Tax Services Indonesian Pocket

Tax Services
Indonesian
Pocket Tax Book
2014
www.pwc.com/id
Contents
Corporate Income Tax
1
Tax rates; Tax residence; Tax payments; Business profits; Capital allowances; Disallowed deductions; Losses; Profit distributions; Deemed profit margins; Special industries and activities; Transfer Pricing Individual Income Tax
16
Normal tax rates; Concessional tax rates; Main personal relief; Tax residence; Registration and filing; Tax payments; Benefits-in-kind (BIK); Social security system; Deemed salaries
Withholding Taxes
24
Articles 21, 22, 4(2), 23 and 26 income taxes International Tax Agreements
34
Double Taxation Agreements; Tax Information Exchange Agreements Value Added Tax
44
General; VAT exemption facilities
Luxury-goods Sales Tax
56
Taxable goods other than motor vehicles; Motor vehicles Customs and Excise
62
Import Duty; Export Duty; Excise
Tax Concessions
66
Income tax concessions; LST concession; Concessions on special projects and special zones
Land and Building
77
Land and building tax; Tax on land and building transfer; Duty on the acquisition of land and building rights Stamp Duty
81
Tax Payments and Tax Return Filing
83
Accounting for Tax
87
Tax Audits and Tax Assessments
89
Tax Collection Using Distress Warrant
96
Tax Dispute and Resolution
98
Objections; Appeals; Other avenues for tax dispute resolution; Judicial Review Requests to the Supreme Court Contacts 102
Corporate Income Tax
Corporate Income Tax
Tax rates
Generally, a flat rate of 25% applies. Public companies that satisfy a minimum listing requirement of 40% and other conditions are entitled to a tax cut of 5% off the standard rate, giving them an effective tax rate of 20% (refer to page 69). Small enterprises, i.e. corporate taxpayers with an annual turnover of not more than Rp50 billion, are entitled to a 50% discount of the standard tax rate which is imposed proportionally on taxable income of the part of gross turnover up to Rp4.8 billion. Certain enterprises with gross turnover of not more than Rp 4.8 billion are subject to Final Tax at 1% of turnover.
Tax residence
A company is treated as a resident of Indonesia for tax purposes by virtue of having its incorporation or its domicile is in Indonesia. A foreign company carrying out business activities through a permanent establishment (PE) in Indonesia will generally have to assume the same tax obligations as a resident taxpayer.
Tax payments
Resident taxpayers and Indonesian PEs of foreign companies have to settle their tax liabilities either by direct payments, third party withholdings, or a combination of both. Foreign PwC Indonesia
Indonesian Pocket Tax Book 2014
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Corporate Income Tax
companies without a PE in Indonesia have to settle their tax liabilities for their Indonesian-sourced income through withholding of the tax by the Indonesian party paying the income.
Monthly tax instalments (Article 25 income tax) constitute the first part of tax payments to be made by resident taxpayers and Indonesian PEs as a prepayment of their current year Corporate Income Tax (CIT) liability. A monthly tax instalment is generally calculated using the most recent Corporate Income Tax Return (CITR). Special instalment calculations apply for new taxpayers, finance lease companies, banks, state-owned companies, listed companies and other taxpayers with periodical reporting requirements.
The tax withheld by third parties on certain income (Article 23
income tax) or tax to be paid in advance on certain transactions (e.g., Article 22 income tax on imports) also constitute prepayments for the current year CIT liability of the income recipient or the party conducting the import (refer to pages 29-31 for income items subject to Article 23 income tax and pages 24-28 for transactions subject to Article 22 income tax).
If the total amount of tax paid in advance through the year (Articles 22, 23, and 25 income taxes) and the tax paid abroad (Article 24 income tax) is less than the total CIT due, the taxpayer has to settle the shortfall before filing its CITR. Such a payment is referred to as Article 29 income tax.
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Corporate Income Tax
Certain types of income earned by resident taxpayers or Indonesian PEs are subject to final income tax. In this respect, the tax withheld by third parties (referred to as Article 4(2) income tax) constitutes the final settlement of the income tax for that particular income (refer to pages 28-29 for income items subject to final income tax under Article 4(2) income tax).
For foreign companies without a PE in Indonesia, the tax withheld from their Indonesia-sourced income by the Indonesian party paying the income (Article 26 income tax) constitutes a final settlement of their income tax due (refer to pages 32-33 for income items subject to Article 26 income tax).
