Periodic Tax Return

Periodic Tax Return reporting for all types of taxes consisting of the following

1. PPh Article 21/26

Withholding of PPh Article 21 on Income in connection with work, services, or activities in any name and in whatever form received or accrued by domestic Taxpayers must be carried out by:

• Employers who pay salaries, wages, honorarium, benefits, and other payments as compensation in connection with work performed by employees or non-employees;
• Government treasurers who pay salaries, wages, honorarium, allowances, and other payments in connection with work, services, or activities;
• Pension funds or other bodies that pay pensions and other payments under any name in the context of retirement;
• Agencies that pay honorarium or other payments as compensation in connection with services, including the services of experts who perform free work; and
• Event organizers making payments associated with an organized activity

The rate applied to taxpayers who do not have a Taxpayer Identification Number (NPWP) is 20% (twenty percent) higher than those who can show a Taxpayer Identification Number. Provisions regarding instructions for implementing withholding tax on income in connection with work, services or activities are regulated by or based on a Minister of Finance Regulation.

For the incomes mentioned below, in whatever name and in whatever form, which is paid, made available to be paid, or whose payment is due by a government agency, domestic tax subject, activity organizer, permanent establishment, or other representative of a foreign company to foreign Taxpayers other than permanent establishments in Indonesia, PPh Article 26 is deducted in the amount of 20% (twenty percent) of the gross amount by the party obligated to pay:

1. Dividend;
2. Interest includes premiums, discounts and compensation in connection with guarantees of debt repayment;
3. Royalties, rent and other income in connection with the use of property;
4. Rewards in connection with services, work and activities;
5. Prizes and awards;
6. Pension and other periodic payments;
7. Premium swaps and other hedging transactions; and/or
8. Profits due to debt relief.

2. PPh Article 22

The Minister of Finance can determine:

• Government treasurer to collect PPh Article 22 in connection with payments for delivery of goods;
• Certain bodies collect PPh Article 22 from taxpayers who carry out activities in the import sector or business activities in other fields; and
• Certain corporate taxpayers are required to collect PPh Article 22 from buyers on the sale of goods classified as very luxurious.

PPh Article 22 collectors are:

• Foreign Exchange Bank and the Directorate General of Customs and Excise (DJBC) on the object of PPh Article 22 on the import of goods;
• Government Treasurer and Budget User Authority (KPA) as a tax collector at the Central Government, Regional Government, Government Agencies or Institutions and other state institutions, with respect to payments for purchases of goods;
• Expenditure treasurer with regard to payments for purchases of goods made with the supply of money mechanism (UP);
• Budget User Authority (KPA) or the official issuing a Payment Order given by a delegation by the Budget User Authority (KPA), regarding payments for purchases of goods to third parties made using the direct payment mechanism (LS);
• State-Owned Enterprises (BUMN), namely business entities whose capital is wholly or mostly owned by the state through direct participation originating from separated state assets, which include:
  • PT Pertamina (Persero), PT Perusahaan Listrik Negara (Persero), PT Perusahaan Gas Negara (Persero) Tbk., PT Telekomunikasi Indonesia (Persero) Tbk., PT Garuda Indonesia (Persero) Tbk., PT Pembangunan Perumahan (Persero) Tbk., PT Wijaya Karya (Persero) Tbk., PT Adhi Karya (Persero) Tbk., PT Hutama Karya (Persero), PT Krakatau Steel (Persero);
  • State-Owned Enterprise Banks, with regard to payments for purchases of goods and/or materials for the purposes of their business activities.
• Industries and exporters engaged in the forestry, plantation, agriculture, livestock, and fishery sectors, for the purchase of materials from collectors for their industrial needs or export.
• Industries or business entities that purchase coal mining commodities, metal minerals, and non-metallic minerals, from entities or individuals holding mining business permits.

3. PPh Article 23/26

For the income mentioned below in the name and in whatever form that is paid, made available to be paid, or payment is due by Article 23 withholding tax to a resident taxpayer or permanent establishment, PPh Article 23 is deducted by the party obligated to pay:

• 15% (fifteen percent) of the gross amount of dividends, interest and royalties; and prizes, awards, bonuses, and the like other than those that have been deducted by PPh Article 21
• 2% (two percent) of the gross amount of:
  • Rent and other income in connection with the use of assets, except for rent and other income in connection with the use of assets that have been subject to PPh Article 4 paragraph (2); and
  • Benefits in connection with technical services, management services, construction services, consulting services, and other services other than services that have been deducted by PPh Article 21.

Withholding PPh Article 23 is not made for:

• Income paid or owed to the bank;
• Rent paid or payable in connection with an option lease;
• Dividends that are not PPh objects and dividends received by individuals (which are final PPh objects);
• The portion of profits that are not PPh objects;
• The remaining results of cooperative operations paid by the cooperative to its members; and
• Income paid or payable to business entities for financial services that function as distributors of loans and/or financing regulated by a Minister of Finance Regulation.

4. PPh Article 25

To ease the burden of tax payable at the end of the year, if you are not a taxpayer using the final PPh rate based on PP 23 of 2018 or not including certain individual entrepreneurs, you are required to make PPh Article 25 installments every month.

The amount of PPh Article 25 installments in general:

• Net income is multiplied by the tax rate, then divided by twelve or number of months in the tax year portion
• In the case of individual taxpayers, net income is first deducted by non-taxable income before being multiplied by the tax rate.

Net Income is:

• In the case of individual taxpayers who is bookkeeping and from it is possible to calculate the amount of net income every month, then the net fiscal income is calculated based on their bookkeeping;
• In the event that an individual taxpayer only keeps records using the Net Income Calculation Norms or keeps bookkeeping but from the books it cannot be calculated the amount of net income each month, net fiscal income is calculated based on the Net Income Calculation Norms on gross circulation or income.
• In the case of corporate taxpayers, net fiscal income is calculated from the results of calculating gross income minus costs for obtaining, collecting and maintaining income.

5. Final PPh (PPh Final Article 4 Paragraph 2)

The income below can be subject to Final PPh Article 4 paragraph (2):

• Income in the form of interest on deposits and other savings, interest on government bonds and debt securities, and interest on deposits paid by cooperatives to individual cooperative members;
• Income in the form of lottery prizes;
• Income from transactions in shares and other securities, derivative transactions traded on the stock exchange, and transactions in the sale of shares or transfer of equity participation in partner companies received by venture capital companies;
• Income from transactions of transfer of assets in the form of land and/or buildings, construction service businesses, real estate businesses, and land and/or building rentals; and
• Other specified income

which is regulated by or based on Government Regulations.

6. PPh article 15
   1. PPh Article 15 on Domestic Flight Charter

All compensation or replacement value in the form of money or monetary value received or obtained by a Taxpayer based on a charter agreement for the transportation of people and/or goods loaded from one port to another port in Indonesia and/or from a port in Indonesia to a port abroad.

Taxpayers for domestic airline companies are taxpayers of airline companies domiciled in Indonesia (SPDN Badan) who earn income based on charter agreements.

What is meant by a charter agreement includes all forms of charter, including the lease of aircraft space for people and/or goods ("space charter").

2. PPh Article 15 on Domestic Shipping

Taxpayers of domestic shipping companies are subject to PPh on all income received or earned, both from Indonesia and from outside Indonesia.

Therefore, the income that becomes the object of PPh includes income received or earned by taxpayers from the transportation of people and/or goods, including the rental of boats from:

• Ports in Indonesia to other ports in Indonesia,
• Ports in Indonesia to outside ports in Indonesia,
• Ports outside Indonesia to ports in Indonesia,
• ports outside Indonesia to other ports outside Indonesia

3. PPh Article 15 on Overseas Shipping and/or Flights

The PPh object is all replacement values or compensation in the form of money or monetary value from the transportation of people and/or goods loaded from one port to another port in Indonesia and/or from a port in Indonesia to a port abroad.

Thus, what is not included in the reimbursement or compensation received or obtained by the foreign shipping company and/or flight is that from the transportation of people and/or goods from overseas ports to ports in Indonesia.

4. PPh Article 15 on Representative Offices/liaison offices in Indonesia

Foreign Taxpayers who have a trade representative office (representative office/liaison office), hereinafter abbreviated as KPD, in Indonesia who come from countries that do not have a Double Taxation Avoidance Agreement (P3B) with Indonesia.

5. PPh Article 15 on Taxpayers who carry out international tolling service business activities in the production of children's toys

Taxpayers conducting international toll manufacturing services (contract manufacturing) are domestic corporate taxpayers performing services for the manufacture or assembling of goods in the form of children's toys, with materials, specifications, technical instructions and determination of fees for services from the ordering party. domiciled abroad and has a special relationship with the Taxpayer.

7. VAT (Value Added Tax)

Value Added Tax is imposed on: (Article 4 paragraph (1) of the VAT Law)

• Delivery of Taxable Goods (BKP) within the Customs Area carried out by Entrepreneurs;
• Taxable Goods Import;
• Submission of Taxable Services (JKP) within the Customs Area carried out by Entrepreneurs;
• Pemanfaatan BKP Tidak Berwujud dari luar Daerah Pabean di dalam Daerah Pabean;
• Utilization of JKP from outside the Customs Area within the Customs Area;
• Export of Tangible Taxable Goods by Taxable Entrepreneurs (PKP);
• Export of Intangible Taxable Goods by PKP; and
• Export of JKP by PKP.

In particular VAT is also imposed on:

• Self-construction activities carried out not in business or work activities by individuals or entities whose results are used alone or used by other parties.
• Delivery of Taxable Goods in the form of assets which, according to their original purpose, were not for sale and purchase by PKP, except for the transfer of assets whose Input Tax cannot be credited because the acquisition of Taxable Goods or Taxable Goods does not have a direct relationship with business activities and the acquisition and maintenance of sedans, jeeps, station wagons, vans, and combos unless traded or leased.

Entrepreneurs who carry out BKP submission activities include both Entrepreneurs who have been confirmed as PKP and Entrepreneurs who should be confirmed as PKP, but have not been confirmed.

Delivery of goods subject to tax must meet the following requirements:

• Tangible goods submitted are BKP,
• The intangible goods submitted are Intangible Taxable Goods,
• Delivery is carried out in the Customs Area; and
• Submission is made in the context of business activities or work.

Entrepreneurs conducting activities for the delivery of Taxable Services include both Entrepreneurs who have been confirmed as Taxable Entrepreneurs and Entrepreneurs who should be confirmed as Taxable Entrepreneurs, but have not been confirmed.

Tax-payable service delivery must meet the following requirements:

• Services provided are Taxable Services,
• Delivery is carried out in the Customs Area; and
• Submission is made in business activities or work.

Included in the definition of delivery of Taxable Services are Taxable Services that are used for their own interests and/or that are provided free of charge.