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As another deregulation package is published by President Joko Widodo on

the 22nd of October 2015 (making this the 5th instalment to the ongoing economic
reforms), new and enticing incentives are making their appearance. In this package,
new tax incentives that will directly affect assets of companies have been published
in the form of decreased taxes on asset revaluations. The Ministry of Finance
Bambang PS Brodjonegoro has issued Regulation of the Minister of Finance (PMK)
No. 191 / PMK.010 / 2015 on Revaluation of Fixed Assets for the purpose of taxation
for the Application Proposed in 2015 and 2016.
Revaluation of asset is a feasible way of increasing the worth of the assets of
a company, yet often times companies in Indonesia opt out of doing so due to the
heavy taxation that can occur due to this action. In practice, a company who wishes
to conduct a revaluation of their assets must obtain first a valid revaluation from a
public or expert appraiser. After obtaining such projected value, they must then pay
the income tax of said land, after said payment; their asset can then be declared as
revaluated with the new price, whether higher or lower.
As Article 1 of PMK No. 191/2015 states, that companies or individuals who
conduct a revaluation of their asset before 31st of December 2015 will be levied by
an income tax of 3% (three percent), while those who conduct a revaluation before
1 January 2016 will be levied by an income tax of 4% (four percent) and companies
who conduct a revaluation of asset from 1 July 2016 until 31 December 2016 will be
levied with an income tax of only 6% (six percent).
The value of said asset as the result of the revaluation referred to in PMK No.
191/2015 is the value of fixed assets set by the office of the public appraiser or
expert appraiser who obtain a license from the government. The public appraiser or
expert appraiser previously mentioned must be an appraiser who has obtained their
license no later than 31 December 2016 for applications made since the enactment
of PMK No. 191/2015.
The discount of income tax does not apply to companies who have obtained a
revaluation of a fixed asset from an office of public appraiser or expert appraiser

that has obtained a valid license from the government and but pays their income
tax in 2017.
This new regulation could be counted as a win-win solution for both the
companies who conduct revaluation and also the government. The companies who
conduct revaluation will find a sudden surge of increase in the value of their assets,
all the while having to pay a minimum amount of income tax for the revaluation,
while the government will benefit greatly from the regulation, as companies who in
previous years have opted out of revaluation due to heavy tax levies will choose to
conduct revaluation, providing new income sources or in fact strengthening the
previous income source of the government via taxes on asset revaluation.

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