Business profits
Taxable business profits are calculated on the basis of normal accounting principles as modified by certain tax adjustments.
Generally, a deduction is allowed for all expenditure incurred to obtain, collect and maintain taxable business profits. A timing difference may arise if an expenditure recorded as an expense for accounting cannot be immediately claimed as a deduction for tax.
Capital allowances
Depreciation
Expenditure incurred in relation to assets with a beneficial life of more than one year are categorized and depreciated from the month of acquisition by the consistent use of either the PwC Indonesia
Indonesian Pocket Tax Book 2014
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Corporate Income Tax
straight-line or the declining-balance method, as follows: 1. Category 1 – 50% (declining-balance) or 25% (straight-line) on assets with a beneficial life of four years.
Examples of assets in this category are computers, printers, scanners, furniture and equipment constructed of wood/rattan, office equipment, motorcycles, special tools for specific industries/services, kitchen equipment, manual equipment for agriculture, farming, forestry and fishery industries, light machinery for the food and drink industries, motor vehicles for public transportation, equipment for the semi-conductor industry, tools and accessories for deep water anchor equipment rentals, and base station controller for the cellular telecommunication services.
2. Category 2 – 25% (declining-balance) or 12.5%
(straight-line) on assets with a beneficial life of eight years. Examples of assets in this category are furniture and equipment constructed of metal, air conditioners, cars, buses, trucks, speed-boats, containers and the like.
The category also covers machinery for agriculture, plantations, forestry activity, fisheries, for food and drink, light machinery, logging equipment, equipment for construction, heavy vehicles for transportation, warehousing, and communication, telecommunications equipment, equipment for the semi-conductor industry, tools for deep water anchor equipment rentals, and tools for cellular telecommunication services.
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3. Category 3 – 12.5% (declining-balance) or 6.25%
(straight-line) on assets with a beneficial life of 16
years. Examples of assets in this category are machines for general mining other than in the oil and gas sector, machines for the textile, timber, chemical and machinery industries, heavy equipment, docks and vessels for transportation and communication, and other assets not included in the other categories.
4. Category 4 – 10% (declining-balance) or 5% (straight-line) on assets with a beneficial life of twenty years.
Examples of assets in this category are heavy construction machinery, locomotives, railway coaches, heavy vessels, and docks.
5. Building category – 5% (straight-line) on assets in the permanent building category with a useful life of 20 years; or 10% (straight-line) on assets in the non-permanent building category with a useful life of ten years. Included in the cost of the buildings is the Duty on the Acquisition of Land and Building Rights ( Bea Pengalihan Hak atas Tanah dan Bangunan/BPHTB).
More comprehensive lists of the assets included in each category are set out in certain Minister of Finance (MoF) regulations. Separate lists of assets and depreciation rates for the oil and gas sector are also specified in a MoF regulation.
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Corporate Income Tax
Special rules apply to assets used for certain industries (i.e., forestry, plantation and cattle breeding) and assets used in certain areas for KAPETs (see pages 72-73).
Amortisation
Intangible property or costs, including the cost of extending building use rights, rights for business use, rights for use and goodwill with a useful life of more than one year, should be amortised on the following bases, as appropriate: a. By using the straight-line or the declining-balance method at the rates specified in categories 1, 2, 3, and 4 under Depreciation (above), based on the useful life of the property:
Category 1: 4 years
Category 2: 8 years
Category 3: 16 years
Category 4: 20 years
Classification into the appropriate category is determined on the basis of the nearest useful life (e.g., an intangible asset with a useful life of six years may fall under Category 1 or Category 2, while an intangible asset with a useful life of five years is under Category 1).
