Indonesian Tax Learning

Tax Regulations with Clarifications on the Beneficial Ownership Test

2011-11-16T13:40:00.002+07:00

On 30 April 2010, the Indonesian Directorate General of Taxation revised two key tax regulations for ruling the international taxation.

The New Regulations

Regulations PER-24/PJ/2010 and PER-25/PJ/2010 amend regulations PER-61/PJ/2009 and PER-62/PJ/2009 issued late last year. The revisions clarify three of the criteria, all of which must be met in order for an income recipient to be treated as a beneficial owner of the income for treaty purposes.

In short, the revised regulations provide welcome clarity to the application of the beneficial ownership test, which significantly increases certainty for structuring international transactions involving Indonesian companies. The revised regulations are generally encouraging both for offshore equity holding structures, as well as the prospect of a well structured high-yield debt issuance by an offshore holding company or subsidiary, where a substantial portion of the issuance is used onshore.

This alert summarizes the clarifications to these criteria, and analyzes the possible implications with respect to the use of offshore holding companies and high yield issuances in Indonesia.

The key clarifications are as follows.

The income recipient has an 'active operation or business'. This criterion may be evidenced by the foreign tax payer having business operations or activities in Indonesia that demonstrates costs incurred, work applied or effort directly associated with the business operations or activities in order to obtain, collect and maintain income, including significant efforts to main the business continuity of the entity.
The income recipient is 'subject to tax in its jurisdiction of residence' on the Indonesia sourced income. This criterion is met if the foreign tax payer is subject to tax legislation generally in its jurisdiction of residence, but does not require that the foreign tax payer necessarily pays such tax, whether due to a zero percent (0%) domestic rate of tax, an exemption from taxation due to a specific concession subject to objective requirements, or does not bear the economic burden of taxation, including where this is due to tax withheld by a foreign government, deferred or not collected.
Fifty percent (50%) or more of the Indonesia sourced income is not used to satisfy an obligation to another party in the form of interest, royalty or other reward. This criterion is met if not more than fifty percent (50%) of the foreign tax payer's total income, of any type or from any sources, as disclosed in the unconsolidated financial statements of the foreign tax payer, is used to meet obligations to third parties. This expressly excludes the payment of benefits to employees in the ordinary course of an employee-employer relationship, any other costs that are ordinarily incurred by the foreign tax payer in the conduct of its business and declaration of dividends to shareholders.

In addition, the revised regulations now accept the standard forms of certificate of domicile or tax residence letter generally issued by foreign tax authorities, and no longer require foreign tax authorities to certify the customised forms published under the previous regulations.

Analysis

The new regulations answer a number of questions on the application of the new tax rules, although they are not without questions themselves. However, the revised regulations are generally encouraging both for offshore equity holding structures, as well as the prospect of a well structured high-yield debt issuance by an offshore holding company or subsidiary, where a substantial portion of the issuance is used onshore.

One particular difficulty of interpretation arises from the application of the fifty percent (50%) threshold to the offshore company's total income, as opposed to its income derived from Indonesia. This suggests the possibility that a large offshore company with significant debt outstanding may not qualify for treaty benefits whether or not any portion of that debt has been passed on to Indonesia. It would seem more consistent to apply the fifty percent (50%) test to income derived from Indonesia only, although this is not an obvious interpretation under the new regulations.

Offshore Holding Companies

The clarification that dividend distributions by the offshore company are exempted from the fifty percent (50%) requirement is particularly welcome for offshore holding companies, as is the clarification that offshore companies can obtain tax benefits notwithstanding that the Indonesian source income may be exempt from taxation under domestic tax rules. As a result, offshore holding companies incorporated in traditional jurisdictions such as Singapore will continue to be entitled to benefits under the Indonesia-Singapore treaty as long as they have an active business or operations which satisfies the substance test. This would reduce the effective tax burden to the ten percent (10%) withholding rate set out in the Indonesia-Singapore tax treaty, as Singapore exempts foreign sourced dividend income from domestic taxation.¹

High-Yield Issuances

The new regulations expressly permit credits from withholding tax levied on interest income in Indonesia to reduce tax on that income to zero in the jurisdiction of the offshore company. This suggests the possibility of an efficient high-yield issuance structure if an Indonesian company has related operations in an appropriate jurisdiction. Jurisdictions such as Singapore and Hong Kong have sufficiently low corporate tax rates such that it may be possible to entirely offset domestic corporate tax on the interest income with tax credits from Indonesia. This would reduce the effective tax burden to the ten percent (10%) withholding rate set out in the relevant tax treaty. Alternatively a substantial Netherlands operating company may be entitled to the zero percent (0%) withholding rate under the Indonesia-Netherlands tax treaty, even if it utilises domestic tax elections to minimise the Netherlands tax burden.²

This type of structure would require an offshore company with an active business and operations, sufficient equity capital to satisfy the fifty percent (50%) rule and generally involve an objective reason for raising the financing itself, such as use of a portion of the proceeds for its own working capital, capital expenditures or acquisitions.

