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An overview by PB Taxand, Taxand Indonesia
Indonesia has recently introduced an Article 21 income tax incentive for employees in specified sectors, including footwear, textiles and apparel, furniture, leather goods, and tourism, subject to qualifying business classifications.
The incentive applies throughout the 2025 tax year for most industries, and from October to December 2025 for tourism, with eligibility capped by employee income thresholds. Employers must pay the tax benefit in cash, comply with strict reporting requirements, and note that refunds or offsets of overpaid tax are generally restricted, particularly outside the tourism sector.
Experts from our Indonesian member firm, PB Taxand, have published a more detailed overview of the incentive, which can be read here.
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