On June 27, 2023 the Government issued MoF Regulation No. 66 Year 2023 concerning Income Tax Treatment of Benefits-in-Kind Obtained from Employment or Service Activities.
This regulation came as implementing Government Regulation No. 55 Year2022.
Key points that need to be known regarding this regulation:
- Benefits In Kind (“BIK”) are now taxable, and the related expenses are tax deductible as long as they are incurred to obtain, collect, and/or maintain income.
- However, there are certain BIK that are exempted from income tax:
- Foods and drinks provided for all employees.
- BIK provided in Certain Areas (remote areas).
- BIK that are required by law to be provided to employees to carry out theirwork
- BIK sourced/funded by the State and/or Local Government Budgets
- Certain types and/or limits of BIK.
This MoF Regulation is effective starting July 1, 2023.
SS – 2023 – PMK 66 Tahun 2023