Conclusion

The revised regulations provide welcome clarity to the application of the beneficial ownership test, which significantly increases certainty for structuring international transactions involving Indonesian companies.

Footnotes:

1. Note that the new Indonesia-Hong Kong tax treaty may result in Hong Kong being an even more efficient jurisdiction as it provides for a withholding rate of 5% on dividend income, and Hong Kong does not impose domestic tax on dividend income. The Indonesia-Hong Kong tax treaty has been signed but has not yet entered into force pending ratification by both countries.

2. As discussed in previous articles, it may be possible to utilise a fiscal unity election in the Netherlands to substantially reduce Netherlands domestic tax.

Source: http://www.mondaq.com/article.asp?articleid=101148

Taxpayer and Taxpayer Identification Number

2011-11-15T17:28:00.003+07:00

When Should I Registering as a Taxpayer?

According to the Article 2 paragraph (1) General Provisions and Tax Procedures Law (Indonesian Tax Law No. 28 Year 2007) that every taxpayer who has met subjective and objective requirements as stipulated by tax laws shall be obliged to register at the office of the Directorate General of Taxes whose jurisdiction covers the residence or domicile of the Taxpayer and be provided with a Taxpayer Identification Number.

What is a Tax Identification Number?

The Tax Identification Number (In Indonesian term is called Nomor Pokok Wajib Pajak or NPWP) is a number issued to Taxpayers by the tax office to identify taxpayers and to assist them in fulfilling their taxation rights and obligations.

What if Taxpayer does not want to register to get the Tax Identification Number?

If the Taxpayer does not want to register, the Director General of Taxes may issue a Taxpayer Identification Number and or confirm a Taxable Person for VAT Purposes ex-officio in case a Taxpayer or a Taxable Person for VAT Purposes does not fulfill the obligations as referred to in article 2 paragraph (1) and (2) Indonesian Tax Law No. 28 Year 2007.
According to the Article 39 Paragraph (1) letter a Indonesian Tax Law No. 28 Year 2007 stipulated that whom soever deliberately fails to register for a Taxpayer Identification Number, or fails to register his business to be confirmed as a Taxable Person for Value Added Tax Purposes, which may cause losses to the revenues of the state, shall be penalized by imprisonment for a minimum of 6 (six) month or a maximum of 6 (six) years and a minimum fine equal to 2 (two) times the amount of unpaid or underpaid tax and a maximum fine equal to 4 (four) times the amount of unpaid or underpaid tax.

How to get an NPWP?

Taxpayer shall be obligated to register at the tax office in the district in which the taxpayer reside by submitting the following documents:
a. For Expatriate:
-Fill the Registration form
-Copy of passport
-Copy of limited stay permit card (KITAS)
-Copy of work permit (for taxpayer who is an employee
-Copy of tax identification number of the employer (for taxpayer who is an employee)
-Power of attorney (if his/her registration process is done by another party)
-Copy of business permit (for taxpayer who is conducting business or an independent professional).

b. For Indonesian Citizen
-Fill the Registration form
-Copy of identity card
-Power of attorney (if his/her registration process is done by another party)
-Certificate of place of business from the competent authority
-Copy of business permit (for taxpayer who is conducting business or an independent professional).

Transfer Pricing

2011-05-03T09:27:00.001+07:00

by: Tax Learning

The Directorate General of Taxation (DGT) has published the regulation about transfer pricing for Indonesian Taxpayers. The Director General of Taxation Regulation Number PER-43/PJ/2010 dated September 6, 2010 about Application of Common Business Practice and Arm’s Length Principle in Transaction between Taxpayers and Parties who have a special Relationship, represents the first specific guidance to Indonesian taxpayers since the Income Tax Law amendment in 1983. So far the determination of transfer pricing is only determined only by the DGT. But now, by the PER-43/PJ/2010, Indonesian Taxpayers compulsory to prepare the transfer pricing documentation. PER-43/PJ/2010 are based on the Organization for Economic Cooperation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the OECD Guidelines).

1. Scope of Regulation
PER-43/PJ/2010 applies to transactions between related parties which have an impact on the reporting of income or expenses for corporate tax purposes, include:
a. Sale, transfer, purchase or acquisition of tangible goods and/or intangible goods;
b. Payment of rental fees, royalties, or other payments arising from the provision of or use of tangible or intangible property;
c. Income received or costs incurred for provision of or utilization of services;
d. Cost allocation; and
e. Transfer or acquisition of property in the form of a financial instrument, as well as income or costs from the transfer or acquisition of the financial instrument.

