TTM 6 - Income Tax Provisions

Income tax
ENDAH MIRASANTY,
SH,SE.,Ak.,M.Ak.,CA.,BKP
Subjective Tax
namely taxes that

consider the personal
circumstances of
the Taxpayer as the
main factor in tax
imposition.
Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Direct Tax
taxes
imposed on people
who have to bear
and pay them.

Legal basis:
Law no. 7 of 1984 concerning Income Tax came into effect on January
1, 1984. The last (fourth) amendment with Law no. 36 of 2008.
Then it was refined with two other laws, namely the Job Creation Law and
the HTR Law (Harmonization of Tax Regulations).
The Income Tax Law regulates tax imposition materials which

basically regulate Tax Subjects, Tax Objects, Tax Imposition Basis
and Tax Rates.
4
5
TAX SUBJECT Distinction
TAX SUBJECT Suject Domestic Subject Overseas

Taxpayer resides/resides in
Indonesia Taxpayer resides/resides in Indonesia
Individual < 183 days within 12 months &
> 183 days in a 12 month period;
in a year the taxes are in
Corporate (entity) Indo and intend to live in Indo
Agency that is NOT established /
Agency established / domiciled in
Permanent Biusiness Entity domiciled in Indonesia
Indonesia
Inheritance that has not been
divided as a unit, replaces the
rightful
-- Article 2 paragraph (3) of the Income Tax
Law (latest amended by the HTR Law)
Subject to Income Tax Got it
Income
Through
Not through
-- Article 2 paragraph (4) of the Income Tax Law (latest amended by Permanent
HTR Act) Entity Entity

6
Differences in Tax Subjects Domestic -

Overseas
Taxpayer Domestic Taxpayer Overseas
No.
1. Subject to tax on income received or obtained Taxable only on income originating from sources of
from Indonesia or from outside Indonesia income in Indonesia.
(world wide income)
2. Taxable Income is calculated from Taxable Income is calculated from

Net Income\ Gross income
Income subject to tax is gross income at
3. Income subject to tax is net income at equivalent rates, unless the Taxpayer Overseas conducts
business through a permanent establishment in
general rates
Indonesia where the Permanent Business Entity
has the same tax obligations as the Taxpayer
Overseas.
4. Obligation to submit SPT Not required to submit SPT because the tax
obligation is fulfilled through final tax
withholding.

7
When the tax subject begins and ends

Individuals or Entities who earn income not
Private Person through PE in Indonesia
Start End Start End
a. At birth a. When you die When earning from When you are
no longer
b. When in Indonesia for more than b. When leaving Indonesia earning from
183 days in one year or have Indonesia forever Indonesia
the intention to settle or reside in
Indonesia
Individuals or Entities who earn

Corp income through PE in
orate Indonesia
Start End Start End
When established or domiciled in When dissolved / no longer When When the time is no
Indonesia domiciled in Indonesia starting to run a longer running a
business or carry business or
Inheritance has not been divided out activities through a doing activities
Start End PE in Indonesia through
Permanent Business
When the Heir dies by leaving When the inheritance has been
Entity in Indonesia
an inheritance (when the distriPermanent Business Entityed
inheritance arises) to the heirs

8
INCOME TYPE
(Under the INCOME TAX ACT)
Income Tax object income that is Article 4 Paragraph (1)

not final
Final Income Tax object Article 4 Paragraph (2)

income
Income that is not a Article 4 Paragraph (3)

Income Tax object

9
income which is the object of income tax
Income Type Information

Income from work such as: salary, honorarium, allowances, bonuses, Generally, Article 21 Income Tax is deducted by the employer. Must be reported and
incentives, gratuities, commissions, pensions recalculated the amount of Income Tax in the Annual SPT
Prizes from Sweepstakes or jobs or activities, and awards Generally, Article 21 Income Tax is deducted by the employer. Must be
reported and recalculated the amount of Income Tax in the Annual SPT
Operating profit Can be obtained through the results of bookkeeping and recording. Must
be reported and calculated the amount of Income Tax in the Annual
SPT
Rewards in other forms Reported and calculated the Income Tax in the Annual
SPT
Profits from the sale of property, for example the sale of jewelry,
Reported and calculated the Income Tax in the Annual
vehicles, etc SPT
Royalties, gains from debt relief, gains on foreign exchange
Reported and calculated the Income Tax in the Annual
SPT
Additional net wealth derived from income that has not been subject to
income tax Reported and calculated the Income Tax in the Annual
SPT
Interest, dividends, rent, insurance premiums , etc Reported and calculated the Income Tax in the Annual
SPT
10
final taxable income
DEPOSIT,
SAVINGS,
BOND
PRESENT
INCOME DRAW LOT
CERTAIN
OTHER
FINA
L
DIFFERENCE
TRANSACTION
TREASURE, SERVICE
IN STOCK
CONSTRUCTION,
EXCHANGE
RENTAL T/B
Article 4 paragraph 2

"NO" 11
Non Object & non

subject
Office
Representative
NO subject
Foreign
Is • Individuals who do not

carry out freelance
work/business activities
Individual that employ domestic
Organization
workers or have no
Dues
compensation
International business relationship
Insurance object Pension,
Scholarship
Non Subject
Natura/ Zakat/
Does not deduct Income Tax
enjoyment religious
charity Article 21
Non Object
Types of Income that are not deducted by Article 21 Income Tax