b. The costs of incorporation and expansion of the capital of an enterprise are claimed in full in the year in which the expenditure is incurred or are amortised using either the
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declining-balance or straight-line method at the following rates:
Category 1:50% declining-balance; 25% straight-line Category 2:

Hasil (Bahasa Indonesia) 1:

Layanan pajak Indonesia Buku saku pajak 2014 www.PWC.com/ id Isi Pajak pendapatan perusahaan 1 Tarif pajak; Kediaman pajak; Pembayaran pajak; Keuntungan bisnis; Tunjangan modal; Batasan pengurangan; Kerugian; Distribusi laba; Margin keuntungan yang dianggap; Industri khusus dan kegiatan; Mentransfer harga pajak pendapatan Individual 16 Tarif pajak yang normal; Tarif pajak konsesional; Bantuan pribadi utama; Kediaman pajak; Pendaftaran dan pengajuan; Pembayaran pajak; Manfaat dalam bentuk (BIK); Sistem jaminan sosial; Dianggap gaji Pemotongan/pemungutan pajak 24 Artikel 21, 22, 4(2), 23 dan perjanjian pajak internasional 26 pajak penghasilan 34 Ganda perjanjian perpajakan; Pertukaran informasi pajak perjanjian pajak pertambahan nilai 44 Umum; Fasilitas pembebasan PPN Pajak penjualan barang mewah 56 Barang kena pajak selain kendaraan bermotor; Kendaraan bermotor Bea dan Cukai 62 Bea masuk; Pajak Ekspor; Cukai Konsesi pajak 66 Konsesi pajak penghasilan; Konsesi LST; Konsesi pada proyek-proyek khusus dan zona khusus Tanah dan bangunan 77 Tanah dan bangunan pajak; Pajak atas tanah dan bangunan transfer; Tugas pada perolehan tanah dan bangunan hak materai 81 Pembayaran pajak dan pajak pengajuan 83 Akuntansi untuk pajak 87 Audit Pajak dan pajak penilaian 89 Menggunakan Distress menjamin pengumpulan pajak 96 Sengketa pajak dan resolusi 98 Keberatan; Naik banding; Jalan lain untuk penyelesaian sengketa pajak; Permintaan Judicial Review ke Mahkamah kontak 102 Corporate Income Tax Corporate Income Tax Tax rates Generally, a flat rate of 25% applies. Public companies that satisfy a minimum listing requirement of 40% and other conditions are entitled to a tax cut of 5% off the standard rate, giving them an effective tax rate of 20% (refer to page 69). Small enterprises, i.e. corporate taxpayers with an annual turnover of not more than Rp50 billion, are entitled to a 50% discount of the standard tax rate which is imposed proportionally on taxable income of the part of gross turnover up to Rp4.8 billion. Certain enterprises with gross turnover of not more than Rp 4.8 billion are subject to Final Tax at 1% of turnover. Tax residence A company is treated as a resident of Indonesia for tax purposes by virtue of having its incorporation or its domicile is in Indonesia. A foreign company carrying out business activities through a permanent establishment (PE) in Indonesia will generally have to assume the same tax obligations as a resident taxpayer. Tax payments Resident taxpayers and Indonesian PEs of foreign companies have to settle their tax liabilities either by direct payments, third party withholdings, or a combination of both. Foreign PwC Indonesia Indonesian Pocket Tax Book 2014 1 Corporate Income Tax companies without a PE in Indonesia have to settle their tax liabilities for their Indonesian-sourced income through withholding of the tax by the Indonesian party paying the income. Monthly tax instalments (Article 25 income tax) constitute the first part of tax payments to be made by resident taxpayers and Indonesian PEs as a prepayment of their current year Corporate Income Tax (CIT) liability. A monthly tax instalment is generally calculated using the most recent Corporate Income Tax Return (CITR). Special instalment calculations apply for new taxpayers, finance lease companies, banks, state-owned companies, listed companies and other taxpayers with periodical reporting requirements. The tax withheld by third parties on certain income (Article 23 income tax) or tax to be paid in advance on certain transactions (e.g., Article 22 income tax on imports) also constitute prepayments for the current year CIT liability of the income recipient or the party conducting the import (refer to pages 29-31 for income items subject to Article 23 income tax and pages 24-28 for transactions subject to Article 22 income tax). If the total amount of tax paid in advance through the year (Articles 22, 23, and 25 income taxes) and the tax paid abroad (Article 24 income tax) is less than the total CIT due, the taxpayer has to settle the shortfall before filing its CITR. Such a payment is referred to as Article 29 income tax. 2 Indonesian Pocket Tax Book 2014 PwC Indonesia Corporate Income Tax Certain types of income earned by resident taxpayers or Indonesian PEs are subject to final income tax. In this respect, the tax withheld by third parties (referred to as Article 4(2) income tax) constitutes the final settlement of the income tax for that particular income (refer to pages 28-29 for income items subject to final income tax under Article 4(2) income tax). For foreign companies without a PE in Indonesia, the tax withheld from their