IIFC Law: Requirements for Tax-Exempt Inheritances in Family Offices
JAKARTA, DDTCNews - The Government has confirmed that no tax is levied on inherited assets managed by family offices at the Indonesian International Financial Centre (IIFC). This provision is set out in Article 61 of Law 6/2026.
This provision is designed, among others, to attract family offices and global conglomerates. In addition, the confirmation forms part of the facilities intended to support the establishment of a competitive IIFC.
"Taxes on inheritance are not imposed in the IIFC," reads an excerpt from Article 61 of Law 6/2026, cited on Friday (6/11/2026).
Pursuant to Article 61 of Law 6/2026, the inheritance tax exemption at the IIFC does not apply automatically; rather, 2 cumulative conditions must be satisfied:
- the inherited assets are registered with a family office at the IIFC; and
- the heirs/heiresses constitute foreign nationals (warga negara asing/WNA in Indonesian) registered with a family office at the IIFC.
In addition to the inheritance incentive, Law 6/2026 also provides tax residence relaxation for foreign nationals registered with a family office at the IIFC. Pursuant to Article 53 of Law 6/2026, foreign nationals holding a golden visa registered with a family office may be excluded from tax resident (subjek pajak dalam negeri/SPDN in Indonesian) status.
This exclusion is granted provided they do not carry out active business activities or are bound by direct employment within Indonesian territory. The exclusion from tax resident status applies, insofar as the relevant foreign national's golden visa remains valid.
On another note, a family office is a private entity or private wealth management firm established to manage the wealth of ultra-high-net-worth individuals (UHNWI) or families. See What Is a Family Office?
Unlike conventional financial institutions, a family office does not merely manage family wealth; it also develops long-term investment strategies. The objective is to help families preserve their wealth across generations (Medina, 2023). See Examining the Tax Aspects of Establishing a Family Office
Meanwhile, inheritance tax is a tax on assets whereby the tax liability arises only upon the death of the asset owner, at which point the assets are passed on to the heirs/heiresses.
From a domestic regulatory perspective, Indonesia does not have specific provisions on inheritance tax. Under the Indonesian tax system, inheritances transferred by a deceased person to their beneficiaries are excluded from taxable objects. See What Is Inheritance Tax? (dik)