THE ANALYSIS OF TAX PLANNING ON ARTICLE 21

INCOME TAX TO MINIMIZE THE AMOUNT OF

INCOME TAX AT PT PRIMA DINA
LESTARI MEDAN

Skripsi by:
Charlotte
160020011
Institut Bisnis IT&B – Accounting
INTRODUCTION
Problem Identification
What is the impact of tax planning of Article 21
Income Tax on amount of income tax at PT Prima
Dina Lestari Medan?
CONCLUSION AND RECOMMENDATION

Conclusion
After implementation tax planning on article 21 income tax, conclusion of this research is that tax
planning on article 21 income tax has impact in minimizing the income tax at PT Prima Dina
Lestari Medan. The amount of article 21 income tax will increase in amount of Rp 6,258,350.00 if
the company implements tax planning of article 21 income tax with gross up method. The amount
of entity income tax will decrease in amount of Rp 11,228,250.00 if the company implements tax
planning of article 21 income tax with gross up method. The difference between amount of article
21 income tax with entity income tax can provide tax saving in amount of Rp 4,969,900.00. The tax
saving can occur because the entity income tax can be reduced in amount of 25% from the amount
of tax allowance. Tax allowance with gross up method can be reduced on net income as deductible
expense. Tax planning with gross up method is conducted with determining the article 21 income
tax borne by the company as taxable object of article 21 income tax in order to use tax rate of entity
income tax in minimizing the income tax payment. The company does not implement tax planning
properly with result that it is necessary to implement tax planning on article 21 income tax. After
conducting the tax planning with gross up method, the company can obtain saving in cash
expenditure. The tax planning with gross up method can make the increasing of the employee’s
gross income with result that it can decrease the company’s profit and it can decrease the payment
of income tax.
CONCLUSION AND RECOMMENDATION

Recommendation
1. The company should implements calculation of article 21 income tax with
gross up method because the benefit from tax allowance paid by the company
can be reduced on the company’s net income as deductible expense and the
employee’s income is withheld with income tax. The payment of article 21
income tax with gross up method is not corrected with fiscal correction. The
company can obtain tax saving with implementing of gross up method. The
article 21 income tax should be included as taxable object of article 21 income
tax in implementation of gross up method.
2. Tax planning on article 21 income tax should be done with considering
applicable income tax provision. The company should consider applicable non
taxable income in calculating article 21 income tax. The calculation of article
21 income tax should be done properly in order that the implementation of tax
planning can give benefit for the company based on income tax provision.
THANK YOU