Shipping 2026

INDONESIA Law and Practice Contributed by: Stephen Igor Warokka and Mutiara Kasih Ramadhani, SSEK Law Firm

However, when the proceedings commence outside the jurisdiction of Indonesia, Indonesian law does not provide any remedy or injunction to restrain those court proceedings. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies The income of a ship-owner’s companies in Indonesia may receive an exemption from Article 22 income tax (ie, income tax arising from the export and import of goods) or VAT on the importation of a transportation or fishing vessel, on the condition that the vessel- owner holds a sea transportation company business licence (“SIUPAL”). The SIUPAL has recently been replaced with a sea transportation business stand - ard certificate ( sertifikat standar usaha angkutan laut , or “Standard Certificate”). For more detail, see 10.1 Other Jurisdiction-Specific Shipping and Maritime Issues . Generally, Article 22 income tax is imposed on government-owned and private business entities that carry out export, import and re-import trading activities. Other than that, a VAT exemption may be implement - ed, depending on the services generated by certain national water transportation companies. However, Indonesia provides no optional tonnage tax on the income of a ship-owner’s companies. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration The Indonesian Civil Code recognises the concept of force majeure, with the key provisions found in the following Articles of the Indonesian Civil Code: • Article 1244 obliges compensation for losses unless the obligor proves that non-performance was due to unforeseen events beyond their control, even in the absence of bad faith; and

• Article 1245 waives compensation if obligations cannot be fulfilled due to uncontrollable circum - stances or unforeseen events. In line with these provisions, the ICC also states that a carrier is not liable for delays or the safety of car - riage if it can be proved that these issues arose from circumstances beyond their control which could not reasonably have been prevented or mitigated. The Indonesian Civil Code and the ICC do not provide particular examples of force majeure, and the concept lacks specificity compared to modern international standards. It is therefore common for contracting par - ties to tailor force majeure clauses to suit their specific needs within their contractual arrangements. Indonesian law does not recognise the concept of frustration of contract. However, Article 1254 of the Indonesian Civil Code provides an alternative con - cept, stating that all conditions that are intended to do something that cannot be done, something that is contrary to morality, or something that is prohibited by law are void, rendering agreements conditioned upon them as void. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil Through Presidential Regulation No 29 of 2012, Indo - nesia has ratified Annexes III, IV, V and VI of the Inter - national Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (the “MARPOL Convention”), which includes the “IMO 2020” rule. The IMO 2020 rule is further implemented through: • Directorate General of Sea Transportation Circular Letter No UM.003/93/14/DJPL-18 regarding Limi - tation of Sulphur Content in Fuel and Obligation to Deliver Fuel Consumption on Ships; and • Directorate General of Sea Transportation Circular Letter No 35 of 2019 regarding Obligation to Use Low Sulphur Fuel and Prohibition on Transporting or Carrying Fuel that Does Not Meet the Require - ments and Management of Waste from Exhaust Gas Recirculation from Ships.

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