Maximize Corporate Tax Savings with Indonesia's Superdeduction Tax Policy
To accelerate industrial modernization and cultivate a high-skilled workforce, the Indonesian government has implemented a premier fiscal incentive: the Superdeduction Tax Policy. Governed under PMK 128/2019 (Vocational Training) and PMK 153/2020 (R&D), this initiative allows qualifying corporate taxpayers to deduct well over 100% of their operational expenditures from their gross taxable income.
Whether your company is advancing domestic research or partnering with local institutions for talent development, this policy offers a powerful framework for reducing tax liabilities while scaling local operations.
1. R&D Superdeduction: Up to 300% Total Tax Write-Off
Companies conducting research and development in Indonesia can claim a total gross income reduction of up to 300% on eligible R&D expenditures:
- 100% Base Deduction: Covers core operational research costs, including researcher salaries, materials, and equipment depreciation.
- Up to 200% Bonus Reduction: Granted incrementally based on specific innovation milestones:
- +50% for securing a domestic patent or Plant Variety Protection (PVP) right.
- +25% if the patent/PVP was co-developed with local universities or research institutes.
- +100% once the developed product reaches the market commercialization stage.
- +25% if the commercialized product was co-developed with local public research bodies.
Priority R&D Sectors
The 300% R&D superdeduction is targeted toward strategic industrial sectors, including:
- Food & Agroindustry
- Pharmaceuticals, Cosmetics, & Medical Devices
- Electronics, Telematics, & ICT
- Transportation Equipment & Automotive Components
- Energy & Clean Technology
- Capital Goods, Basic Metals, & Defense/Security
2. Vocational Training Superdeduction: Up to 200% Total Tax Write-Off
Businesses investing in human capital through work practice, apprenticeship, or internship programs can leverage up to a 200% total gross income reduction:
- 100% Base Deduction: Covers actual direct expenses incurred while running internship, apprenticeship, or teaching programs.
- Up to 100% Bonus Reduction: Awarded when training programs are conducted in partnership with registered local vocational schools (SMK), colleges, or public training centers.
How to Apply via the OSS RBA Portal
Eligible corporate entities can apply for the superdeduction tax incentive directly through Indonesia's official Online Single Submission Risk-Based Approach (OSS RBA) platform:
- Log in to the official portal at oss.go.id.
- Upload the required application documentation, including:
- Valid Fiscal Clearance Letter (Surat Keterangan Fiskal).
- Official Cooperation Agreement (Perjanjian Kerja Sama) for vocational programs.
- Comprehensive R&D Proposal and budget breakdown for research initiatives.
- Submit for notification and verification by the Ministry of Finance and relevant line ministries.
Leverage Tax Incentives for Business Growth
Indonesia's superdeduction tax policy transforms workforce development and domestic research from operational costs into high-return fiscal advantages.
For custom guidance on tax incentive eligibility, partnership structuring, and application filing, contact IIPC Sydney at sydney.bkpm.go.id.