12
Not Final, Final, & Not an Object
DETERMINE THE TYPE OF INCOME FROM THE FOLLOWING DESCRIPTION :
Not Finals
Salary IDR 100,000,000,-
Allowance IDR 20,000,000,- Not Finals
Commission IDR 10,000,000,- Not Finals
Income from Insurance Claims IDR 15,000,000,- Not Object
Income from renting out houses IDR 20,000,000,- Finals
Revenue from renting a car for the bride and groom IDR 10.000.000,- Not Final
Income from deposit interest IDR 10,000,000,- Finals
Received an inheritance from parents in the form of a house of IDR 400,000,000, - Not an object
Received a birthday gift from a friend IDR 2.000.000,- Not Final
Get donations from the company he works IDR 12,000,000,- Not Finals
13
Not Final, Final, & Not an Object
Severance pay from the company that is paid at once is IDR 400,000,000,- Finals
A year's gross income for free work IDR 1,500,000,000,- Not Finals
Profit income from CV Indah of IDR 7,000,000,- Not Object
Teaching income at Trisakti University is IDR 40.000.000,- Not Final
Income from selling houses in Sunter for IDR 1.500.000.000,- Final
Sales $ 5,000, buy 1 U $ IDR 7,500 and sold for 1 U$ IDR 9,000,- Not Final
Prizes in the form of bicycles for buying a car in cash IDR 250.000,- Not Final
Get income from Malaysia of IDR 30,000,000,- Not Final
Interest on the bonds that were established in 2007 amounted to IDR 25.000.000,- Finals
The royalty for the book he wrote is IDR 25.000.000,- Not Finals

14
COSTS THAT MAY & SHOULD NOT BE DEDUCTED FROM INCOME
What may be deducted : What is not deductible: Based on

under Law no. 36 of 2008 Article 6 paragraph (1) Law no. 36 of 2008 Article 9 paragraph (1)
1. Distribution of profits by name and in any form. Expenses

1. Costs that are directly or indirectly related to business 2. charged or incurred for the personal benefit of shareholders,
activities. depreciation partners or members.
2. of expenditures to acquire tangible assets and amortization of
expenditures to obtain rights and other costs that have a useful life Formation or cultivation of reserve funds.
of more than 1 (one) year as referred to in Article 11 and Article 3.4. Premiums for health insurance, accident insurance, life
11A (paragraph (1) letter b) Contributions to pension funds that its insurance, endowment insurance, and scholarship insurance, are
establishment has been authorized by paid by individual taxpayers.
5. Reimbursement or compensation in connection with work or
3. the Minister of Finance (Article 6 paragraph (1) letter c) loss services provided in kind and enjoyment.
due to sale or transfer of assets owned and used in the
6. The amount that exceeds the fairness paid to shareholders or to
4. company or owned to obtain, collect and maintain income (Article parties who have a special relationship.
6 paragraph (1) letter d) loss difference in foreign exchange rates;
(Article 6 paragraph (1) letter e) research and development costs 7. Donated assets, assistance or donations, and inheritance.
for companies
5. conducted in Indonesia (Article 6 paragraph (1) letter f) 8. VAT fee.
9. Expenses charged or incurred for the personal benefit of the
6. scholarship, apprenticeship and training costs (Article 6 taxpayer or those who are his dependents.
paragraph (1) letter g) real receivables real non-
7. billable provided that the donation requirements have been met 10. Salary paid to members of a partnership, firm, or limited liability
in company whose capital is not divided into shares.
8. the context of national disaster relief.
11. Administrative sanctions in the form of interest, fines, and
9. increases as well as criminal sanctions in the form of fines
relating to the implementation of legislation in the field of taxation.

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(Non-taxable income)
Dependents in
Non taxable
income
blood marriage
Straight 1o Straight 1o
Sideways 1o Sideways 1o
Father Siblings Parents in law

Brother-in-law
Step child
Mother Older brother Brother-in-law
Biological children Younger brother Younger brother-in-law
Adopted children
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Non-taxable income
Individual Income Income Non taxable

Taxpayer: Taxable Net income
(PMK 101/PMK.10/2016)
Information A YEAR A MONTH
For Employee Self (TK/0) 54,000,000 4,500,000
For employees who are married (K/0) 58,500,000 4,875,000
For Employees Who Are Married & Have 1 Dependent 63,000,000 5,250,000
(K/1)
For Employees Who Are Married & Have 2 dependents 67,500,000 5,625,000
(K/2)
For Employees Who Are Married & Have 3 Dependents 72,000,000 6,000,000
(K/3)

17
Sample case
CASE 1 CASE 2
Nadia is a wife who has a
Sofia is an unmarried woman,
husband with minimal/
and has a younger sibling,
unclear income.
Therefore , she had to as well as a biological father and
support her husband mother who are no longer
and two children. working.
What is Nadia's Non-taxable
What is Nadia's Non-taxable income status?
income status?
Kindergarten/2
Kindergarten/0

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Example Problem 2:
Mr. Hendra, an electronic trading business, has a wife and family dependents as
follows:
No. Name Date. Born Family Relations Information
1 Lenny 14/11/1953 Wife Housewife

2 Anton 23/06/1978 biological child Student
3 Andrew 14/09/1980 biological child Student
4 Ana -------
02/11/1999 biological child
5 Lina 08/01/1979 Anton's wife PT. ABC employees
6 Linda Retired civil servants
07/11/1934 Mother-in-law
7 House housekeeper
26/05/1983 ------
Non-taxable income
Mr. Hendra?

