The government, via the Ministry of Finance, recently issued Ministry of Finance Regulation No. 66 of 2023 (“Regulation“). The Regulation governs the income tax treatment of reimbursement or compensation in connection with employment or services that are given in-kind and/or in the form of enjoyment (typically referred to as “in-kind”) (“benefits-in-kind“).
The Regulation is an implementing regulation on the tax treatment of benefits-in-kind as mandated by the Income Tax Law and Government Regulation 55 of 2022. It details the types of benefits-in-kind, situations when employers can consider benefit-in-kind as deductible expenses, situations when employees can exempt benefit-in-kind from taxable income, and how benefits-in-kind are valued and taxed.
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