REGULATION OF THE MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA NUMBER 114 OF 2025 ON THE TAX TREATMENT OF AID OR DONATIONS, INCLUDING ZAKAT OR MANDATORY RELIGIOUS CONTRIBUTIONS, AS WELL AS GRANTED ASSETS FOR INCOME TAX PURPOSES

This regulation is enacted to provide legal certainty and administrative ease regarding zakat or mandatory religious contributions, as well as donations and/or costs for the development of social infrastructure, which are deductible from gross income for the donor and excluded from income tax objects for the recipient.

The following are the main provisions of Minister of Finance Regulation Number 114 of 2025:

1. Income Tax Treatment for the Donor
2. Granted assets, aid, or donations may not be deducted from gross income in determining the amount of Taxable Income for the donor taxpayer, except for:
3. Donations for national disaster relief, research and development, educational facilities, and sports development, as well as costs for the development of social infrastructure, which in one year are limited to not exceeding 5% of the fiscal net income of the previous Tax Year, subject to the following conditions:
4. The taxpayer has fiscal net income based on the Annual Income Tax Return for the previous Tax Year;
5. The donation and/or costs provided do not result in a fiscal loss in the Tax Year in which the donation and/or costs are given;
6. The donation and/or costs are supported by valid evidence; and
7. The institution receiving the donation and/or costs has a Taxpayer Identification Number (NPWP), except for entities that are excluded as income tax subjects as stipulated under the Income Tax Law.

• Zakat paid to zakat collecting bodies (badan amil zakat) or zakat institutions established or authorized by the government, or mandatory religious contributions for adherents of religions other than Islam recognized in Indonesia that are paid to religious institutions established or authorized by the government, subject to the following conditions:
• The payment of zakat or mandatory religious contributions does not result in a fiscal loss in the Tax Year in which the zakat or religious contributions are paid;
• The payment is supported by valid proof of payment; and
• The payment is received by a zakat collecting body, zakat institution, or religious institution that has a Taxpayer Identification Number (NPWP).
• Gains arising from the transfer of assets in the form of grants, aid, or donations constitute Income Tax objects for the donor.

1. Income Tax Treatment for the Recipient
   1. Aid or Donations and Granted Assets Excluded from Income Tax Objects:
2. donations and/or costs for the development of social infrastructure;
3. zakat, infaq, and alms received by zakat collecting bodies or zakat institutions established or authorized by the government and received by eligible zakat recipients; or
4. mandatory religious contributions for adherents of religions recognized in Indonesia, received by religious institutions established or authorized by the government and received by eligible contribution recipients.

are excluded from Income Tax objects for the recipient, provided that there is no relationship related to business, employment, ownership, or control between the parties concerned.

• The obligation to prepare proof of receipt for donations and/or costs for the development of social infrastructure by the institution receiving the donation, which shall at a minimum contain:
• the number and date of the proof of receipt of the donation and/or costs for the development of social infrastructure;
• the Taxpayer Identification Number (NPWP) or National Identification Number and the full name of the donor of the donation and/or costs for the development of social infrastructure;
• the type of donation and/or costs for the development of social infrastructure;
• the form of the donation and/or costs for the development of social infrastructure;
• the value of the donation and/or costs for the development of social infrastructure;
• the NPWP and name of the institution receiving the donation and/or costs for the development of social infrastructure; and
• the signature of the representative of the institution receiving the donation and/or costs for the development of social infrastructure.

• The obligation to prepare proof of receipt for zakat or mandatory religious contributions by the body or institution receiving the zakat or contribution, which shall at a minimum contain:
• the number and date of the proof of payment of zakat or mandatory religious contributions;
• the Taxpayer Identification Number (NPWP) or National Identification Number of the payer and the full name of the payer of zakat or mandatory religious contributions;
• the amount of zakat or mandatory religious contributions paid;
• the name and Taxpayer Identification Number (NPWP) of the body or institution receiving the zakat or mandatory religious contributions; and
• the signature of the officer of the body or institution receiving the zakat or mandatory religious contributions or payment validation.

Minister of Finance Regulation Number 114 of 2025 was enacted on 30 December 2025 and comes into force as of 31 December 2025 upon promulgation.

For Tax Service assistance, please contact:

            Rani Widianti

            T. (+6221) 2222-0200

            E. rani.widianti@shinewing.id

            Alvina Oktavia

            T. (+6221) 2222-0200

            E. alvina.oktavia@shinewing.id