Private Tax
PRIVATE TAX
Indonesia has many regulations and one of them is a regulation on personal tax reporting, both monthly and annual reporting.
Where in the process of making this personal tax report must be done correctly and on time.
Tax is one of the state revenues in Indonesia which is obtained from community contributions used for the development of the State and other public facilities. In Indonesia, taxation is one of the largest state revenues from both corporate and personal taxes. The tax itself will function as the state budget or income, to regulate or implement government policies in the social, economic and business fields,
to finance public expenditure and national development and for various other State needs.
Indoned Consultations who are willing to assist you in making personal tax reporting and making financial reports accurately and on time.
Personal Tax
Personal tax in Indonesia is divided into 2 (two) kinds of taxes, namely personal tax in the country and foreign personal tax. In accordance with the Law on Income Tax (PPh) Number 36 of 2008, what is meant by a personal tax in the country is:
1. A private person residing in Indonesia.
2. Individuals who have been in Indonesia for more than 183 days in 12 months.
3. A private person who is in Indonesia within one tax year and intends to live in Indonesia.
In accordance with the Law – Income Tax Number 36 the Year 2008, what is meant by the foreign tax is:
| 1. | An individual who has not resided in Indonesia for more than 183 days in 12 months but runs a business and conducts business activities in the form of a permanent business entity in Indonesia. |
| 2. | An individual who has not resided in Indonesia for more than 183 days in 12 months but receives income from Indonesia not in conducting business activities in the form of a permanent establishment in Indonesia. |
What are The Obligations of an Individual Taxpayer?
An individual taxpayer is obliged to report his income through the Annual Tax Return using a self-assessment system. Personal taxpayers are also required to pay and report taxes on their income every month with the provisions of the time set by the directorate general of taxes.
Table time of payment and tax reporting every month such as:
| Type Of Tax | Monthly Payment Deadline | Monthly Filing Deadline | Annual Filling Deadline |
|---|---|---|---|
| Corporate Income Tax | 15th of the following month | 30th of the following month | End of the 4th month after the tax years end. |
| Individual Income Tax | 15th of the following month | 31th of the following month | End of the 3th month after the tax years end. |
| PPh 21, PPh 23, and PPh 4 Paragraph 2 | 10th of the following month | 20th of the following month | N/A |
| Other Withholding Taxes | 10th of the following month | 20th of the following month | N/A |
| VAT | Before the VAT return filling deadline. | End of the following month | N/A |
Types of Personal Tax in Indonesia
Income Tax (PPh 21)
The income tax law is Law Number 7 of 1983 concerning Income Tax as amended several times, the latest by Law Number 36 of 2008. Income Tax Article 21, is the tax on income in the form of salary, wages, honorarium, benefits and other payments in whatever name and form in connection with work, services, and activities carried out by individual taxpayers of domestic tax subjects. If you need more information about our services, you can contact us at info@indo-ned.com.
Value Added Tax (PPN)
In Indonesia, there are many types of taxes, one of which is Value Added Tax (VAT). Value Added Tax (VAT) is one of the indirect taxes, that is, the burden of paying taxes is borne by the consumer, but the person responsible for the payment is borne by the seller. In other words, in the mechanism of collecting VAT, the VAT payment burden bearer, and the person responsible for depositing VAT are different parties.
In VAT, there are terms of entrepreneurs, small entrepreneurs, and taxable entrepreneurs. The definition of an entrepreneur is found in Article 1 number 14 of Law Number 8 of 1983 as amended the latest by Law Number 42 of 2009 concerning Value Added Tax and Sales Tax on Luxury Goods.
Land Tax and Building Tax (PBB)
Land and Building Tax in Indonesia is a state tax in which the majority of the revenue is regional income which is used, among other things, to provide facilities that are also enjoyed by the Central Government and Regional Governments.
Therefore, it is natural for the Central Government to also finance the provision of these facilities through the payment of Land and Building Taxes. Regarding land and or buildings owned by individuals and or entities used by the state, the taxation obligations depend on the agreement entered into.
Personal Tax Rate
Income Tax (PPh 21)
In the payment of income tax article 21, of course, we must look at the rate used for the basis of its calculation, where the tax rate for income tax 21 is a progressive rate. The following income tax rate article 21 can be used as a basis for calculations:
| No | Individual Income Tax | Tax Rate |
|---|---|---|
| 1 | Income up to IDR 50 Million | 5% |
| 2 | Income over IDR 50 Million to IDR 250 Million | 15% |
| 3 | Income over IDR 250 Million to IDR 500 Million | 25% |
| 4 | Income over IDR 500 Million | 30% |
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There is a Bill on the Harmonization of Tax Regulations (RUU HPP) into Law (UU) Number 7 of 2021 on October 29, 2021. There has been a change in the personal income tax rate to:
| No | Individual Income Tax | Tax Rate |
|---|---|---|
| 1 | Income up to IDR 60 Million | 5% |
| 2 | Income over IDR 60 Million to IDR 250 Million | 15% |
| 3 | Income over IDR 250 Million to IDR 500 Million | 25% |
| 4 | Income over IDR 500 Million to IDR 5 Billion | 30% |
| 5 | Income over IDR 5 Billion | 35% |
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Value Added Tax (PPN)
Value-added tax rate according to the provisions of law number 42 of 2009 article 7, which has now been amended to (UU) Number 7 of 2021 on October 29, 2021:
| 1. | The VAT rate (Value Added Tax) is 10% valid until March 2022. |
| 2. | The VAT rate (Value Added Tax) is 11% applies from April 2022. |
| 3. | The VAT (Value Added Tax) of 0% (zero percent) is applied to: A. Exports of Tangible Taxable Goods. |
| Â | B. Intangible Taxable Goods Exports. |
| Â | C. Taxable Export Services. |
| 4. | The tax rate as referred to in paragraph (1) may change to a minimum of 5% (five percent) and a maximum of 15% (fifteen percent) as stipulated by a Government Regulation. |
Land Tax and Building Tax (PBB)
Land and building tax rates that apply from the past until now are still the same, which is equal to 0.5%.
Tax Service Report With Indoned Consultancy
Every foreign investment company or domestic investment company established in Indonesia is required to make tax calculations and report their tax obligations. There are many types of taxes that are imposed for a company. To be able to carry out tax reporting, each company is required to have a tax identification number (NPWP). Corporate tax is a tax that charged to business entities collected in the territory of Indonesia.
To assist your company in data collection for the process of making tax reports in Indonesia. Indoned Consultancy was located in Jakarta, Bali, and the Netherlands is ready to assist you with a professional team in making financial reports and tax reports for your company. We provide a workflow for preparing Tax reports by the Indoned Consultancy team.
Disclaimer:
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
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