Medical Treatment Exempted from Benefit in Kind Tax

Benefit in kind (BIK) is any non-cash benefit of monetary value that employer provides for their employee. Indonesian government have started to tax some BIK which regulated in Government Regulation Number 55 of 2022 and further regulated in Ministry of Finance Regulation Number 66 Year 2023 (PMK 66), one of them is related to medical treatment.

As stated in PMK 66, Indonesian government explains what benefit in kind is taxable and what is exempted from income tax objects, specifically in Appendix A. BIK in the form of health and/or medical treatment are exempt from income tax objects with no limit value.

The catch is that not every medical treatment is exempted, only which is caused by work related accident, ailment from work, life-saving emergencies, and follow-up treatment as a result of work accidents and ailments resulting from work accidents and/or work-related ailments.

The definition for work-related ailments itself is then further described in President Decree Number 7 of 2019. This is intended so that employer does not make too many liberties to classify every medical treatment as work-related so that it is exempted from income tax.

Foreign company who plans to do business in Indonesia must take this new regulation into consideration to determine salaries and benefit in kind offered to their employee.


TBrights is a tax consultant in Indonesia which currently is an integrated business service in Indonesia providing comprehensive tax and business services

By Tommy HO – Managing Partner TBrights


Minister of Finance Regulation Number 66 of 2023


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