2. Implementation of the arm’s length principle
Taxpayers that make the transactions between related parties should be implemented the arm’s length principle (ALP). ALP should be implemented by the following steps:
a. Perform a comparability analysis and identify comparables;
b. Determine the most appropriate Transfer Pricing Method;
c. Apply the ALP to the tested transaction based on the result of the comparability analysis and the selected transfer pricing method;
d. Document each step of the process in determining the arm’s length price or profit in consideration of the prevailing tax regulations.

Taxpayers are not required to comply with these steps for transactions with related parties who earn income or incur expenses of less than IDR 10 million, but still required to comply to perform bookkeeping as the regulation in Article 28 Tax Law No. 28 Year 2007 as amended by Tax Law No. 16 Year 2009.

a. Comparability Analysis

In conducting proportionality analysis as referred to in point 2 letter a above, must consider the following matters:
- transactions between the taxpayer and the entity has the Related Parties are considered comparable to transactions conducted between parties who do not have in terms of special Relationship:
* there is no material difference or significant conditions that could affect the price or income of the comparable transactions; or
* there are different conditions, but can be adjusted to eliminate the influence of a material or significant differences between these conditions on prices or profits;
- If the Internal and External Comparative Data is available with the same level of proportionality, the taxpayer must use the Internal Comparative Data for the determination of Fair Price or Fair Profit.

The comparability analysis outlined is based upon the five comparability factors contained in the OECD Guidelines, are as follows:
a) Characteristics of property or services;
b) Functional profile of parties involved;
c) Contractual terms;
d) Economic conditions; and
e) Business strategies.

Taxpayers required to document the steps, studies, and results of studies in conducting proportionality analysis and determination of comparison, the use of Comparative Data Internal and/or Comparative Data External and keep books, the basic records, or documents in accordance with applicable regulations.

b. Selection the Transfer Pricing Methods

OECD apply five methods of pricing that endorsed by the DGT and formally recognized in the Indonesian Tax Law. Taxpayers are required to apply the methods to pricing are:
a) Comparable Uncontrolled Price (CUP) method;
b) Resale Price Method (RPM);
c) Cost Plus Method (CPM);
d) Profit Split Method (PSM); or
e) Transactional Net Margin Method (TNMM).

c. Format of Transfer Pricing Documentation

PER-43/PJ/2010 requires that a taxpayer must be present the transfer pricing documentation consist of a minimum:
a) Overview of the company such as group structure, organization chart, shareholding structure, business operations, list of competitors and description of business environment;
b) Price policy and/or and cost allocation policy;
c) Comparability analysis (i.e. the five comparability factors);
d) List of selected comparables; and
e) Application of the selected method.

As long as these minimum requirement, the specific format and contents of the transfer pricing documentation may be determined by the taxpayer.

d. Transfer Pricing Adjustments by the DGT

In PER-43/PJ/2010 states that the DGT has the authority to re-determine the amount of related party income and deductible expenses in calculating the taxable income of a taxpayer. The DGT adjustments may be based on the taxpayer’s own transfer pricing method and documentation. If the taxpayer’s documentation is insufficient, the DGT will conduct its own analysis to re-determine the related party income and/or expense amounts.
If there are evidences of a tax crime, then the DGT may perform an investigation as outlined in Article 44 Law No. 16 Year 2009 about tax administration law.

e. Correlative Adjustments

The DGT has the authority to make correlative adjustments to a taxpayer’s income as a follow up to a primary transfer pricing adjustment made by the DGT or an overseas tax authority to the income of one of the taxpayer’s related parties. In this regulation does not provide detailed guidance on the process that taxpayers must follow to seek such a correlative adjustment.
(c)taxlearning.blogspot.com

Medium Tax-Service Office (KPP) Jakarta Central targets 95% Taxpayer Compliance

2011-05-03T09:22:00.001+07:00

Jakarta, 21/04/2011 MoF (Fiscal) News – Medium Tax-Service Office (KPP) Jakarta Central targets 95% taxpayer compliance up to 95 percent of its annual revenue by 2011. This was conveyed by Head of Service Division Medium KPP Jakarta Central Iwan Hendrawan in his office on Thursday (04/21).

Medium KPP Jakarta Central manages 1023 taxpayers, where the submission of the Tax Return (SPT) for Corporate which will expire on April 30, 2011. "There are 90 companies have returned SPT," said Iwan. The submission of corporate SPT seemed more complicated than personal. However, Iwan explained that it is because there is an audit of the financial management that needs to be managed properly. "Audit can be a delay or wait for the audit process," he explained. Usually, continued Iwan, the Corporate SPT will be submitted in the last minute.

Each year, taxpayers in Medium KPP Jakarta Central have increased. "This year is 1023, while last year was 1009," explained Iwan. In past few years, tax compliance level is at 95 percent. During the first quarter, Medium KPP Jakarta Central has reached 25% of the target. Hopefully, by the end of April next, it can be achieved up to 100%. "We expect 100% at the end of April," hoped Iwan.

According to Iwan, the employees at Medium KPP Jakarta Central strive to provide excellent service. "At the break time, we continue to serve, because we want to serve at any time," he explained. He affirmed that, amidst the input and criticism of community, the employees serve optimally.

Source: www.depkeu.go.id

The Explanation of Directorate General of Customs and Excise Problem Hollywood Movies

2011-02-22T12:35:00.002+07:00

Jakarta - Hollywood threatened to decide to stop distributing their film production in Indonesia following a tax increase for foreign movies. However, the Directorate General of Customs and Excise said there was no increase in import duty import of foreign films. Here goes the explanation.

Directorate General of Customs and Excise (DGCE) held a news conference at his office, Jalan Ahmad Yani, Rawamangun, East Jakarta, Monday (02/21/2011). Technical Director of Customs Directorate General of Customs Heri Kristiono said, had been the importer of foreign films in the country not enter the amount of royalties to the custom value.

1. There are no new policies or regulations of foreign movies because of the additional royalties to the value is in conformity with the WTO Customs Valuation Agreement has been ratified by the Constitution No. 7 of 1994 and in-Adopt the Law No. 10 of 1995 amended by No. 17/2006 concerning Customs governing provisions of the Customs Value.

2. There was no increase in import tariffs, imported films classified under HS Code 3706 with the imposition of tariffs of 10%, 10% import VAT and Income Tax section 22 imports 2.5%

3. DGCE do a re-assessment based on the reference as follows:

* Following the meeting of tariff harmonization of inter-departmental team on February 11, 2010 at the Center for State Revenue Policy BKF, led a meeting of the National Film Advisory Board (BP2N) with the Head of BKF, BKF meeting stated that the problem is the calculation of customs value for imported film is only based on price printed copy of the film, not including royalties and profit sharing rights.

* Letter of the National Film Advisory Board (BP2) to the Customs General Recruited 282/BP2N/III/2010 number dated March 26, 2010 concerning the application for determination of customs value of imported films in accordance with fair value, arguing that:
A. Taxes levied against the movie industry has been higher than imported films.
B. Based on data from the website Box Office Mojo Film, the circulation of some foreign movies which paid the producer (52 titles) film for the period April 2009 till February 2010 has resulted in nearly $ 60 million or equivalent to Rp ± 570 billion (exchange rate = IDR 9500 / 1 USD.)

* Letter of the Directorate General of Foreign Trade to the Chairman BP2N 121/DAGLU/4/2010 number dated April 12, 2010 which states that there are factors unique film containing intellectual property rights so that the determination of customs value not just use the standard flat metric Average per-movie (USD 0.43 / m).

* Letter from BKF to BP2N number S-320/KF/2010 dated June 17, 2010 regarding the Fiscal Incentives for the National Film industry and Determination of Customs Value of Imported Films that essentially contains the determination of customs value of goods imports Film is the implementation of Law No. 17 of 2006 of Customs is not the policy.

4. DGCE do a re-assessment in accordance with Law 10 of 1995 amended by No. 17/2006 on customs affairs, in which income producers of imported goods in accordance bill adheres to the principles of self assessment. Based on these principles DGCE authorized to conduct testing of the notification referred. In the Notice of Customs, the importer only inform the cost of printing copies of the film without entering a royalty to the customs value, so DGCE add it to the calculation of customs value as required.

5. On February 18, 2011 made between DGCE meeting with MPA and Film Producers (among others: 21th Century, Walt Disney, Time Warner, Sony Pictures) to discuss problems of the customs value of imported films, the meeting asked the MPA DGCE and Producer intended to convey written things that concern them to the Director-General and until now has not received DGCE.

Translate from: Tax Learning - Tax News

Who's Propose Film Import Tax Lifted?

2011-02-21T08:40:00.001+07:00

Jakarta - Who proposed the foreign film tax is raised? Apparently, the proposal came from President Susilo Bambang Yudhoyono (SBY). The reason, SBY wants to promote the national film industry.

"It's began when I talked with Mr. President the day before the cabinet meeting last year about the development of national film," said Minister of Culture and Tourism Jero Wacik.

It said in a press conference on National Film Policy and Film Import Tax Issues in the Ministry of Culture and Tourism, Jl Medan Merdeka Barat, Central Jakarta, Sunday (20/02/2011).

According to Wacik, SBY see the film industry began to show the rise in the last six years. This is evident from the large number of national films produced each year.

"The President then read the complaint Hanung Bramantiyo who complained about the high cost of filmmaking in Indonesia," he explained.

