23 January, 2017
Personal Data Protection Regime Gets Boost with New Regulation
After a wait of more than a year, the Minister of Communications and Information issued Regulation No. 20 of 2016 on the Protection of Personal Data in Electronic Systems ("PDP Regulation") on 1 December 2016. The PDP Regulation, which puts into effect Article 15(3) of Government Regulation No. 82 of 2012 on Electronic Systems and Transactions, sets out the rules governing the protection of personal data that are stored in electronic form.
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Electronic Information & Transactions Law Gets Makeover
The House of Representatives recently enacted a number of important amendments to the Electronic Information and Transactions Law 2008, which has been a source of considerable controversy since it was first placed on the statute books. The amendments address five principal issues: (i) Cyber defamation; (ii) Right to be Forgotten or Right of Erasure; (iii) Admissibility of electronic evidence; (iv) Government supervision; and (v) Investigation of Suspected Offences.
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Constitutional Court OKs Private Sector Role in Electricity Sector Subject to Conditions
On 14 December 2016, the Constitutional Court once again ruled on the constitutionality of the Electricity Law. The Court's ruling came in response to a petition brought by two employees of PT PLN (Persero), the state electricity utility, in their capacities as labor union representatives. This Update provides a summary and analysis of the Court's decision.
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Constitutional Court Legalizes Post-Nuptial Agreements but Upholds Discriminatory Provisions of Agrarian Law
In a landmark decision (the "Decision") handed down by the full bench of nine justices of the Constitutional Court, the Court amended certain provisions of the Marriage Law so as to recognize the validity of post-nuptial agreements for the first time in Indonesia, while simultaneously upholding a number of provisions of the Agrarian Law that abrogate the rights of Indonesian citizens in transnational marriages to hold Hak Milik (the Indonesian equivalent of freehold) and other real property rights that are prohibited to non-Indonesians.
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Government Cuts Income Tax on Real Estate Transfers to REITs to 0.5%
Further to the Government's eleventh economic stimulus package, which was launched on 29 March 2016, a new Government Regulation was issued on 17 October 2016 (the "New Regulation") to reduce the income tax chargeable on the transfer of real estate to a designated Collective Investment Contract (Kontrak Investasi Kolektif / "KIK") focused on real estate (the Indonesian equivalent of the real estate investment trust / "REIT") to 0.5% final tax from the previous normal income tax rate of 25% for corporate transferors or progressive tax of up to a maximum of 30% for individual transferors.
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New Trademark Law Enacted
Law No. 20 of 2016 on Trademarks and Geographical Indications came into effect on 25 November 2016. The key features of the new legislation may be summarized as follows:
Revises the definition of trademarks to incorporate three new non-traditional trademark elements: three-dimensional logos or pictures, sounds and holograms.
Sets out a new definition of "geographical indication" as any information that indicates a product's place of origin and/or how various geographical factors which relate to this place of origin have contributed to the particular characteristics, reputation and quality of the product in question (specifically elements which derive from nature, culture or a combination of both).
Revises a number of provisions which relate to the registration of trademarks, including: 1) All registration applications must now be submitted to the Ministry of Law and Human Rights (instead of to the Directorate General of Intellectual Property Rights) either via the online system or manually; 2) Such applications must include information on the classification of the registered products; 3) Re-examination procedures have now been eliminated from the registration process.
Private Undertakings Permitted to Develop Oil Refineries
Ministry of Energy and Mineral Resources Regulation No. 35 of 2016, which entered into force on 11 November 2016, allows private companies to develop domestic oil refineries. Fuel that is produced by such refineries must be prioritized for domestic needs first. However, it may be sold directly to domestic end users, provided that the private company in question first secures a General Trading License (Izin Usaha Niaga Umum).
New Ministry of Trade Regulation Sets out Rules on Imports of Iron, Steel and Related Products
Ministry of Trade Regulation No. 82/M-DAG/PER/12/2016, which is effective from 1 January 2017 to 31 December 2019, sets out the types of iron, steel, alloy steel and other derivative products thatn can be imported to Indonesia, as listed in the Appendix to the regulation.
Importers of such products are required to secure import approval from the Ministry by submitting an application to the Director General of Foreign Trade.
Land and Building Tax Exemptions for Geothermal Businesses during Exploration Stage
Ministry of Finance Regulation No. 172/PMK.010/2016, which entered into force on 14 November 2016, provides 100% exemptions from Land-and-Building Tax during the exploration stage of geothermal operations for geothermal businesses that they satisfy the following criteria: 1) are in possession of a valid geothermal license that was issued after Law No. 21 of 2014 on Geothermal Activities came into force; 2) have submitted a Taxable Object Notification (Surat Pemeritahuan Objek Pajak/SPOP) and; 3) have enclosed a recommendation from the Ministry of Energy and Mineral Resources confirming that the business is still in the exploration stages.
Such exemptions are valid for five years upon the issuance of a business license and may be extended for two more years, provided that the business in question is still at the exploration stage.
Rules Governing Transportation Management Services Amended
Ministry of Transportation Regulation No. PM 130 of 2016, which entered into force on 18 October 2016, amends Ministry of Transportation Regulation No. PM 74 of 2015 on the Organization and Operation of Transportation-Management Services. The key changes are as follows:
Reduces the minimum authorized-capital requirement for the establishment of transportation-management service companies from IDR 25 billion to IDR 2 million.
Reduces the minimum-investment requirement for the establishment of joint-venture transportation-management service companies through foreign direct investment (FDI) schemes from USD 10 million to USD 4 million.
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann
eng.beng.lee@rajahtann.com
