After much anticipation, Indonesia’s Minister of Finance has issued implementing regulations related to benefits-in-kind (“BIK”) in its regulation No. 66 Year 2023 (“PMK-66”) dated 27 June 2023.1 This became effective on 1 July 2023.
PMK-66 provides comprehensive guidelines on the tax treatment of BIK for employers and employees, encompassing aspects such as the deductibility of BIK expenses, the definition and scope of BIK as a taxable object, exclusion criteria for specific BIK categories, valuation and calculation methods for BIK, special considerations for certain areas, and transitional provisions.
PMK-66 also revokes PMK No. 167/PMK.03/2018 (“PMK-167/2018”),2 which previously governed the provision of food and drinks for all employees as well as reimbursement or compensation in-kind and facilities in specific areas and related to the work performance, all of which can be deducted from an employer’s gross income for its corporate tax payable computation.
This GMS Flash Alert briefly highlights some of the key aspects of PMK-66. For the full article, see "Implementing Regulation for Benefits-in-Kind” in TaxNewsFlash (August 2023), a publication of the KPMG International member firm in Indonesia.