Regulation of the Minister of Finance Number 6 of 2026 Exempts Income Tax for MagangHub Internship Participants

Introduction

On 9 February 2026, the Ministry of Finance issued Regulation of the Minister of Finance Number 6 of 2026 on Article 21 Income Tax on Income Received and/or Obtained by University Graduate Internship Participants Borne by the Government for Fiscal Year 2026 (“MoF Regulation 6/2026”). This regulation establishes the legal basis and guidelines for granting a fiscal facility in the form of an exemption from the withholding of Article 21 Income Tax (PPh Article 21) for internship participants.

MoF Regulation 6/2026 supports the implementation of the internship program for university graduates (MagangHub). The Government recognizes the urgency of enhancing human resource competencies, preparing fresh graduates to enter the workforce, and expanding employment opportunities. Through this regulation, the Government provides direct economic stimulus to internship participants to enable them to maximize their income during the training period.

 

Key Provisions

Tax Withholding by Government Agencies

Pursuant to Article 2 paragraph (1) and paragraph (3), Government Agencies acting as Withholding Agents are required to withhold Article 21 Income Tax on income received by internship participants. Article 2 paragraph (2) specifies that such income includes Government Assistance in the form of stipends or similar remuneration, employment social security contributions, and/or any other income under any designation paid by the Government.

Government-Borne Tax Facility (DTP)

Article 3 paragraph (1) stipulates that the Government fully bears the Article 21 Income Tax on the total gross income received by internship participants in connection with the internship program (MagangHub). The Government grants this tax incentive facility for a specified period, effective from the October 2025 Tax Period until the December 2026 Tax Period.

Requirements and Criteria for Internship Participants

Article 5 requires internship participants to fulfill several administrative requirements to utilize this incentive. The primary criteria established by the Government include:

1. Possessing a valid Taxpayer Identification Number (Nomor Pokok Wajib Pajak/NPWP) and/or a National Identity Number (Nomor Induk Kependudukan/NIK) integrated with the administrative system of the Directorate General of Taxes;
2. Being officially registered as a participant in accordance with laws and regulations governing internship program guidelines; and
3. Not receiving any other Government-Borne Article 21 Income Tax (PPh 21 DTP) incentive under different tax regulations.

Mechanism for Cash Payment of Incentives

Article 6 paragraph (1) affirms the obligation of the Withholding Agent to pay the Article 21 Income Tax DTP incentive in cash to internship participants concurrently with the payment of income. Pursuant to Article 6 paragraph (2), the Government does not treat such cash payment of the incentive as additional taxable income. This approach aligns with the simulation in Annex A, which demonstrates that internship participants receive their stipend in full, amounting to one hundred percent.

Obligation to Report Realization

The Withholding Agent bears the administrative obligation to prepare and submit a realization report on the utilization of the incentive electronically through a website integrated with the system of the Directorate General of Taxes, as mandated by Article 7 paragraph (1) and paragraph (5). The relevant agency must comply with the reporting format and completion guidelines stipulated by the Government in Annex B. The Withholding Agent must submit the realization report on a monthly basis no later than the 20th day of the following month for each Tax Period.

Exemption from Annual Income Tax Return Reporting

Article 9 paragraph (1) provides administrative relief by exempting internship participants from the obligation to file an Annual Individual Income Tax Return (SPT Tahunan PPh Orang Pribadi). The Government grants this exemption specifically to taxpayers whose net income within one Tax Year does not exceed the Non-Taxable Income threshold (Penghasilan Tidak Kena Pajak/PTKP). Pursuant to Article 9 paragraph (3), if an internship participant elects to file an Annual Tax Return and the filing indicates an Overpayment status solely resulting from the crediting of Article 21 Income Tax DTP withholding slips from this internship program, the Government deems that no tax overpayment exists.

 

Transitional Provisions

Article 7 paragraph (3) regulates the reporting of realization for the October 2025 to December 2025 Tax Periods, allowing the Withholding Agent to submit the report for such period no later than 20 February 2026. Pursuant to Article 7 paragraph (6), if the Withholding Agent fails to prepare and submit the realization report within the stipulated deadline, the Directorate General of Taxes is authorized to recover the full amount of the Article 21 Income Tax DTP incentive directly from the Withholding Agent.

 

Closing

MoF Regulation 6/2026 grants the Article 21 Income Tax DTP facility for MagangHub participants for the period from October 2025 to December 2026. This policy ensures that eligible participants receive their stipend in full, amounting to one hundred percent. In addition to the exemption from Annual Tax Return filing for participants whose income falls below the PTKP threshold, the effective implementation of this facility depends on the compliance of Government Agencies acting as Withholding Agents in submitting timely monthly realization reports to prevent the recovery of the incentive amount by the Directorate General of Taxes.