Explanation of the Differences in Tax Policies Between Free Trade Zones and Non-Free Trade Zones
1. Policies within Free Trade Zones
– Exemption from import duties
– Exemption from Value-Added Tax (PPN) and Luxury Goods Sales Tax (PPnBM)
– Faster and simpler customs clearance procedures
– Imported goods must be used for production or re-export
2. Policies outside Free Trade Zones
– Payment of import duties at the applicable rates
– Payment of Value-Added Tax (11%) and Luxury Goods Sales Tax (if applicable)
– More complex customs clearance procedures, requiring additional permits
II. Differences in Export Tax Policies
1. Policies within Free Trade Zones
– Exemption from Value-Added Tax (PPN) on exported goods
– Exemption from export duties (except for certain goods)
– Faster export procedures (benefiting from customs facilitation)
2. Policies outside Free Trade Zones
– Exported goods may be subject to Value-Added Tax (depending on fiscal policies)
– Export duties may apply (especially for raw material goods)
– More complex export procedures, requiring additional declarations
The specific differences are shown in the figure below:
In contrast, in non-Free Trade Zones, companies not only have to bear the full burden of import taxes and fees, but also have to deal with more complicated customs inspections. Therefore, for companies that are interested in investing in Indonesia, operating in Free Trade Zones may be a favorable strategic decision.
The China-Indonesia Twin Parks Batang (KITB) Wanda Industrial Park, which possesses both Free Trade Zone qualifications and Special Economic Zone status, is located in the Batang Industrial City (KITB) of Semarang, Central Java, Indonesia. It offers flexible factory leasing and green intelligent facilities, and helps companies quickly establish a presence in Indonesia through “one-stop” services.
The park is adjacent to highways and ports, and is built on the concept of sustainable development. It provides a comprehensive solution from policy incentives to operational implementation, achieving dual optimization of overseas costs and efficiency.
