Politics · Indonesia · 3 hrs ago
Indonesia Will Not Extend Corporate Tax Holiday
Indonesia will not extend its corporate tax holiday, a tax break for companies that reduces corporate income tax.
The Finance Ministry says the incentive conflicts with the global minimum tax, which Indonesia has applied since 2025.
That policy sets a minimum effective tax rate of 15% for multinational groups with annual revenue of at least €750 million.
Under the current rules, investors had to apply for the tax holiday by 31 December 2025.
Companies already receiving the tax holiday can keep it until it expires, but they may owe top-up tax if their effective rate is below 15%.
Other incentives, including tax allowances and accelerated depreciation, are considered compatible with the minimum-tax rules.
Indonesia’s Finance Ministry says it will not extend the corporate income tax holiday.
The tax holiday application deadline under the regulation was December 31, 2025.
Senior fiscal policy analyst Melani Dewi Astuti said the incentive is incompatible with the global minimum tax policy.
Indonesia has applied the global minimum tax since 2025, setting a 15% effective tax rate for qualifying multinational groups.
Existing tax holiday recipients may keep using the benefit until it expires, but may owe top-up tax if their effective rate is below 15%.
- Who
- Indonesia’s Finance Ministry. Senior fiscal policy analyst Melani Dewi Astuti explained the decision.
- What
- The government will not extend the corporate income tax holiday.
- When
- The application deadline was December 31, 2025. Melani discussed the policy on November 4, 2026.
- Where
- Indonesia.
- Why
- The tax holiday is incompatible with the global minimum tax policy because it can lower an entity’s effective tax rate.
This story does not have two clearly opposing sides.
Indonesia began applying the global minimum tax policy.
The deadline passed for applications for the corporate income tax reduction under the regulation.
The global minimum tax regime’s Substance-based Tax Incentive Safe Harbour was launched.
Melani Dewi Astuti said at a tax outlook seminar that the tax holiday would not be extended.
- Application deadline
- December 31, 2025
- Minimum effective tax rate
- 15%
- Multinational group revenue threshold
- At least EUR750 million in annual revenue
- Global minimum tax implementation
- Indonesia, since 2025
- Safe Harbour launch
- January 1, 2026
What people are saying
The future of the tax holiday? For now, it will not be extended. All incentives are basically compatible with the global minimum tax policy except the tax holiday.
What about those who have already received it? They can continue to use it until the tax holiday period ends. However, if the effective tax rate is less than 15%, they still have to pay top-up tax.