Indonesia's Directorate General of Taxation (DGT) has published Regulation No. 239/PMK.03/2020, which updates and extends to 31 December 2021 the incentives provided by Regulation No. 28/PMK.03/2020 for medicines, medical equipment, and other related goods and services for combatting COVID-19, and subsequently extended by Regulation No. 143/PMK.03/2020.

The incentives are primarily available for qualified persons, including government agencies, hospitals, and other parties dealing with the COVID-19 pandemic, and include that the import of qualifying goods are VAT exempt and VAT on domestic supplies and utilization of qualifying goods and services is borne by the government. An income tax exemption on import and domestic supplies of qualifying goods is also provided, as well as a withholding tax exemption on income received by qualified persons from the provisions of services and on income received by other domestic services providers for the provision of services to qualified persons.

Regulation No. 239/PMK.03/2020 also extends to 30 June 2021 the additional incentives and relief provided by Regulation No. 29 of 10 June 2020 for COVID-19 and subsequently extended by Regulation No. 143/PMK.03/2020, including:

• The additional deduction for taxpayers engaged in the production of healthcare and medical equipment and supplies;
• The deduction of donations from gross income;

The 0% tax rate for additional income received by individuals such as healthcare workers and support personnel; and

• The 0% tax rate for rental income from the leasing of land, buildings, or other assets

Regulation No. 239/PMK.03/2020 entered into force on 1 January 2021.