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Indonesia: Guidance on tax treatment of joint operations

Guidance on VAT, luxury goods sales tax, corporate income tax, and withholding tax treatment of joint operations 

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December 13, 2024

The Finance Minister on October 28, 2024, issued Regulation No. 79 of 2024 (PMK 79) outlining the tax treatment of joint operations.

The regulation categorizes joint operations into two groups based on their tax obligations: (1) joint operations that require a taxpayer identification number (NPWP) and value added tax (VAT) registration (PKP), and (2) joint operations that do not require an NPWP and PKP.

The regulation provides guidance on the following topics:

  • Criteria for and administrative requirements of joint operations with an NPWP and PKP
  • Summary of VAT, luxury goods sales tax, corporate income tax, and withholding tax treatment of joint operations with an NPWP and PKP
  • Taxation of joint operations without an NPWP or PKP
  • Income tax treatment of joint operations involved in land and building transfers
  • Transitional provisions

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

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