must be enacted no later than six months from the date of promulgation of the IIFC Law.
On another note, the IIFC is an area with financial and administrative autonomy and legal specificity that adopts, incorporates, applies or aligns with international principles and standards.
The central government may establish an IIFC through a government regulation (Gov. Reg.) following a proposal from the minister of finance. The proposal for the establishment of an IIFC must include a proposed location, stated capital and a feasibility study.
The IIFC is established to enhance Indonesia's competitiveness as an international financial centre, attract investment and financial sector participants, facilitate financing for the real sector and national strategic projects and strengthen the financial sector's contribution to the economy.
In addition to the above topic, there are reviews concerning the judicial review of the VAT Law, as amended by the Harmonisation of Tax Regulations (HPP) Law. There are also discussions relating to digital taxation, airline ticket tax incentives, Indonesia's financial system amidst global pressures and other matters.
Below is the full review of the tax-related articles.
Tax Incentives for Family Offices in the IIFC
Law 6/2026 also offers a range of tax incentives for the activities of family offices.
Article 51 paragraph (1) of the IIFC Law affirms that a 100% corporate income tax reduction incentive is granted for financial sector business activities as specified in Article 5 paragraph (1) of the IIFC Law. A family office is one of the activities covered under Article 5 paragraph (1).
"The income tax facility in the form of the corporate income tax reduction…shall be granted in the amount of 100% to entrepreneurs conducting business activities at the IIFC in the financial sector; supporting sectors in the financial sector; and other sectors…," reads Article 51 paragraph (1) of the IIFC Law. (DDTCNews)
DGT: VAT Collection Agents in SPP-TDLN to Be Added Shortly
The Directorate General of Taxes (DGT) will optimise the tax collection system for cross-border digital transactions (sistem pemungutan pajak atas transaksi digital luar negeri/SPP-TDLN in Indonesian), which is applied to collect VAT on the utlisation of digital taxable goods or taxable services from overseas.
DGT Director of Tax Dissemination, Service and Public Relations, Inge Diana Rismawanti, stated that 6 parties (issuers) have been appointed as VAT collection agents through the SPP-TDLN mechanism, and that the number will be increased in the near future.
She added that other prospective issuers are currently in a stabilisation period. "For the time being, the SPP-TDLN scheme will be optimised," she said. (DDTCNews/Kontan)
Suahasil Clarifies Taxation on Inter-Bank Transfers
Minister of Finance, Suahasil Nazara, clarified issues that have recently emerged regarding digital taxation, including the notion of imposing tax on inter-bank transfers.
Suahasil asserted that the government does not impose VAT collection on the movement of public funds between banks or on transfers between digital wallets.
"I wish to affirm here that there is no new tax policy that automatically imposes VAT on every inter-bank transfer or digital wallet transaction," he said at the Financial System Stability Committee (Komite Stabilitas Sistem Keuangan/KSSK in Indonesian) press conference. (DDTCNews/Bisnis Indonesia)
HPP Law Challenged, Sanitary Pads in the Spotlight
An applicant named Bernita Matondang has filed a judicial review of Article 16B paragraph (1a) subparagraph j number 1 of the VAT Law, as amended by Law 7/2021, on the Harmonisation of Tax Regulations (Harmonisasi Peraturan Perpajakan/HPP in Indonesian).
In her application, the applicant requests that the Constitutional Court declare Article 16B paragraph (1a) subparagraph j number 1 of the VAT Law, as amended by the HPP Law, to contradict Article 28D paragraph (1) of the 1945 Constitution.
According to the applicant, the provision has not provided a normative guarantee that the determination of basic necessities that are urgently needed by the general public is carried out on the basis of objective, rational and proportionate criteria, including by taking into account menstrual hygiene needs. (DDTCNews)
Airlangga on VAT Incentives on Airline Tickets to Curb Inflation
The government believes that discounts on public transport fares — including through a 100% government-borne (ditanggung pemerintah/DTP in Indonesian) VAT incentive on airline tickets and a 50% reduction in airport tax — are capable of mitigating inflationary pressures.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the reduction in transport fares during Christmas 2026 and New Year 2027 will offset price increases in the volatile food component.
"This inflation is driven by volatile food items, i.e., food and beverages, bird's eye chillies, fresh fish and air transport. However, we have a discount programme ahead of Christmas and New Year. As such, those price increases will be compensated with discounts," he said. (DDTCNews)
MoF: Indonesia's Financial System Stable Amidst Global Pressures
The Financial System Stability Committee (Komite Stabilitas Sistem Keuangan/KSSK in Indonesian) assessed that the stability of Indonesia's financial system in the third quarter of 2026 remained intact.
Minister of Finance and KSSK Chairperson, Suahasil Nazara, stated that this condition is reflected in resilient domestic economic growth and well-maintained financial intermediation.
"The results of the KSSK assessment indicate that fiscal, monetary and financial sector stability throughout the third quarter of 2026 remained well-maintained, supported by close policy coordination and synergy amongst the authorities," he said. (DDTCNews)