Indonesia Tax: Directorate General of Tax issues circular letter

The Directorate General of Tax issued a circular letter on 1 February 2010 on the deductibility of promotion expenses in connection with the regulation issued by the Minister of Finance in January.

The circular letter provides that, to deduct their promotion expenses from gross income, the taxpayer must demonstrate that the expenses are intended to maintain and/or increase sales, they are reasonable and in line with standard business practices. Under the regulations, taxpayers must attach a list to their corporate income tax return with specific information on the promotional expenses.