The Head of State has finally released a list of in-kind facilities or compensation provided by the office, which are exempt from income tax (PPh), meaning no tax is collected. The rules regarding in-kind facilities are contained in Government Regulation (PP) Number 55 of 2022, concerning Adjustments to Arrangements in the Field of Income Tax, which was signed on December 20, 2022.

 

According to Article 24 PP No. 55 of 2022 "Exempted from Income Tax objects for reimbursement or compensation in connection with work or services received or obtained in kind and/or enjoyment as intended."

 

There are five types of in kind that are exempt from income tax in PP No. 55 of 2022. Among them:

• Food, groceries, beverage or beverage ingredients for all employees, including food provided by the employer at work, food stamps for mobile workers, and food ingredients for all employees with a certain value limit.
• Natura provided in certain areas, includes housing facilities for workers and their families, health services, education, worship, transportation and certain sports. However, this exemption from PPh in kind only applies to certain areas, namely areas that have economic potential but have inadequate economic infrastructure and are difficult to reach by public transportation.
• Natura that must be provided by the employer in the context of worker security, health and safety, includes uniforms, equipment for work safety, employee shuttle facilities, crew accommodation and equipment for handling endemic, pandemic or national disasters.
• Natura sourced or financed from the APBN, APBD or village budget. Just like the previous rule, everything that comes from state funds is not subject to tax.
• Natura with certain types and/or limitations, including gifts or hampers in the context of holidays or worship facilities at work locations that are used by all employees, included in certain types and/or limitations categories that are exempt from PPh.