Legal Updates for October 2016

Government Cuts Income Tax on Real Estate Transfers to REITs to 0.5%

Further to the Government's eleventh economic stimulus package, which was launched on 29 March 2016, a new Government Regulationi was issued on 17 October 2016 to reduce the income tax chargeable on the transfer of real estate to a designated Collective Investment Contract (Kontrak Investasi Kolektif / "KIK") focused on real estate (the Indonesian equivalent of the real estate investment trust / "REIT") to 0.5% final tax from the previous normal income tax rate of 25% for corporate transferors or progressive tax of up to a maximum of 30% for individual transferors.