TEMPO.CO, Jakarta - Indonesia's House of Representatives has ratified the Indonesia International Financial Center Bill (PFII Bill) today, Tuesday, July 21, 2026. The regulation outlines zero-percent income tax (PPh) incentives for up to 50 years.
This is confirmed by the deputy chair of DPR's Commission XI, who is also the head of the PFII Bill Working Committee, Mohamad Hekal. "The 50-year provision is outlined in the law, and the implementation will be detailed later under a Finance Minister Regulation," he said after the parliament meeting, adding that the target recipients for the incentive will also be explained in due time.
Besides the income tax incentive, the PFII Law also regulated other tax reliefs, such as Value Added Tax (VAT) and Luxury Goods Sales Tax (PPnBM). Hekal maintained that further explanation about the implementation, numbers, and eligibility of the incentives will be included in derivative regulations.
Despite the possibility of a 100 percent tax break, Hekal ensured that the incentives will not violate the Global Minimum Tax (GMT) provisions. The GMT is a global agreement of G20 countries, which stipulates that large multinational companies must pay a minimum of 15 percent tax on profits, wherever they operate.
Under the GMT regime, if a large multinational company pays tax below the minimum 15 percent in a country, the untaxed gap will still be collected by another country. Therefore, the amount of tax paid by the company will not drop.
According to Hekal, Indonesia is committed to adhering to the agreement. "Because even if they are not taxed here, they will be taxed in their own country anyway," said Hekal.
Read: Indonesian Parliament Passes Bill on Global Financial Center
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