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Govt exempts meals, housing from benefit-in-kind tax
Various benefits that are usually given by companies aside from monthly salaries, such as vehicles, meals, housing, gifts and health facilities, are subject to income tax based on a new policy.
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Finance Minister Sri Mulyani Indrawati speaks at a G20 Tax Symposium, on July 14, 2022, in Bali. (Finance Ministry/Biro KLI)
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inance Minister Sri Mulyani Indrawati has signed Finance Minister Regulation No. 66/2023, which requires employers to include cash and non-cash (in-kind) benefits (Natura) to employees to determine their individual income tax.
Various benefits that are usually given by companies aside from monthly salaries, such as vehicles, meals, housing, gifts and health facilities, are subject to income tax based on the new policy, with several exceptions. Companies are obliged to count the benefits for the purposes of income tax starting from July 1.
The regulation is designed to provide certainty and fairness regarding employee benefits, according to the Finance Ministry. On top of that, the new rule will also prevent individuals or entities from reducing their tax obligations.
Read also: The role of tax digitalization for economic stability
The Finance Ministry has also exempted several benefits from the taxation, such as uniforms, shuttle transportation and medical facilities, as well as medicines and vaccines related to the COVID-19 pandemic. Company contributions to employees' pension funds are also exempted.
Companies can also still give cash and non-cash facilities that help employees' work, such as laptops, computers, mobile phones and phone credit, without the necessity to include them in the income tax calculation.
Facilities that are given to employees in remote areas, such as housing, medical, education, transportation and sport facilities, are also not affected by this new regulation.
