VAT incentive for domestic flight tickets following the increase in Avtur prices
On 24 April 2026, the Minister of Finance (MoF) issued PMK-241, providing a Value Added Tax (VAT) incentive in the form of 100% VAT borne by the Government on domestic flight services following the increase in Aviation Turbine Fuel (Avtur) prices.
This incentive applies solely to economy class tickets for scheduled domestic flight services and is available for ticket purchases and travel from 25 April 2026 to 23 June 2026.
Under normal circumstances, these tickets are subject to VAT at an effective rate of 11%, in accordance with the provisions stipulated in PMK-1312. The VAT borne by the Government applies only to the base fare and fuel surcharge, and does not apply to other costs borne by the passenger, such as Jasa Raharja compulsory contribution, passenger service charges, extra baggage charges, and seat selection charges.
The incentive under PMK-24 stipulates that the entire 11% VAT amount will be borne by the Government.
Airline companies that utilise this facility are required to:
- Issue VAT invoices stating that 100% of the VAT is borne by the Government; and
- Submit an electronic detailed list of VAT borne by the Government no later than 31 July 2026.
The above VAT invoices and detailed lists must be reported on a cumulative basis in the relevant Monthly VAT Return.
Waiver of administrative sanctions for late filing and payment of the 2025 Corporate Income Tax Return
On 30 April 2026, the Director General of Taxes (DGT) issued KEP-713, which stipulates the waiver of administrative sanctions for late filing and late payment of the 2025 Corporate Income Tax Return.
Under KEP-71, a waiver of administrative sanctions is granted to corporate taxpayers who:
a) Submit the 2025 Corporate Income Tax Return,
b) Make the payment or remittance of Article 29 Income Tax (underpayment) for the 2025 Tax Year, and
c) For taxpayers granted an extension, make the final payment or remittance of Article 29 Income Tax (underpayment) for the 2025 Tax Year,
within one month after the statutory deadline, i.e. no later than 31 May 2026
The waiver of these sanctions is implemented by the DGT not issuing a Tax Collection Letter (Surat Tagihan Pajak/STP). Where an STP has already been issued, the DGT will revoke the administrative sanctions ex officio.
Despite the late submission of the tax return, this will not jeopardise the taxpayer’s existing status or result in the rejection of an application for recognition as a compliant taxpayer (golden taxpayer).
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