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Answers to Question 2:
Mr. Hendra, an electronic trading business, has a wife and family

dependents as follows:
No. Name Date. Born Family Relations Information
1 Lenny 14/11/1953 Wife Housewife
2 Anton 23/06/1978 biological child Student
3 Andrew 14/09/1980 biological child Student
4 Ana 02/11/1999 biological child -------
5 Lina 08/01/1979 Anton's wife PT. ABC employees

6 Linda 07/11/1934 Mother-in-law Retired civil servants
7 House 26/05/1983 ------- housekeeper
Non-taxable income Mr.

Hendra? K/2

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WHEN IS A ACCORDING TO CONDITIONS
PERSON'S TAXPAYER IN
Non-taxable THE BEGINNING OF THE YEAR
income TAX
DETERMIN
ED?
UNDERAGE
CHILDREN JOIN
HAVE INCOME, WITH PEOPLE
OLD
HOW?

22
COMBINED INCOME
HUSBAND AND WIFE
The wife receives

status in
income from 1 (one) K/…
husband
employer
There is a Separation agreement

Wealth or wife Choose Status
K/I/…
Separately carry out PH/MT
their tax obligations
Husband and wife are Carry out their

divorced by court respective
Kindergarten / …
decision tax
obligations

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VAT RATES
(Article 17 Income Tax Law)
IN THE INCOME TAX ACT
AMENDMENT to the HTR Law (ENACT 2022)
Layer of Taxable Income Tax Rates Layer of Taxable Income Tax Rates
up to IDR 50,000,000.00 (fifty million rupiah) 5% up to IDR 60,000,000.00 (fifty million rupiah) 5%
(five percent) (five percent)
above IDR 50,000,000.00 (fifty million rupiah) up to IDR 250,000,000.00 15% above IDR 60,000,000.00 (fifty million rupiah) up to IDR 250,000,000.00 15%
(two hundred and fifty million rupiah) (ten percent) (two hundred and fifty million rupiah) (ten percent)
above IDR 250,000,000.00 (two hundred and fifty million rupiah) up to IDR 25% above IDR 250,000,000.00 (two hundred and fifty million rupiah) up to IDR 25%
500,000,000.00 (five hundred million rupiah) (fifteen percent) 500,000,000.00 (five hundred million rupiah) (fifteen percent)
30% above IDR 500,000,000.00 (five hundred million rupiah) up to IDR 30%
above IDR 500,000,000.00 (five hundred million rupiah)
(thirty five percent) 5,000,000,000.00 (five billion rupiah) (thirty percent)
Above IDR 5,000,000,000 (five billion rupiah) 35% (thirty five

percent)

24
TAX CREDITS
Withholding Income Tax Article 21 from work, services or

activities
Withholding Income Tax Article 22 on business income
Withholding Income Tax Article 23 on income from capital
Income Tax Article 24 crediting (net income for foreign countries)
Payment of Article 25 Income Tax Installments

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How to Pay Taxes

26
INCOME TAX
PERSONAL PERSON
1. Max. Turnover 4.8 billion a year, and max. 7 years

income tax
Clerk / Final Income since 2018 or since becoming a taxpayer (PP No.
Person employee Tax MSMEs
23/2018)
Personal 0.5% 2. Gross income up to 500 million a year,

NOT SUBJECT TO Income Tax (Article 7 paragraph (2a) of the HTR
Law
1. Organizing records and has

Businessman / submit a Notice of Use NPN
Worker NPN 2.Max. Turnover of 4.8 billion a year 3.
Norms according to PER 17/PJ/2015
Free
1. Mandatory for individual taxpayers with a turnover of

over 4.8 billion a year
Bookkeeping
2. Tax is levied on Fiscal Net Profit

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CALCULATION STRUCTURE
INDIVIDUAL PERSON (EMPLOYEE) INCOME TAX
Income such as:

salary, Less deductions, such
Social Security Agency,
Gross income as: office fees, retire net income
Retire conrtibution, contribution, etc
bonuses etc
Income Tax Credit

Tax which Certificate of withholding tax VAT payable Income Less Non-
Still Must 1721-A1/A2 Taxable taxable
Paid income

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Income Tax PERSONAL
PERSON
--Entrepreneur/ Free Worker (NPPN)
Income
such as: business Times big net income
Gross income
sales proceeds or Norm
service revenue
Income Tax Credit Less Non-

Tax which Income
Certificate of withholding tax VAT payable taxable
Still Must 1721-VI Taxable
income
Paid

29
PERSONAL PERSON VAT
-- Income Recipients that are Passive Income
Income such net income

Gross income
as: interest, Equals (=)
royalties,
property rent
Income Tax Credit Less Non-

Tax which Income taxable
Certificate of withholding tax
VAT payable
Still Must Income Tax 23 Taxable income
Paid