In writing young Sines, further Wacik, One cost to filmmakers is the value added tax of 10 percent that make the national movie industry lost to foreign movies.

"Please set all, including taxation,"said Jero Wacik imitate speech the President at a Cabinet meeting late last year.

Received orders from SBY, the Ministry of Culture and Tourism together with the Ministry of Finance set of rules designed to protect the local film industry.

"In the draft, the government plans to release the film production tax and raise taxes for foreign movies, so that national films and imported films could compete," says Jero.

The plan, the rules were originally to be issued in late March this year. "The Ministry of Finance was suddenly issued rules for foreign movies before the package is complete," he said.

Based on data collected the data detikcom about the production and screening of films in theaters, local movie of 2007 amounted to 54 titles and 205 titles of foreign films, in 2008 amounted to 91 local film titles and 144 titles of foreign films, in 2009 there were 83 local film titles and 156 titles foreign films, and in 2010 there were 70 local film titles and 249 titles of foreign films.

Translate from: detikcom

Tax for Imported & Local Movies are still being Evaluated

2011-02-21T08:36:00.001+07:00

Metrotvnews.com, Jakarta: The Minister of Culture and Tourism, Jero Wacik, held a press conference due to the ruckus caused by the new customs for imported and local movies. The event was also attended by the country’s foremost figures in the movie business, such as Deddy Mizwar, Tio Pakusadewo, and Slamet Raharjo.

The Minister of Culture and Tourism, in his press conference in Jakarta (20/02/2011) said that the customs for imported and local movies are still in discussion and evaluation.

They planned to make the tax for local movie production be reduced to zero percent. The same thing goes for imported goods used in the production of local movies. It was agreed before, but there’s still no final word on it.

To this moment, the Ministry of Culture and Tourism is still discussing the appropriate tax for imported movies. Jero Wacik asked the people to remain calm because his side of the system don’t want to eliminate imported movies and its importer.

According to Jero Wacik, the Ministry of Culture and Tourism, the Minister of Monetary, the Minister of Economy, the Directorate General of Taxes, as well as the Directorate General of Customs and Excise will conduct a meeting. The final decision will be given at early March.

Meanwhile, concerning the circulated letter of the Directorate General of Taxes, released on January 10^th, 2011, Jero Wacik will make an evaluation. The letter was indeed circulated, but there was no previous agreement on it

The Minister of Culture and Tourism stressed that that the circulated letter didn’t mention anything about the sum of the tax. It only notified the importers to pay the tax according to the rule.

Tranlate from: Metrotvnews.com

Five More Tax Officials Discharged over Gayus Case

2011-01-25T08:49:00.000+07:00

JAKARTA, KOMPAS.com - Finance Minister Agus Martowardojo said he had removed five officials from their posts over indications of involvement in the corruption case of convicted former tax official Gayus Tambunan.

"Last Friday we removed from their posts five third- echelon officials in the finance ministry suspected of involvement in the Gayus case," he said after attending a limited coordination meeting on legal issues at the office of the vice president here on Monday.

Agus said the officials were believed to be involved in the case and had been immediately removed from their posts and examined by the ministry’s inspectorate general. He said the officials had been given administrative sanctions since Friday.

"They are an addition to the number of tax officials who were discharged in the period March-June 2010 when the Gayus case first broke," he said.

Asked if former director general of taxation Mochamad Tjiptardjo was one of them, Agus said he was not.

"The director general was not one of them. He is one of the first-echelon officials subject to our reform program," he said.

He said there had indeed been replacements of first-echelon officials over the weekend including Mochamad Tjiptardjo by Fuad Rahmany.

"So we will give time to the new director general to conduct consolidation so that he can make plans and programs to be carried out," he said.

Source: kompas.com

Tax Obligation for Expatriate

2011-01-14T08:38:00.002+07:00

Legal Basis:

Law Number 16 Year 2009 The Fourth Amandement to Law Number 6 Year 1983 (General Provisions and Taxation Procedures Law).
Law Number 36 Year 2008 The Fourth Amandement to Law Number 36 Year 2008 (Income Tax Law).
Director General of Taxation Regulation Number PER-9/PJ/2008 as amended by Director General of Taxation Regulation Number PER-35/PJ/2009.

