The Indonesian government is reviewing its fiscal incentive design, including the tax holiday facility, in response to the implementation of the global minimum tax (GMT), which requires a minimum effective tax rate of 15% for multinational enterprise (MNE) groups with consolidated gross turnover of at least EUR750 million. Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono, stated that GMT could reduce the effectiveness of profit-based incentives such as tax holidays, since tax savings obtained by companies through such facilities could still be collected as top-up tax by other jurisdictions. Indonesia has committed to implementing the Pillar 2 GloBE Rules, with technical provisions on GMT regulated under PMK 136/2024. However, the government has not decided to discontinue the tax holiday facility and will continue to study the most appropriate incentive scheme under the new global tax regime. Beyond fiscal incentives, the government also emphasized the importance of expanding market access through international trade cooperation as an instrument to boost investment competitiveness, especially amid global trade tensions. The government identified four key strategies to strengthen the downstream industry ecosystem and high-value-added industries: strengthening investment, offering competitive incentives, improving domestic supply chains, and expanding market access.
Manpower
Minister of Manpower Regulation Number 13 of 2026 was enacted on 16 September 2026 and promulgated on 21 September 2026 as an official guideline for the distribution of government assistance within the Ministry of Manpower for Fiscal Year 2027. This regulation was drafted to provide legal certainty, procedures, and clear mechanisms for the management and distribution of government assistance funds to beneficiaries under the responsibility of the Ministry of Manpower. The drafting process of this regulation went through a harmonization stage together with the Ministry of Law, Ministry of Finance, and Ministry of National Development Planning/Bappenas, held on 31 August 2026. The harmonization results stated that the draft regulation had completed the harmonization process and was not in conflict with higher or equal-level laws and regulations, allowing it to proceed to the stipulation and promulgation stage. After the harmonization process was completed, the Secretary General of the Ministry of Manpower submitted a request for promulgation to the Director General of Legislation of the Ministry of Law, in accordance with Article 81 of Law Number 12 of 2011 concerning the Formation of Laws and Regulations, which requires every regulation, including Ministerial Regulations, to be promulgated in the State Gazette of the Republic of Indonesia. This regulation serves as a technical reference for work units within the Ministry of Manpower in planning, distributing, and accounting for government assistance to communities, business actors, or manpower-related institutions in fiscal year 2027, ensuring accountability and effectiveness in the use of state funds.
General Tax Provisions
Minister of Finance Decree Number 40/MK/EF.2/2026 establishes monthly interest rates used as the basis for calculating administrative sanctions in the form of interest as well as providing interest compensation for the period from 1 September 2026 to 30 September 2026. This determination implements the mandate from the Minister of Finance to the Director of Economic Stabilization Strategy based on Minister of Finance Decree Number 488/KMK.010/2021 as amended by KMK Number 51 of 2026. Interest rates are tiered according to the type of article in the General Provisions and Tax Procedures Law (UU KUP) that serves as the basis for the sanction. For administrative sanctions, rates range from 0.60% (Article 19 paragraphs (1), (2), and (3)) up to 2.27% per month (Article 13 paragraph (3b)), with intermediate rates of 1.02% for Article 8 paragraphs (2), (2a), Article 9 paragraphs (2a), (2b), and Article 14 paragraph (3); 1.43% for Article 8 paragraph (5); and 1.85% for Article 13 paragraphs (2) and (2a). For interest compensation provided to taxpayers, the rate is set at 0.60% per month, applicable to Article 11 paragraph (3), Article 17B paragraphs (3) and (4), and Article 27B paragraph (4) of the KUP Law. This decree takes effect from 1 September 2026 and serves as the reference for the Directorate General of Taxes in calculating the amount of interest sanctions or interest compensation to be paid or received by taxpayers during that period.
VAT
Minister of Finance Decree Number 37/MK/EF.2/2026 establishes the Foreign Exchange Rates (Nilai Kurs) as the basis for settlement of Import Duty, Value Added Tax on Goods and Services and Luxury Goods Sales Tax, Export Duty, and Income Tax applicable for the period of 12 August 2026 to 18 August 2026. This decree is part of the routine weekly mechanism of the Ministry of Finance to convert transaction values denominated in foreign currencies into Rupiah for the purposes of calculating customs and tax obligations. This decree lists exchange rates for 25 foreign currencies, including the US Dollar (USD) at Rp17,960.00, Euro (EUR) at Rp20,716.89, British Pound Sterling (GBP) at Rp24,172.99, Japanese Yen (JPY per 100) at Rp11,382.99, as well as other currencies such as Australian Dollar, Canadian Dollar, Danish Krone, Hong Kong Dollar, Malaysian Ringgit, New Zealand Dollar, Norwegian Krone, Singapore Dollar, Swedish Krona, Swiss Franc, Myanmar Kyat, Indian Rupee, Kuwaiti Dinar, Pakistani Rupee, Philippine Peso, Saudi Arabian Riyal, Sri Lankan Rupee, Thai Baht, Brunei Dollar, Chinese Renminbi, and Korean Won. For foreign currencies not listed, the decree stipulates that the applicable exchange rate is the daily spot rate of the relevant foreign currency in the international market against the US Dollar as of the previous business day's closing, multiplied by the Rupiah-to-USD exchange rate as established in this decree. This decree took effect from 12 August 2026 to 18 August 2026, and represents a continuation of the routine weekly exchange rate policy regularly issued by the Ministry of Finance based on various tax and customs legal foundations in force.
Income Tax
DDTC Academy held an exclusive seminar titled 'Corporate Income Tax Return Preparation Strategy 2026' on September 22, 2026 at Menara DDTC. The event featured two DDTC Consulting professionals, Erika and Bobby Aldi Anggara, who discussed various important aspects of preparing Annual Corporate Income Tax Returns. The material covered included identification of taxable and non-taxable income, treatment of deductible and non-deductible expenses, the concept of 3M costs (to earn, collect, and maintain income), and fiscal reconciliation to adjust commercial profit into taxable income. Participants were also equipped with understanding of tax credits, fiscal loss compensation, and administrative aspects of submitting Annual Corporate Income Tax Returns in the coretax era in accordance with PER-11/PJ/2025. The seminar emphasized the importance of balancing substance and administrative aspects in corporate tax reporting. DDTC Academy also announced it will hold a follow-up seminar titled 'Transfer Pricing Aspects in the Fast-Moving Consumer Goods (FMCG) Industry' on September 30, 2026, and offers personalised training programs for companies requiring tax training tailored to specific needs.
Manpower
Minister of Manpower Decree Number 254 of 2026 establishes the Indonesian National Work Competency Standards (SKKNI) for the Processing Industry Category, specifically the Main Group of Coal and Petroleum Refining Products Industry, focusing on the Petroleum Blending and Its Products and Derivatives sector. This decree was enacted on September 14, 2026, as part of the government's effort to develop workforce competency standards in the oil and gas processing industry sector, particularly in petroleum blending processes. This SKKNI serves as an official reference for businesses, vocational education and training institutions, and professional certification bodies in designing curricula, training programs, and competency certification schemes for workers engaged in petroleum blending. The establishment of this standard is crucial to ensure the quality and competency of human resources in the petroleum processing industry, given the complexity and high risks inherent in petroleum processing and blending operations. With this SKKNI in place, it is expected that national standardization of work competencies will occur, enhancing the competitiveness of Indonesian workers in the petroleum processing industry sector, both domestically and internationally. Additionally, this decree serves as the foundation for competency recognition through nationally recognized certification. This decree is effective from the date of enactment and forms part of the labor regulatory framework governing competency standards across various strategic industry sectors in Indonesia, particularly the energy and petroleum processing sector which plays a vital role in the national economy.
Manpower
Other Institution Regulation Number 9 of 2026 governs the implementation of Social Security for Indonesian Migrant Workers (PMI), stipulated on August 24, 2026 and promulgated on August 28, 2026. This regulation is part of the government's efforts to provide comprehensive social protection to Indonesian Migrant Workers working abroad, considering the vulnerability of this group to various social and economic risks during their work placement period. In general, this regulation confirms the obligation of social security participation for PMI as one of the administrative requirements in the process of overseas work placement. The social security program in question covers protection against work accident risks, death, old age, and other risks that PMI may face during pre-placement, placement, and post-placement periods. This regulation also governs the registration mechanism, contribution payment, benefit claim procedures, and the parties responsible for organizing the social security program for PMI, whether from the government, social security providers, placement agencies, or PMI themselves. This aims to ensure that PMI's rights to social protection can be fulfilled optimally. With the issuance of this regulation, it is expected to increase legal certainty and protection for PMI and their families, while strengthening the governance system of placement and protection of Indonesian Migrant Workers as mandated by higher regulations in the field of employment and migrant worker protection.
Customs and Excise
Regulation of the Director General of Customs and Excise Number PER-1/BC/2026 governs the mechanism for excise refunds for damaged or unused excise stamps. This regulation was issued on April 16, 2026, and came into effect on the same date. This regulation provides legal certainty for excisable goods entrepreneurs in cases where excise stamps are damaged or unused during the production or distribution process. The excise refund mechanism aims to protect entrepreneurs' rights and ensure that no losses occur due to damage or non-use of excise stamps for which excise has already been paid. The regulation covers procedures for submitting refund applications, verification by customs and excise officers, and administrative mechanisms for excise refund settlement. This regulation is part of the government's efforts to improve services and business certainty in the taxation sector, particularly excise.
