Supertax deduction is a tax incentive in the form of income reduction for industries that organize programs in the field of vocational education or carry out research and development activities in accordance with applicable regulations. This incentive aims to encourage investment in strategic sectors, improve the quality of human resources, and spur research and development (R&D). Supertax deduction is regulated in Minister of Finance Regulation Number 128 of 2019 and also Minister of Finance Regulation Number 153 of 2020. This supertax deduction is divided into two types, namely vocational and R&D. Vocational supertax deduction is a tax incentive given to domestic corporate taxpayers who carry out work practices, apprenticeships, or learning. This incentive aims to support the guidance and development of human resources (HR) that focus on certain competencies. In Article 2 of the Minister of Finance Regulation Number 128 of 2019, taxpayers can be given a gross income reduction of a maximum of 200% (two hundred percent) of the total costs incurred. The 200% reduction includes a gross income reduction of 100% of the total costs incurred for work practice, apprenticeship, and learning activities and an additional 100% reduction of the total costs incurred for work practice, apprenticeship, and learning activities. Furthermore, the R&D supertax deduction, this incentive is given to taxpayers who carry out certain research and development activities in Indonesia. This gross income deduction can be given 300% (three hundred percent) of the amount of costs incurred for certain research and development activities in Indonesia that are charged within a certain period of time. This deduction includes 100% for the deduction of gross income incurred for research and development activities and 200% for the deduction of gross of accumulated costs incurred for research and development activities.
The benefit of supertax deduction for companies is tax savings that can help reduce the tax burden that should be paid. Thus, companies can improve their business performance without having to sacrifice cash flow. Other benefits are improving efficiency, increasing productivity, increasing profits, and increasing competitiveness.
By Olina Rizki Arizal – Partner TBrights
TBrights is a tax consultant in Indonesia which is currently an integrated business service in Indonesia that can provide comprehensive tax and business services.
Reference:
- The Regulation Of The Minister of Finance Regulation Number 128 of 2019 concerning the Provision of Gross Income Deduction for the Implementation of Practical Work, Apprenticeship, and or Learning Activities in the Framework of Development and Development of Certain Competency-Based Human Resources
- The Regulation Of The Minister of Finance Regulation Number 153 of 2020 concerning the Provision of Gross Income Deduction for Certain Research and Development Activities in Indonesia
