Indonesia’s long-awaited Government Regulation No.55 (GR-55) implementing the Income Tax Law amendments introduced under the Harmonization of Tax Regulations (Harmonisasi Peraturan Perpajakan/”HPP”) Law was issued on 20 December 2022. This new regulation applies retroactively from 1 January 2022.
The HPP Law changed the rules on the treatment of benefits-in-kind (“BIKs”) provided by Indonesian employers to their employees.
GR-55 defines “in-kind” as compensation in goods rather than money. A “benefit” is defined as compensation in the form of the right to use a facility or a service which is provided by either the employer or a third party where the asset is rented or paid for by the employer (e.g., accommodation, children’s tuition fees, and insurance).