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Indonesia: Guidance on deductibility of uncollectible accounts

Deduction allowed under direct or indirect method

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December 2, 2024

The Finance Minister on October 18, 2024, issued Regulation No. 74 Year 2024 (PMK 74) providing guidance on the deductibility of uncollectible accounts for corporate income tax purposes.

The guidance provides that deductions may be allowed under two approaches:

  • The account is deducted when it becomes uncollectible (the direct method)
  • The deduction is taken through an allowance or provision (the indirect method)

Read a November 2024 report prepared by the KPMG member firm in Indonesia

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