Summary of Tax Regulation (November)

Summary of Tax Regulation


Issuance of NPWP for Employees

This Circular asks the Tax Offices of Directorate General of Taxes to do the followings: a) to actively socialize the substances of the amendments to Income Tax Law, particularly regarding different treatments on individuals with NPWP and without NPWP; b) to exclusively convey notifications of the NPWP obligation to all employers/government treasurers in their respective working areas; c) to inform that the data conveyed by employers/government treasurers should be followed up by NPWP issuance in accordance with the procedure as regulated in the Regulation of Director General of Taxes No. PER-16/PJ/2007. This circular is issued in relation to the amendment to Income Tax Law to be actively promulgated on 1 January 2009 and in connection with the program of NPWP issuance through Individual Taxpayer extension. By referring to Article 2 Paragraph (1) of Law No. 28 year 2007, this circular confirms that all taxpayers already fulfilling the subjective and the objective requirement as meant by Law should register to Directorate General of Taxes in their respective working areas for obtaining NPWP. Further, by referring to Regulation of Director General of Taxes No. PER-16/PJ/2007, this circular confirms that the issuance of NPWP for individual taxpayer could be conducted through employers/government treasurers. If the employers/government treasurers have not yet fulfilled the physical requirement in form of copies of Identity Card (ID Card)/identities of their employees, the NPWP can be still issued so long that the number of ID Card/Noppen of the relevant employees can be provided. If the copies of ID Card are not yet completely provided, Local Tax Office (KPP Lokasi) is obliged to complete the copies to be accumulated with the documents of taxpayers prior to submission to KPP Domisili. The issuance of NPWP is conducted to all employees already fulfilling the requirement but not yet having NPWP. Lastly, by referring to the amendment to Income Tax Law, this circular confirms that: a) any employee/personnel not yet having NPWP shall be subject to Income Tax Article 21 with the rate 20% higher than the effective rate; b) resident individual already turning into 21 years old and not yet having NPWP are obliged to pay departure tax in term of traveling abroad.

187/PMK.03/2008, Procedure of Withholding, Remittance, Reporting and Management of Income Tax on Income from Construction Service Business

As the technical regulation under the Government Regulation (PP) No. 51 Year 2008, this regulation appears to reiterate the provisions already stipulated in PP No. 51 Year 2008. The new provision arising from this Finance Minister Regulations is regarding Income Tax withheld by service recipients that should be remitted to the State Treasury through Post Office/Bank at the latest on the 10th of the following month after the withholding. If the service recipients are not tax withholders, Income Tax due should be solely paid by the service providers at the latest on 15th of the following month after the payment receipt. The payment/remittance is made using Withholding Tax Slip (SSP)/other means similarly treated as SSP. The tax withholder submits the tax withholding evidence to the service provider subject to Income Tax withholding for every withholding. Later, the tax withholder should file the Periodic Income Tax Return within a maximum of 20 days after the month of tax withholding/payment receipt. If the due date of tax return reporting is on holidays including Saturday/national holidays, monthly tax returns can be filed on the following working day. Further, this regulation also inform that upon any contract signed prior to 1 January 2008 and any payment of contract or part of contract up to 31 December 2008, Income Tax imposition shall refer to PP No.51 Year 2008 and this Finance Minister Regulation. Income Tax already withheld/paid under PP No. 140 Year 2000 may be overbooked into payment of Final Income Tax under PP No. 51 Year 2008 so long as fulfilling the requirements as follows: a) Withholding and payment of Income Tax is performed on income from Construction Service business based on contracts signed since 1 January 2008; and payment of the said contract/part of contract is made at the latest up to the end of the month in which this Regulation is promulgated. If there is an underpayment of Final Income Tax after overbooking, the underpaid amount should be settled by the service provider at the latest on 15 December 2008. Lastly, in line with the validity of this Regulation, the Decree of Finance Minister Number 559/KMK.04/200 is revoked.

SE-66/PJ/2008, Regarding Service to Taxpayer in Relation to the End of Sunset Policy Program

This circular informs that in relation to the end of Sunset Policy Program at the nearest future, in line with the Article 37A of Law No. 28 dated 31 December 2008 and in the framework of rendering service to Taxpayers who will utilize the Sunset Policy program, then: 1) All Tax Offices in the entire Indonesia shall open to render service on: a) Saturday, 06, 13, and 20 December 2008 with regular work hour starting from 7.30 to 17:00 local time; b) Tuesday, 30 December 2008 and Wednesday, 31 December 2008 with expended work hour starting from 7:30 to 19:00 local time and shall consider the number of taxpayers to be served; and 2) the arrangement and monitoring of officers in charge shall be handed over to the respective head of tax office.

PER- 43/PJ/2008, Regarding Tax Corner and Tax Car

This regulation explains about the definition of Taxpayer Identification Number, Payment Slip of Acquisition Duty on Right of Land and Building (Surat Setoran Bea Perolehan Hak Atas Tanah dan Bangunan: SSBPHTB), and definition of other terms. The main provisions stipulated in this regulation are the obligation to state taxpayer Identification Number in SSB on BPTHB payment and Tax Payment Slip (SSP) on Income Tax payment on transfer of right of land and building. SSB exempted from the obligation to state the Taxpayer Identification Number is SSB on BPHTB payment by Individual Taxpayer with Sales Value of Taxable Object (Nilai Jual Objek Pajak:NJOP) and Acquisition Value of Taxable Object (Nilai Perolehan Objek Pajak: NPOP) transferred less than IDR 60 millions. SSP exempted from the said obligation is SSP for payment of Income Tax on income from transfer of asset in form of land and/or building by individual taxpayers with total tax to be paid less than IDR 3 millions.


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