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Income Tax PERSONAL
PERSON
--Employee/ Free Worker (Bookkeeping)
Income such as:

business sales minus Commercial Profit Fiscal Correction
proceeds or service Cost
revenue
ACCOUNTING SECTION
Less Non- minus

Compensation Affected Income
VAT payable taxable
Loss Tax
income
Tax Credit Current

Income Tax 21, Income Tax
22, 23, 24 and 25 Must pay

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FISCAL RECONCILIATION SCHEME
REGULATION
PSAK
TAXATION
REPORT REPORT
RECONCILIATION
FINANCE FINANCE
THE FISCAL
COMMERCIAL FISCAL
income tax
DIFFERENT DIFFERENT
STILL TIME DEBT
TAX
DEFENDER
CURR
ENT TAX

32
FISCAL RECONCILIATION
CORRECT INCOME /
PROFIT
FISCAL
POSITIVE
COST COST
CORRECT
FISCAL
INCOME /
NEGATIVE
PROFIT

33
In 2019, Mr. Andy provided assistance in the form of groceries in the

amount of IDR 50,000,000 to flood victims around their place
of business.
This disaster does not include national disasters.
Is it necessary to do a fiscal correction?
Answer:
NEED
POSITIVE FISCAL
CORRECTION

34
In 2019, Mr. Pramana recorded a commercial depreciation expense of IDR

150,000,000. However, based on tax regulations, the depreciation expense should
have been IDR 175,000,000.
Does it need to be corrected fiscally?
Answer:
NEED
FISCAL CORRECTION
NEGATIVE

35
In 2019, Mr. Oka is recorded as having a warehouse rental income of IDR 120,000,000
to PT ABC, and has received proof of Final Income Tax withholding
Ps. 4 (2) IDR 12,000,000.
Is it necessary to make a fiscal correction of this transaction?

If yes, what type of fiscal correction?
Answer:
NECESSARY
FISCAL
CORRECTION, IE
FISCAL
CORRECTION
NEGATIVE Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP
36
In 2019, Mrs. Dita was recorded as having received a profit share from CV ABC
of IDR 25,000,000.
Is it necessary to do a fiscal correction on this?

If yes, what type of fiscal correction?
Answer:
FISCAL CORRECTION NEEDS TO BE MADE, ie FISCAL CORRECTION

NEGATIVE

37
HOW DOES IT RELATE TO THE TYPE OF ANNUAL

SPT ???
38
Form Types
Individual SPT Income Tax
1. Annual SPT Form 1770 SS
Annual SPT 1770 SS is used by taxpayers who have income from only one
employer or company.
Annual SPT 1770 SS is used by individual taxpayers who have a total gross
income of not more than IDR 60 million in a year.
How to report Annual SPT with form 1770 SS:
• At the end of the year or at the beginning of the new year, employees must ask for proof
of withholding 1721-A1 for private employees and proof of withholding 1721-A2 for
civil servants so that it is easier to fill out the 1770 SS form.
Because the proof of deduction already stated the employee's gross income for one
year
• In filling it out, the taxpayer only needs to transfer the existing data in the 1721- A1
and 1721-A2 withholding slips into the 1770 SS Annual SPT form. As well as filling
out a list of assets and obligations or debts until the end of the year without requiring
details.

39
2. The 1770 S Annual Tax Return Form is intended for:
• Individual taxpayers who receive income, either from one giver

work or more
•Total gross income is equal to or greater than IDR 60 million per year • Obtain other
domestic income, which comes from interest, royalties, leasing activities, or
profits from the sale or transfer of other assets
• Have income that is subject to Final Income Tax, and/or is final in nature, such as deposit
interest, SBI, and others.
How to report Annual SPT using form 1770 S:

• This Annual SPT form is used for employees whose gross income is equal to or greater
than IDR 60 million per year
• Employees who fill out the 1770 S form are also required to request proof cut
either 1721-A1 or 1721-A2
• Obtain income that is not taxable, such as grants or inheritance, assistance or

donations, health insurance claims, scholarships, and others
• Taxpayers who use form 1770 S in submitting their Annual SPT are required to fill in
the attachments, such as other domestic net income data and income attachments
subject to final or final income tax, including a list of assets and/or obligations, as well
as family members.

40
3. Annual SPT Form 1770 •

Those who earn income from their own businesses, such as shop, salon, stalls, and
other
• Those who earn income from independent work, such as doctors, notaries, artists, insurance
officers, and others •
Those who earn income from one or more employers • Have
income that is subject to Final Income Tax and/or are final in nature • Have
other domestic income, such as interest, royalties, rent or profits
from the sale and/or transfer of other assets
• Obtaining income abroad.
So, an example of a personal taxpayer using the 1770 Annual SPT is an employee with other income
as an entrepreneur or non-employee like the freelancer above.
How to report the Annual SPT with form 1770:

• In submitting the 1770 Annual SPT, you are required to include proof of other income outside of
work, A1 or A2 withholding slips, balance sheet and income statement (bookkeeping), monthly
recapitulation of gross circulation and expenses (norms), as well as sheets calculation of income tax
payable (for separate and separate electing tax status).
• Taxpayers must also fill out all the attachments available on form 1770. The amount is more than
the 1770 SPT Annual.
• If the 1770 S form only has two attachments, the 1770 form has four attachments. Namely, an
attachment to domestic income from a business or freelance job that keeps bookkeeping or record
keeping, an attachment to a list of withholding income tax by other parties, an attachment to income
subject to final or final tax, and an attachment to a list of assets, debts and family members.

41
Mrs. Mimi is a permanent employee at a company engaged in tax

consulting services, and receives income only from the
company where she works.
Answer:
ANNUAL SPT OP
1770 SS or 1770 S

42
Pak Dadang works for a furniture company as an administrative staff

with a salary of IDR 4,000,000 per month.
Answer:
ANNUAL SPT OP
1770 SS

43
Mr. Agung is a permanent employee at a company engaged in tax

consulting services, and receives other income in the form of
tax consulting services outside the company where he works
Answer:
ANNUAL SPT OP
1770

44
Pak Bayu owns a service business engaged in the field of

expeditions, and has kept books of his business
Answer:
ANNUAL SPT OP
1770

45
Pak Jaya is a permanent employee with the position of tax

advisor at 3 (three) large companies in Bali, and his wife
works at a well-known private bank in Bali. They
agreed to choose to run their taxes separately (MT)
Answer:
ANNUAL SPT OP
1770 S

46
Exercise
Agung (K/0) is a registered tax consultant in Bali.

In 2021, he only keeps records of his turnover, which is IDR
150,000,000.- (BP: IDR 3,750,000.-)
Apart from that, he also works for a company and receives a salary of IDR
120,000,000 (BP 1721-A1: IDR 3,325,000)
Question:
1. What should Agung do in order to use
NPN?
2. How much personal income tax is owed?

47
CORPORATE Income Tax
Do Which cover:
Business/ • Limited Liability Companies

No • Limited Liability Companies (CV)
• Other Companies
• State and Local Business Entity
• Firms
• Partnerships
a bunch • Cooperatives
• Retired Funds
• Associations
• Foundations
• ORSOSPOL
Person &/ is a unit • Mass/Other
Capital • Organizations
• Institutions
• Other Forms
• Including (collective
investment contracts
Article 2 paragraph (1) b

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Income Tax CONCEPT •Land/building rental •Interest
Taxpayer Passive Income

tab/deposit •Penj. Shares
on the stock exchange • Interest/
AGENCY discount on Bonds • Lottery Prizes
Income Tax income tax
subject
Finals
Special Rate X Pengh Gross
TIN Specific business:
•Transfer of land/building rights
Income Tax Business
Income •Construction services
object
General business other than above: Rate:
Income from businesses with turnover 0.5% turnover/month
INCOME 4.8M (PP 23 -optional)
Business distribution xxx

Income Tax is not Article 6
No Cost of goods sold Gross (xxx)
final profit xxx
Income Tax vs
Turnover > 4.8 B Business costs (xxx)
object Article 9
or Operating profit xxx
Other Income/(Expenses). Commercial xxx
Turnover 4.8M
Net Profit xxx Tariff Article Subject to Tariff Article
(optional)
Positive Fiscal Correction
17 paragraph (1) part b of HTR Law
Negative Fiscal Correction Netto Fiscal xxx
No. 7 of 2021 which is 22 %
Income Loss Compensation (xxx)
Taxable (PKP) xxx Tariff Article 31E – Turnover 50B :
Tariff of (xxx)
•4.8M/Omzet X PKP = Pengh I multiplied by the rate
Income Tax Income Tax xxx
25% X 50%
Payable Income Tax Tax %
•Tax erterprise - multiplied income by 22% rate
Credit KB/N/LB xxx
(xxx)
xxx

49
TAX SUBJECT
DOMESTIC
Article 2 paragraph (3)
its formation based on the provisions

of laws and regulations;
funding comes from

Corporate Revenue and Expenditure Budget
State or Regional Revenue and
ESTABLISHED OR Expenditure Budget;
LOCATED
STATUS IN the revenue is included in the Central
Government budget or
INDONESIA, Local government; And
except for
certain units of
the bookkeeping is checked by the state
government functional supervisory apparatus
agencies that meet
the following criteria:
50
TAX SUBJECT
OVERSEAS
ENTITIES THAT ARE NOT ESTABLISHED AND DO NOT HAVE A PLACE

POSITION IN INDONESIA
THAT RUNNING WHO RECEIVES OR OBTAINS

BUSINESS OR ACTIVITY INCOME FROM INDONESIA IS NOT
THROUGH FROM RUNNING A BUSINESS OR
Permanent Business ACTIVITIES THROUGH Permanent
Entity IN INDONESIA Business Entity IN INDONESIA

51
PERMANENT ESTABLISHMENT OF BUSINESS

THAT FORM OF BUSINESS

USED BY
AS AGENCY
Overseas
TAX SUBJECT
TO RUN BUSINESS OR ACTIVITIES

IN INDONESIA
TAX IMPOSITION IS EQUAL TO Taxpayer Domestic

and Corporate WITH INNER MODIFICATION
PROFIT DETERMINATION AND ADDITIONAL
RATES
ARTICLE 26 ARTICLE 4

52
Illustration of Tax Subject Identification
Tax regulations distinguish Domestic Tax Subjects (Taxpayer Domestic), Foreign Tax Subjects
(Taxpayer Overseas), and non-tax subjects. The following is information on the identity of
individuals and entities. What is the tax status for the 2017 tax year?
N Place Information status

Name o Stay /
position
1. Budi Lives and works in the city of birth. Personal

Palembang
2. Berries Macassar Since April 1, 2017 moved to New York, Not Subject
planning to settle down and work in the city. Tax
3. Berna Medan Be in Indonesia between 2 February 2017 – 11 Individual Domestic

November 2017. Taxpayer
4, Bambang Bandung Worked for 1 month and plans to settle down. Individual Domestic
Taxpayer
5. Ben Washington Shareholder of a company operating in Indonesia. Individual Overseas

Taxpayer
6 Hari Jakarta The 10-year-old child writer earns from book Individual Domestic
Taxpayer
royalties
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PHYSICAL PROPERTY OR ASSETS: Permanent Business Entity
a. management domicile; AGENT:
b. Branch company; n. a person or Corporate acting
c. representative office; as an agent whose position is not
d. office building; independent,
e. factory;
f. workshop;
Permanent Business
g. Warehouse;
Entity INSURANCE:
h. Space for promotion and sales
i. mining & quarrying of natural resources, o. Agents or employees of
insurance companies that
j. oil and gas drilling working area are not established and
k. fishery, animal husbandry, agriculture, plantation, or domiciled in Indonesia who
Permanent receive insurance premiums
forestry;
Business or incur risks in Indonesia.
Permanent Business Entity PROJECTS: Entity
l. construction project, installation, or assembly
project;
Permanent Business Entity E-
COMMERCE:
Permanent Business Entity SERVICES:
p. computers, electronic
agents, or automated
m. provision of services in any form by employees or
equipment owned, rented, or
other people, as long as they are carried out for more
used by electronic transaction
than 60 days within a 12 month period;
operators to carry out business
activities via the internet.
54
Permanent Business Entity Tax Object

Article 5 Paragraph (1)
- Permanent Business Entity
business/activities.
Income from: - Property owned/controlled by
Permanent Business Entity.
- Business or activity.
head office income from: -Sales of goods.
-Providing services.
Done in Indonesia and similar to what

Permanent Business Entity does.
Income as referred to in Article 26, As long as there is an effective relationship

which is received or earned by the between PE and assets/
head office: activities that generate income.

55
Determination of Permanent Establishment Profit
Head office administration fees that may be charged are costs related to Permanent Business Entity
businesses or activities, based on the amount determined by the Director General of Taxes.
Payments to the head office that may not be charged as expenses include:
• Royalties/ rewards in connection with the use of assets, patents and other rights.
• Fees related to management services and other services.
• Interest, except interest related to banking business.
Payments from the head office that are not as Permanent Business Entity income include:
• Royalties/rewards in connection with the use of assets, patents and other rights.
• Fees related to management services and other services.
• Interest, except for interest related to banking business.

56
Illustration (Permanent
Business Entity Tax Object)
Arctic Co. established and domiciled abroad, and has a permanent establishment in
Indonesia. Arctic Co. And the Permanent Business Entity conducts bus chassis sales activities
in Indonesia. During 2012, Arctic Co.'s in-house sales IDR 3,500,000,000.00, Permanent
Business Entity sales of IDR 8,250,000,000.00. Arctic Co. Also made a bus engine sales
transaction worth IDR 1,525,000,000.00. The Permanent Business Entity does not provide
this product. What is the value of the income tax object on Permanent Business Entity owned
by ArcticCo.?
Answer:
The tax object for Permanent Business Entity includes income by Permanent Business
Entity itself and head office income from business activities that are similar to Permanent
Business Entity activities.
Income tax object = 3,500,000,000 + 8,250,000,000 = IDR
11,750,000,000.00
57
Difference between Taxpayer

Domestic & Taxpayer Overseas
No. Description Tax subject (WP) Foreign Tax Subject.
Domestic
1. Scope of Income Covers Worldwide Earnings. Only Income from Indonesia.
2. Obligation to have NPWP Must have NPWP. Not required to have NPWP.
There is an obligation to submit both

3. Obligation to submit SPT There is no SPT obligation.
Periodic SPT and Annual SPT.
4. Income subject to tax Taxable Income for WP Gross income.
a. Subject to Tariffs Article 17 paragraph (1) part b

of HTR Law No. 7 Year 2021 . namely: - Subject to Special Tariff Article 26.
5.Rates. Single tariff of 22% which has Or in accordance with the Tariff according to
been b. VAT rates apply. Final (Article 4 P3B (Tax-Treaty).
paragraph 2.)
Represents installments of income tax
payable at the end of the year. except for the
Is a final payment unless the status
6. Current Year Tax Payments.
Finals changes.
8. Objection and Appeal Have that right. Does not have that right
9. Bookkeeping Required to organize. There is no such obligation.

58
RESIDENCE/
TAXPAYER STATUS
Article 2
paragraph (6)
PLACE
STATUS
Corporate
DEFINED BY THE DIRECTOR GENERAL

TAX
ACCORDING TO THE CIRCUMSTANCES
WHICH ARE ACTUALLY

59
Final Tax Implementing Regulations
Income from the sale of shares on the stock exchange.

PP No. 14 of 1997
Income from interest on deposits and savings and SBI discounts.
PP No. 131 of 2000
Income from lottery prizes. PP No. 132 of 2000
Income from land and/or building rental. PP No. 5 of 2002
Income from the transfer of land and/or building rights.