The Rules:

According to provisions of Article 2 paragraf (3) letter a Income Tax Law: individual who resides in Indonesia, an individual who has been present in Indonesia for more than 183 days within any 12 months period, or an individual who has been residing in Indonesia within a particular taxable year and intends to reside in Indonesia.
According to provisions of Article 2 paragraph (1) General Prosedures and Provision Tax: Any taxpayer fulfilling subjective and objective requirements in accordance with provisions of taxation legislation shall register with the office of the Directorate General of Taxation whose jurisdiction covers the residence or domicile of the taxpayer and accordingly, he/she is given a taxpayer code number (TIN (Tax Identification Number)/NPWP).
In the elucidation of this paragraph said that: The subjective requirements are requirements in accordance with the provisions on tax subjects in the 1984 Income Tax Law and its amendments. This means that we are referring to the provisions of Article 2 paragraph (3) letter a the Income Tax Law.
According to provisions of Article 3 paragraph (1) General Prosedures and Provision Tax: Any taxpayer shall fill a tax return properly, completely and clearly in Indonesia language by using Latin letters, Arabic numbers, the rupiah currency, and sign and submit it to the office of the Directorate General of Taxation where the taxpayer is registered or validated or other places stipulated by the Director General of Taxation.
According to the provisions of Article 3 PER-9/PJ/2008 stated that: The place of registration and or place of business reporting to be confirmed as Taxable Entrepreneurs for new taxpayers and taxpayers other than those referred to in Article 1 number 1 is the tax office whose jurisdiction covers residence or domicile taxpayers.

So tax treatments for Expatriates is:

The Expatriates have the intention to stay in Indonesia for more than 183 days within 12 months. It can be seen from the plan to be in Indonesia for 6 months and can also be seen from the Permit. Thus, under the provisions of Article 2 paragraph (3) General Provisions and Taxation Procedures Law, The expatriates are obliged to register to get TIN.
If the Tax Payer is already can be categorized as Resident Taxpayer pursuant to Article 2 paragraph (3) General Provisions and Taxation Procedures Law, then to the expatriates, the company as an employer have to cut the income tax law of Article 21 of the income is paid to the expatriates (the calculation is in accordance with the provisions of Director General of Taxation Regulation PER-31/PJ/2009 as amended by PER-57/PJ/2009).
If the expatriate already have a TIN, then at the end of the year, this Expatriates must fulfill the obligation to report annual tax return of Personal Income Tax.
In its Annual report on the tax return, these expatriates have to report all income received in Indonesia and from abroad, while the tax credits that have been withheld or paid in Foreign Affairs on the reporting of income can be credited in the annual tax returns by using crediting method according to the provisions of Article 24 of the Income Tax Act.
If the future expatriates will leave Indonesia forever, he or she can submit a request letter to revoke his/her TIN (the process of deregistration).

Indonesia Studying Tax Incentives for Islamic Finance

2010-12-03T15:59:00.001+07:00

Oct. 20, 2010 (Bloomberg) -- Indonesia, the world’s most populous Muslim nation, is studying ways to make tax laws more conducive to developing Islamic finance, Mulya Siregar, director of Shariah banking at the central bank, said in Jakarta.

“Experience in countries which have successfully developed Shariah banking shows that tax incentives are very helpful in expanding the industry,” he told reporters. The study may be completed by the end of this year, said Siregar, declining to provide more details.

Indonesia is stepping up measures to catch up with Malaysia, the biggest market for sukuk, or debt that pays asset returns to comply with the religion’s ban on interest. Shariah-compliant assets held by financial institutions rose 43 percent to 85.9 trillion rupiah ($9.6 billion) at the end of September, from a year earlier, Siregar said. The government estimates the figure will rise to 97 trillion rupiah by year-end, he said.

Islamic banking assets in Indonesia totaled 75 trillion rupiah at the end of last year, about 2.9 percent of the total, Siregar said in August. That compares with Malaysia’s 337.6 billion ringgit ($109 billion), accounting for 20 percent of the country’s total, according to Bank Negara Malaysia’s website.

Infant Industry

Indonesia needs to do more to bolster investment in Islamic banking, said Ventje Rahardjo, president director of Jakarta- based PT Bank Syariah BRI, a unit of Indonesia’s second-largest lender by assets.

“We have been asked by the government to share our views” on this issue, Rahardjo told reporters. “We are discussing what types of things might help Shariah banks to compete with conventional banks because our Islamic finance industry is still in its infancy.”

Malaysia’s Prime Minister Najib Razak said on Oct. 15 the country plans to cut taxes on certain types of Shariah-compliant transactions to promote innovation in the industry that has total assets of $1 trillion. The government also announced plans last week to start selling Islamic bonds to individual investors

In the past year, Malaysia has also issued permits to global investors including Aberdeen Asset Management Plc and Franklin Templeton Investments to start Islamic fund management businesses.

Source: businessweek.com

Tax office gets green light to probe Bumi Resources case

2010-11-16T11:45:00.000+07:00

The Directorate General of Taxation will go ahead with its investigation of alleged tax irregularities involving PT Bumi Resources after the Tax Court on Wednesday rejected a complaint from the company’s finance director on the legality of the investigation.

Judge Hari Utomo, who led the court proceedings, said that the directorate general had not violated any rules in investigating the case as had been alleged by Eddie J. Soebari, the energy company’s finance director.

