Provisions for Income Tax Article 25 Installments for Certain Taxpayers

At the end of December last year, the government issued the latest provisions regarding installments
of Income Tax for taxpayers of certain criteria. This regulation comes into force as Tax Year 2019
through PMK 215/PMK.03/2018 (PMK 215/2018). The regulation which is the elucidation of Article
25 paragraph (7) of the Income Tax Law revokes the previous provisions, PMK No.
255/PMK.03/2008 (PMK 255/2008) as amended by PMK No. 208/PMK.03/2009 (PMK 208/2009).
Basically, PMK 215/2018 extends the concept of new taxpayers. The previous regulation only states
that new taxpayers are individuals and entities who earn income from business or self-employment
for the first in the current tax year. Furthermore, this regulation also categorizes taxpayers in
merger, consolidation, spin-off, business acquisition, and/or changes in business entity as new
taxpayers whose amount of income tax article 25 installments ‘deviates’ from regular tax
regulations.
On a side note, the installment of income tax article 25 itself is defined as the monthly average
income tax payable based on the current Annual Tax Return deducted by withheld income tax
articles 21 and 23, withheld income tax article 22, and creditable income tax article 24. However, in
order to achieve arm’s length data of a company's business activities, the government excludes
several types of taxpayers in the normal regime. The types of financial statements and income
categorized as net income are also stipulated in this regulation.
The following is a summary of the amount of installments of article 25 income tax for certain
taxpayers.

NO TYPE OF TAXPAYER CALCULATION OF ARTICLE 25 INCOME TAX

INSTALLMENTS

New and Old Taxpayers

1 Banks as Taxpayers
(Income tax article 17 rate x net income from financial
statement)
Deducted by
(Withholding Tax Article 22 from the beginning of the Tax
Year until the reported Tax Period + income tax article 25
payable from the beginning of the Tax Year until the
reported Tax Period)

2 Other Taxpayers and Listed (Income tax article 17 rate x net income from financial
Taxpayers other than statement)
Banks
Deducted by
(Withholding tax article 22 and 23 from the beginning of the
Tax Year until the reported Tax Period + income tax article
25 payable from the beginning of the Tax Year until the
reported Tax Period)

3 State-Owned Enterprises (Income tax article 17 rate x Budget and Work Plan
and Local-Owned (Rencana Kerja dan Anggaran Pendapatan/RKAP) in the Tax
Enterprises as Taxpayers Year in question validated by General Meeting of
Shareholders (Rapat Umum Pemegang Saham/RUPS) –
NO TYPE OF TAXPAYER CALCULATION OF ARTICLE 25 INCOME TAX
INSTALLMENTS

Deducted by
((Withholding Tax Article 22 dan 23 + PPh Pasal 24 sudah
dibayar atau terutang di luar negeri Tahun Pajak
sebelumnya):12)

4 Certain Individual (0.75% x gross turnover from all places of business other
Taxpayers than the taxpayer’s residence)

5 Taxpayers in spin-off The percentage of transferred assets for each taxpayer

resulting from the spin-off

New Taxpayers

6 Taxpayers in merger, The amount of the taxpayer’s income tax article 25

consolidation, and/or installments prior to the merger, consolidation, and/or
business acquisition in the business acquisition
current Tax Year

7 Taxpayers with changes in The last income tax article 25 installments prior to the
their business entities changes in the business entities

8 New taxpayers other than Nil

criteria 1 – 7