Since 2018, the 0.5% Final Income Tax rate has been the go-to option for MSMEs because of its simplicity: multiply monthly turnover by 0.5%, pay, done. But the rules just changed significantly. Through Government Regulation Number 20 of 2026 (GR 20/2026) — a revision of GR 55/2022 — effective April 22, 2026, the government has narrowed who qualifies while giving long-term certainty to those who still do.
What stays the same
- The rate remains 0.5% of gross turnover, final in nature.
- The turnover ceiling stays at Rp4.8 billion per tax year.
- The first Rp500 million of an individual's turnover remains tax-free — Article 60(2) of GR 55/2022 is unchanged.
What changed: only three groups qualify
This is the biggest shift. Under Article 57 of GR 20/2026, the Final Income Tax facility may now only be used by:
- Individual taxpayers — now with no time limit, since Article 59 of GR 55/2022 (which previously capped the usage period) has been removed.
- Single-shareholder limited liability companies (PT Perorangan) — also indefinitely.
- Cooperatives — capped at four years from registration.
This means partnerships (CV), general partnerships (Firma), ordinary limited companies (PT), and village-owned enterprises (BUMDes) no longer qualify. Businesses in those forms get a transition period to use up any remaining eligibility, then must move to the standard corporate income tax rate.
Independent professional services are excluded — including digital creators
GR 20/2026 reaffirms that income from independent professional services cannot use this scheme. The list is long: lawyers, doctors, accountants, consultants, notaries, architects, appraisers, actuaries, musicians, singers, artists, models, athletes, teachers, trainers, moderators, researchers, translators, advertising agents, insurance agents, and multi-level marketing distributors.
Notably, the new regulation explicitly adds digital creator professions — influencers, content creators, and vloggers — to the independent-professional category. Income from these activities is now taxed at the standard rate, not the 0.5% facility.
The loophole that's now closed: business splitting
For years, the tax office monitored two evasion patterns: "bunching" (delaying revenue recognition to stay under Rp4.8 billion) and "firm splitting" (breaking one large business into many small entities). GR 20/2026 closes this gap in two ways:
- The Rp4.8 billion turnover ceiling is now calculated from the combined turnover of an individual plus all single-shareholder companies they've established.
- For married couples with separate property agreements or who file taxes separately, the ceiling is calculated from the combined turnover of both spouses plus all single-shareholder companies either of them owns.
If the combined total exceeds Rp4.8 billion, the entire group loses eligibility for the 0.5% rate in subsequent tax years.
Summary: where you stand under the new rule
| BUSINESS FORM | STATUS UNDER GR 20/2026 |
|---|---|
| Individual (business, not independent professional) | Eligible, no time limit, turnover ≤ Rp4.8B |
| Single-shareholder PT (one founder) | Eligible, no time limit, combined turnover ≤ Rp4.8B |
| Cooperative | Eligible, max 4 years from registration |
| CV / Partnership / PT / Village enterprise | No longer eligible — transition period, then standard rate |
| Independent professionals & digital creators | Excluded — taxed at standard rate |
What you should do now
- Map your status. Check your business form, income source, and remaining facility period against the table above.
- Calculate your consolidated turnover. If you have multiple single-shareholder companies, or your spouse also runs a business under separate property, add up all turnover together.
- Prepare for full bookkeeping if you're among those transitioning to the standard rate — calculating income tax at the standard rate requires a proper profit-and-loss statement, not just a turnover log.
- Comply in good faith. Taxpayers who comply from the outset minimize the risk of tax return corrections, recalculation at standard rates, and future disputes.
Disclaimer: This article was prepared as general information as of July 2, 2026 and does not constitute tax advice for any specific case. Tax regulations are subject to change. For guidance on your specific business situation, please consult the Sentary Consulting team or a registered tax consultant.