“He filed a lawsuit against us by saying that we had carried out the investigation without providing any notification or even a letter of investigation order,” Head of Jakarta Tax Office Riza Noor Karim said.

The investigation would be carried out on the grounds that it could lead to recovery of possibly unpaid taxes that might be worth millions of dollars, Riza said.

The case first emerged when the directorate announced last year it had been investigating possible tax evasion involving three mining companies, PT Bumi Resources, PT Arutmin Indonesia and PT Kaltim Prima Coal (KPC). All three companies have ties with Golkar Party chairman Aburizal Bakrie.

The combined value of the possibly unpaid taxes is estimated to be worth Rp 2.1 trillion, the tax office said. In March 2009, KPC filed a complaint with the Jakarta tax tribunal after it received a letter from the tax office saying the company was under investigation. KPC said the investigation was not complying with procedures.

The tax tribunal ruled in favor of KPC and ordered the tax office to stop the investigation. The justices ruled that the tax office was no longer allowed to investigate the alleged withholding of tax by KPC.

Objection and appeal director at the taxation directorate general Catur Rini Widosari said that the potential financial loss tied to Bumi could be bigger than initially expected, given the increase in the evidence available.

“Yet, we cannot mention the potential loss. The figures may vary. So, it would be better for us to
wait until the investigation is completed,” she said, adding that the taxation directorate general had no deadline to follow in carrying out the investigation.

Indonesia Corruption Watch (ICW) in a report issued earlier this year claimed that Bumi had failed to pay taxes and royalties worth up to $620 million.

Head of tax billing and investigation division at the taxation directorate general Erizal said that during the investigation, his institution was still cooperating with the national police. “But the authority to investigate the alleged tax evasion remains with us,” he said.

Eddie’s lawyer, Rana Sanjaya, refused to make comments on the verdict.

“We will discuss it. We may appeal, but I don’t want to give you any comments,” he said.

Source: thejakartapost.com

Indonesia raises Rp 485t in tax revenue

2010-11-16T11:40:00.000+07:00

The Directorate General of Taxation announced that income revenue as of Oct 31 reached Rp 485.1 trillion (US$54.8 billion), a 13 percent increase from the same period last year.

“The taxation revenue has attained 73.3 percent of the target in the 2010 revised state budget,” Directorate General of Taxation M Iqbal Alamsyah said in a statement published Thursday.

He said the government targeted to reap a total of Rp 661.5 trillion from taxes this year.

He said the government raised Rp 442.9 trillion from non-oil-and-gas income tax. “Non- oil and-gas- income tax has grown 14 percent as of October. It just netted Rp 385.8 trillion in the same period of last year,” Iqbal said.

Based on the recent data, non-oil-and-gas income tax comprised Rp 240.6 trillion from value added tax, Rp 171.5 trillion from luxury tax, Rp 27.9 trillion from land and building acquisition tax and urban and rural land and building tax and Rp 2.8 trillion from other taxes.

Source: thejakartapost.com

Tax office promises to listen to taxpayers’ complaints

2010-11-16T11:35:00.000+07:00

The Directorate General of Taxation is encouraging taxpayers to file complaints with the office if they feel that officials may have miscalculated their tax payments.

The head of the number two sub-directorate of appeals and lawsuits at the tax office, Jon Suryayuda
Soedarso, said Friday that filing objections was the right of every taxpayer as stipulated in the 2007 Taxation Law.

He promised to listen to complaints and settle cases amicably.

“If a taxpayer has a different opinion about a tax calculation, they may file objections with the tax office,” he said, adding that the office would follow up the objections in accordance to prevailing regulations.

The tax office claims the number of objections filed had steadily declined in the past three years from 20,000 in 2008 and 13,000 in 2009 to only 6,500 in the first nine months of this year.

After reviewing the complaints, Jon added, the tax office would recalculate the tax. If taxpayers were still unhappy with the decision, they could file an appeal with the tax court.

He said taxpayers could object not only about the amount of their tax, but also about auditing
procedures.

“If taxpayers feel our auditing procedures don’t comply with the prevailing law, they could also file objections,” he emphasized.

The tax office claims the number of appeals filed by taxpayers with the tax court also decreased in the past three years from 3,000 in 2008 and 2,900 last year to 2,700 in the first nine months of this year.

“In 2008, the court settled 2350 cases, in 2009, 2800 cases and 1953 cases in the first nine months of this year. The court upheld our original tax calculations in only 40 percent of the cases,” Jon said, adding that his office lost most of the cases due to improper tax calculations and auditing procedures, not due to illicit deals between taxpayers and tax officers as many critics have claimed.