PP No. 71 of 2008
Income in the form of interest/discounts on bonds sold on the stock exchange.

PP No. 16 in 2009
Income from construction services business. PP No. 40 of 2009
Income from SMEs. PP No. 23 of 2018

60
Government Regulation 23 of 2018 – Final SME Tax

• Government Regulation (PP) Number 23 of 2018, Income Tax on Income from Business Received or Earned
by Taxpayers with Certain Gross Turnover replaces Government Regulation (PP) Number 46 of 2013.
• Certain gross turnover is income from BUSINESS received or earned
Taxpayers with gross turnover (turnover) that does not exceed IDR 4.8 billion in 1 tax year. Gross
circulation (turnover) is the total gross circulation (turnover) of all outlets/ counters/ outlets or the
like, both the head office and its branches.
• Tax payable and must be paid is Final tax
• Effective from 1 July 2018

• Differences in conditions
• Imposition of final tax rate changed from 1% to 0.5% • Improvement of
other provisions • Imposition of
0.5% final is optional

61
Loss Compensation
Losses can be compensated with income starting from the next

tax year, up to 5 consecutive years.
For investment in certain business fields or in certain areas,

compensation for losses can be given for up to 10
years.

62
Illustration 2.6 (1) - (Compensation for Losses)
PT. Melati is a company that was founded in 2011. At the beginning of its operation, it faced
ups and downs in business. The following is the tax profit and loss since it was first established.
Year 2011 IDR 1,750,000,000.00

Make a loss
2012 Make a loss IDR 825,000,000.00

2013 Profit IDR 215,000,000.00
2014 IDR 65,000,000.00
Make a loss
2015 Profit IDR 765,000,000.00

2016
Loss IDR 12,500,000.00
If the company earns a profit of IDR 1,975,000,000.00 in the year 2017, what is the taxable income
of PT. Jasmine in 2017?

63
Illustration 2.6 (2) - (Compensation for Losses)
Answer :
Compensation for losses in 2013 = 215,000,000.00 (derived from 2012 fiscal losses) Compensation
for losses in 2015 = 765,000,000.00 (derived from 2012 fiscal losses) Compensation for losses in
2017 = Loss fiscal 2012 + Loss fiscal 2014 + Loss fiscal 2016 =
825,000,000 + 65,000,000 + 12,500,000
= IDR 902,500,000.00
The 2006 fiscal loss that has not been compensated for, which is IDR 770,000,000.00
(1,750,000,000 - 215,000,000 - 765,000,000), cannot be compensated for in 2017, because it has passed
the five-year time limit.
Taxable Income in 2017 = 1,975,000,000-902,500,000
= IDR 1,072,500,000.00

64
Depreciation, Amortization and Revaluation
According to the Income Tax Law, depreciation or depreciation is the concept of allocating the acquisition
price of tangible fixed assets, and amortization is the concept of allocating the acquisition price of intangible
fixed assets and the acquisition price of natural resource assets. So, in the Income Tax Law the notion of
amortization includes the notion of depletion as it is known in the world of financial accounting.
Tangible fixed assets in taxation are grouped into:

1. Tangible assets not in the form of buildings
2. Tangible assets in the form of buildings
Buildings are grouped into:

1. Permanent: useful life of 20 years.
2. Not permanent, temporary in nature, made of materials that are not old, can be moved,
useful life of not more than 10 years.

65
Depreciation Rates
Treasure Group The useful life Depreciation Rates

Tangible
Straight line Declining Balance
I. Not Buildings
Group 1 4 years 25% 50%
Group 2 8 years 12.5% 25%
Group 3 16 years 6.25% 12.5%
II. Permanent Building

20 years 5% -
Not permanent 10 years 10% -

66
Amortization Rate
The Invincible Assets Group The useful life Amortization Rate

Tangible
Straight line Declining Balance

Group 2 8 years 12.5% 25%
Group 3 16 years 6.25% 12.5%

67
Revaluation (Revaluation of fixed assets)
1. Due to differences in book value and the real value of assets.

2. Those who can do this are domestic corporate taxpayers and have completed all tax
obligations.
3. For tangible fixed assets (land, buildings and non-buildings).
4. Calculations are based on market value or fair value
5. The excess of the revaluation of fixed assets after compensating for the
current year's losses (if any) is subject to final income tax of 10%.

68
VAT RATES
(Article 17 Income Tax Law)

69
Anton works as a tax consultant without a tax and has a tax consulting office called
CV Tax Consulting. In 2019, the company has a turnover of IDR
1,500,000,000, and posted a profit of IDR 650,000,000
What types of tax rates can be imposed on the company's income?
Answer:
Income Tax RATES ARTICLE 31E

Law Income Tax

70
PT. Ami Jaya is one of the leading contractors in Indonesia. In 2019, the
company earned a turnover of IDR 100 billion.
What types of tax rates can be imposed on the company's

income?
Answer:
FINAL Income Tax RATES ARTICLE 4 Paragraph (2) FOR CONSTRUCTION SERVICE
BUSINESS

71
In 2019 PT Alam Abadi had a gross turnover of IDR 4,000,000,000, with a taxable income of IDR 600,000,000.-
How much corporate income tax is owed if:
1. PT. Alam Abadi submitted an application for an MSME Certificate to the Director General of Taxes.
2. PT. Alam Abadi submits an application using the normal rate according to Article 17 of the Income Tax Law.

