Tax Holiday Ends Amid GMT: Coretax and SPP-TDLN Strengthen Indonesia's Tax Base

The Ministry of Investment and Downstreaming/BKPM confirmed that the provision of tax holidays for general investors is currently suspended in line with the dynamics of the Global Minimum Tax (GMT) implementation in Indonesia. The validity period of this tax exemption facility officially ended on December 31, 2025, based on prevailing regulations. The government originally intended to continue the incentive to maintain investment attractiveness, but the implementation of GMT, which requires a minimum corporate income tax of 15%, has become an obstacle to extending the tax holiday scheme.

Minister of Investment/Head of BKPM has met with the Minister of Finance to formulate a new sweetener policy for investors. The government is currently reviewing several alternatives that do not violate GMT provisions, including energy subsidies and Qualified Refundable Tax Credits (QRTC). Meanwhile, a number of tax incentives remain available in Special Economic Zones (SEZs/KEK) as well as Free Trade and Free Port Zones (KPBB) in accordance with applicable regulations.

In line with the government's efforts to design investment incentives that comply with Global Minimum Tax provisions, authorities are continuously strengthening tax administration to expand the tax base and increase state revenue.

The Directorate General of Taxes (DJP) noted that the implementation of the core tax administration system (Coretax) has expanded the tax data held by the institution. The Director General of Taxes stated that the rollout of Coretax could add approximately two million entities to the tax base.

This expansion of the tax base also supports the growth of gross tax revenue, which reached nearly 12% up to July 2026. According to the DJP, this growth was recorded across all major tax types and was not solely influenced by temporary factors, but also by increased compliance and the broadening of the tax base. The increasingly comprehensive scope of tax data through Coretax also allows the DJP to conduct more rigorous supervision and testing of taxpayers. Going forward, this condition is expected to ensure that tax revenue relies not only on economic growth but also on improved compliance and the integration of new economic activities into the tax system.

Parallel to the tax base expansion through Coretax, the government is extending the reach of tax collection on cross-border digital economic activities. The government will begin implementing the Tax Collection System for Foreign Digital Transactions (SPP-TDLN) on September 10, 2026. This policy is based on Presidential Regulation Number 68 of 2025 and is further regulated through Minister of Finance Regulation Number 49 of 2026. According to the Director General of Taxes, the implementation of SPP-TDLN is part of the effort to broaden the tax base derived from digital economic activities conducted by Indonesians through business actors and platforms operating from abroad.

In its implementation, PT JPN has been appointed as the operator of SPP-TDLN. Meanwhile, issuers carrying out the VAT collection function must go through an onboarding and system testing (sandboxing) process to ensure technological readiness, security, system integration, and compliance with applicable regulations. The DJP noted that tax revenue from the digital trade sector currently ranges from Rp8 trillion to Rp12 trillion and is optimistic that the implementation of SPP-TDLN can nearly double the tax base. This expansion of tax collection is a strategic component of the government's effort to widen the tax net in tandem with the rapid growth of digital economic activities in Indonesia.

The combination of investment incentive adjustments, Coretax automation, and the taxation of foreign digital transactions has direct implications for legal certainty and corporate operational efficiency. Global business actors and investors are urged to immediately align their tax planning with the GMT regime and seize incentive opportunities in special areas such as SEZs. Conversely, increasingly strict data transparency compels all taxpayers and foreign digital service providers to elevate their administrative compliance to avoid tax penalties.

This series of policies demonstrates the government's dual focus on balancing investment attractiveness with the fortification of the tax base and revenue. On one hand, the government is designing alternative investment incentives that align with Global Minimum Tax mandates; on the other, administrative enhancements through Coretax and the implementation of SPP-TDLN are directed at capturing a broader tax base, including from cross-border digital commerce. Moving forward, policy consistency and the readiness of tax administration will be crucial to ensure that efforts to strengthen state revenue run parallel with maintaining a competitive investment climate and fostering the digital economy.