The Minister of Finance has issued amendments to Ministerial Regulation No 60/PMK.04/2005 to provide legal certainty in the taxation regime for the Bonded Zones of Batam, Bintan, and Karimun. The amendments will increase legal certainty and entails that imports and services, including sub contracts, that were previously not taxed remain taxed under the provisions of Regulation No 89/PMK.04/2005.

Article 2(5) has been amended to remove the tax on the service component of the sub contract. Article 3(2) stipulates that goods from one Bonded Zone to another Bonded Zone will not be charged Income Tax and Added Value Tax on Luxury Goods. Article 3(5) stipulates that goods and products in the frame of sub contract from one entrepreneur to another entrepreneur outside the Bonded Zone or to other custom area are not subject to Import Duty, Customs Duty and Tax in the frame of Import. Article 3(9) concerning the tax on reparation and reconditioning services has been repealed.

This regulation has been on force since 1 October 2005. (YKD)