Machine Translated by Google
72
Answer :
Answer 1:
1. If you apply for an MSME Certificate to the Director General of Taxes, then use the MSME Final
Income Tax of 0.5%
Calculation:
VAT payable = Turnover x Income Tax rate of
0.5%
= IDR 4,000,000,000 x 0.5%
= IDR 20,000,000

73
Answer 2:
2. If you submit an application using the normal rate according to Article 17 of the Income Tax Law, then
use Article 31E of the Income Tax Law
Calculation:
VAT payable = Taxable Income x (50% x normal Income Tax
rate)
= IDR 600,000,000 x (50% x 25%)
= IDR 600,000,000 x 12.5%
= IDR 75,000,000

74
In 2019 PT Andal Sejati had a gross turnover of IDR 20,000,000,000 with taxable income (PKP) of IDR
2,000,000,000.-
PT. ABC has paid Income Tax 25 during the period March to December 2019 in the amount of IDR 10,000,000
per month and have proof of Income Tax 23 worth IDR 25,000,000.
How much corporate income tax is payable?
And Article 25 Income Tax installments in 2020?

75
Answer :
Gross circulation is between IDR 4,800,000,000 to IDR 50,000,000,000
Calculation:
- Amount of Taxable Income that gets the facility:
(IDR 4,800,000,000/IDR 20,000,000,000) x IDR 2,000,000,000
= IDR 480,000,000,-
- Total Taxable Income that does not receive facilities:
(IDR 2,000,000,000 – IDR 480,000,000)
= IDR 1.520.000.000,-

76
Income Tax payable is:

(50% x 25%) x IDR 480,000,000 = IDR 60,000,000,-
25% x IDR 1,520,000,000 = IDR 380,000,000,-
IDR 440,000,000,-
Tax Credit:
- Income Tax Article 25 for the period March to December = IDR 100,000,000,-
2019
- Income Tax = IDR 25.000.000,- IDR
Article 23
- 125,000,000,-
So the Income Tax that still has to be paid: =

IDR
440,000,000 – IDR 125,000,000

= IDR 315.000.000,-

77
The calculation of Income Tax 25 installments for 2020 is:
(50% x 22%) x IDR 480,000,000 = IDR 52,800,000,-
22% x IDR 1,520,000,000 = IDR 334,400,000,-
IDR 387.200.000,-
Article 23 Income Tax Credit IDR 25.000.000,-
Corporate income tax owed IDR 362.200.000,-
So, installments of Income Tax Article 25 of
2020: = IDR 362,200,000,- / 12 months
= IDR 30.183.000,-

I CAN!!
Income tax ?
I
CAN!!
THANKYO
U

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Income tax

namely taxes that

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

The Income Tax Law regulates tax imposition materials which

TAX SUBJECT Distinction

TAX SUBJECT Suject Domestic Subject Overseas

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Differences in Tax Subjects Domestic -

2. Taxable Income is calculated from Taxable Income is calculated from

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

When the tax subject begins and ends

Individuals or Entities who earn

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Income Tax object income that is Article 4 Paragraph (1)

Final Income Tax object Article 4 Paragraph (2)

Income that is not a Article 4 Paragraph (3)

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

income which is the object of income tax

Income Type Information

final taxable income

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Non Object & non

Is • Individuals who do not

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

DETERMINE THE TYPE OF INCOME FROM THE FOLLOWING DESCRIPTION :

Allowance IDR 20,000,000,- Not Finals

Commission IDR 10,000,000,- Not Finals

Income from Insurance Claims IDR 15,000,000,- Not Object

Income from renting out houses IDR 20,000,000,- Finals

Income from deposit interest IDR 10,000,000,- Finals

Received a birthday gift from a friend IDR 2.000.000,- Not Final

Not Final, Final, & Not an Object

Profit income from CV Indah of IDR 7,000,000,- Not Object

Teaching income at Trisakti University is IDR 40.000.000,- Not Final

Income from selling houses in Sunter for IDR 1.500.000.000,- Final

Get income from Malaysia of IDR 30,000,000,- Not Final

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

COSTS THAT MAY & SHOULD NOT BE DEDUCTED FROM INCOME

What may be deducted : What is not deductible: Based on

1. Distribution of profits by name and in any form. Expenses

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Father Siblings Parents in law

Biological children Younger brother Younger brother-in-law

Individual Income Income Non taxable

For Employee Self (TK/0) 54,000,000 4,500,000

For employees who are married (K/0) 58,500,000 4,875,000

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

No. Name Date. Born Family Relations Information

1 Lenny 14/11/1953 Wife Housewife

3 Andrew 14/09/1980 biological child Student

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

Mr. Hendra, an electronic trading business, has a wife and family

5 Lina 08/01/1979 Anton's wife PT. ABC employees

7 House 26/05/1983 ------- housekeeper

Non-taxable income Mr.

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

WHEN IS A ACCORDING TO CONDITIONS

Endah Mirasanty SH, SE., Ak., M. Ak., CA, BKP

The wife receives

There is a Separation agreement

Husband and wife are Carry out their