Indonesia-sourced income by the Indonesian party paying the income (Article 26 income tax) constitutes a final settlement of their income tax due (refer to pages 32-33 for income items subject to Article 26 income tax). Business profits Taxable business profits are calculated on the basis of normal accounting principles as modified by certain tax adjustments. Generally, a deduction is allowed for all expenditure incurred to obtain, collect and maintain taxable business profits. A timing difference may arise if an expenditure recorded as an expense for accounting cannot be immediately claimed as a deduction for tax. Capital allowances Depreciation Expenditure incurred in relation to assets with a beneficial life of more than one year are categorized and depreciated from the month of acquisition by the consistent use of either the PwC Indonesia Indonesian Pocket Tax Book 2014 3 Corporate Income Tax straight-line or the declining-balance method, as follows: 1. Category 1 – 50% (declining-balance) or 25% (straight-line) on assets with a beneficial life of four years. Examples of assets in this category are computers, printers, scanners, furniture and equipment constructed of wood/rattan, office equipment, motorcycles, special tools for specific industries/services, kitchen equipment, manual equipment for agriculture, farming, forestry and fishery industries, light machinery for the food and drink industries, motor vehicles for public transportation, equipment for the semi-conductor industry, tools and accessories for deep water anchor equipment rentals, and base station controller for the cellular telecommunication services. 2. Category 2 – 25% (declining-balance) or 12.5% (straight-line) on assets with a beneficial life of eight years. Examples of assets in this category are furniture and equipment constructed of metal, air conditioners, cars, buses, trucks, speed-boats, containers and the like. The category also covers machinery for agriculture, plantations, forestry activity, fisheries, for food and drink, light machinery, logging equipment, equipment for construction, heavy vehicles for transportation, warehousing, and communication, telecommunications equipment, equipment for the semi-conductor industry, tools for deep water anchor equipment rentals, and tools for cellular telecommunication services. 4 Indonesian Pocket Tax Book 2014 PwC Indonesia Corporate Income Tax 3. Category 3 – 12.5% (declining-balance) or 6.25% (straight-line) on assets with a beneficial life of 16 years. Examples of assets in this category are machines for general mining other than in the oil and gas sector, machines for the textile, timber, chemical and machinery industries, heavy equipment, docks and vessels for transportation and communication, and other assets not included in the other categories. 4. Category 4 – 10% (declining-balance) or 5% (straight-line) on assets with a beneficial life of twenty years. Examples of assets in this category are heavy construction machinery, locomotives, railway coaches, heavy vessels, and docks. 5. Building category – 5% (straight-line) on assets in the permanent building category with a useful life of 20 years; or 10% (straight-line) on assets in the non-permanent building category with a useful life of ten years. Included in the cost of the buildings is the Duty on the Acquisition of Land and Building Rights ( Bea Pengalihan Hak atas Tanah dan Bangunan/BPHTB). More comprehensive lists of the assets included in each category are set out in certain Minister of Finance (MoF) regulations. Separate lists of assets and depreciation rates for the oil and gas sector are also specified in a MoF regulation. PwC Indonesia Indonesian Pocket Tax Book 2014 5 Corporate Income Tax Special rules apply to assets used for certain industries (i.e., forestry, plantation and cattle breeding) and assets used in certain areas for KAPETs (see pages 72-73). Amortisation Intangible property or costs, including the cost of extending building use rights, rights for business use, rights for use and goodwill with a useful life of more than one year, should be amortised on the following bases, as appropriate: a. By using the straight-line or the declining-balance method at the rates specified in categories 1, 2, 3, and 4 under Depreciation (above), based on the useful life of the property: Category 1: 4 years Category 2: 8 years Category 3: 16 years Category 4: 20 years Classification into the appropriate category is determined on the basis of the nearest useful life (e.g., an intangible asset with a useful life of six years may fall under Category 1 or Category 2, while an intangible asset with a useful life of five years is under Category 1). b. The costs of incorporation and expansion of the capital of an enterprise are claimed in full in the year in which the expenditure is incurred or are amortised using either the 6 Indonesian Pocket Tax Book 2014 PwC Indonesia Corporate Income Tax declining-balance or straight-line method at the following rates: Category 1:50% declining-balance; 25% straight-line Category 2: