TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Govt exempts meals, housing from benefi t-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.
Change Size
F
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.
In the new Natura tax policy, the government does not set a maximum limit for meal costs that are provided by companies on their premises. However, if employees are given vouchers to have meals outside the premises or are allowed to reimburse their meal costs, they will be subject to tax if they are worth more than Rp 2 million (US$133) or more expensive than meals provided on the premises.
The government will not impose tax on communal housing facilities. However, non-communal living places, such as houses and apartments will only be exempted if the monthly rent is not more than Rp 2 million per month.
Read also: Finding the right carbon tax rate in Indonesia
Gifts will also be subject to taxation if their accumulated value is more than Rp 3 million per year. However, gifts that are given during the religious holidays of Idul Fitri, Christmas, Nyepi (the Hindu Day of Silence) and Waisak and Chinese New Year, are exempt.
Other Natura facilities that are exempt from tax are vehicles that are given to non-shareholder employees with a gross salary not more than Rp 100 million per month, as well as sports facilities with a maximum value of Rp 1.5 million per year, aside from golf, horseracing, power boating, paragliding and automotive racing.