The head of the number one sub-directorate of appeals and lawsuits, Max Darmawan, said that it was almost impossible for illicit deals to manipulate the decision of the tax court to take place because the tax office had tightened its supervision of all appeal officials.

“After the tax evasion case involving former official Gayus Tambunan broke to the public, we evaluated our system and fixed loopholes,” he said. Gayus was an appeals official who handled appeals from several large Indonesian companies.

To stop incidents of graft, Max said, the tax office limited contact between taxpayers and appeals officials; the two could only meet in plenary sessions.

However, he admitted that the office could not monitor officials outside their work hours.

Jon said that if taxpayers still disagreed with the decision of the tax court, another legal avenue for them to defend their rights was to file a case review request with the Supreme Court.

Source: thejakartapost.com

30 Retailers serve tax refund facility starting today

2010-10-04T09:22:00.002+07:00

The Directorate General of Taxes add 22 retail stores that participate in the provision of refund of VAT (tax refund) to foreign tourists.

The provision is contained in Decree No. DGT. 34/PJ/2010 about Appointment of Retail Stores, signed on 6 September 2010. This Decree are effective today.

Business Process Transformation Director Directorate General of Taxation, Robert Pakpahan, said the addition of retail stores is done considering the positive response from the tourists and retail shops on the implementation of tax refund policy that became effective from 1 April.

"The VAT refund facility for foreign tourists has received positive response from the tourists and retail stores," he said as quoted by the Business release received today.

On 1 April 2010, the Directorate General of Taxation has appointed eight retail stores participating in the program. With the addition of retail stores participating in the provision of tax refund from today, the number of stores grew to 30 stores.

Retail stores participating in this program are required to put the logo 'VAT Refund FOR TOURISTS'. Until now, only two international airports of Soekarno Hatta Airport in Jakarta and Denpasar, Bali's Ngurah Rai airport serving this VAT refund.

Retail stores in Jakarta who has been involved in providing facilities tax refund, PT Pasaraya Blok M, Sarinah Thamrin, Metro Pondok Indah Mall, Metro Plaza Senayan, Batik Keris Citraland , Batik Keris Menteng, Batik Keris Pondok Indah Mall 2, and Batik Keris Karawaci Supermal .

In addition, Batik Keris Pacific Place, Keris Dept. Store Menteng, Keris Dept. Store Mal Puri Indah, Jean Paul Gaultier Plaza Indonesia, Plaza Indonesia Loubountin Chistian, Club Monaco Plaza Indonesia, Sogo Plaza Senayan, Sogo Kelapa Gading, Sogo Pondok Indah Mall , Sogo Emporium Pluit , Seibu Grand Indonesia, and Indonesian Square Grand Indonesia.

Meanwhile, retail stores are located in Batik Keris Bali Discovery Shopping Mall, Batik Keris Ngurah Rai Airport, Sogo Bali Collection, Sogo Discovery Shopping Mall, the Square Indonesia Nusa Dua, UC Silver Batubulan Gianyar, Mayang Bali Kuta Square, the South Atlas Sea Pearl Shops Sanur, Dewis Sukawati Gianyar, and Windu Sari Batubulan Herzliya.

Translate from: http://updatetaxnews.blogspot.com/2010/10/30-peritel-layani-fasilitas-tax-refund.html

Tax revenue target unrealistic: Observers

2010-08-19T14:58:00.001+07:00

The government’s goal to increase the tax revenue by 14.5 percent, or Rp 106.26 trillion, next year to Rp 839.5 trillion (US$93.18 billion) will be tough without extra efforts, experts said.

The 2011 draft state budget delivered by President Susilo Bambang Yudhoyono in the annual state of the nation address at the House of Representatives and Regional Representatives Council on Monday, projects total tax revenues of Rp 839.5 trillion, or 77 percent from the overall state revenue.

“The target is only possible if the government focuses on intensification of tax income from several specific sectors as well as the extensification of individual taxes,” University of Indonesia’s tax observer Darussalam told The Jakarta Post on Wednesday.

Darussalam said tax income from oil and gas, mining, agricultural and forestry sectors needed to be pushed in order to meet the target, as the sectors were under-enforced potential tax contributors.

“The government also needs to increase the number of individual tax payers. Tax income in developed countries is dominated by individual taxes. But here, corporate taxes are a lot more than individual ones,” he said.

Chamber of Commerce vice chairman of Trade, Distribution and Logistics Division, Benny Soetrisno, said the tax revenue target could be achieved only if the government increased the tax coverage on business sectors. He said many companies, even those who have business permits, did not pay tax. “Many businesses did not have tax identification numbers although they had acquired their business licenses. That’s where the government should focus on,” he said.

Experts are also concerned about weak 2010 tax revenues. Former finance minister Sri Mulyani Indrawati in March revised the government’s target for this year’s tax revenue to Rp 733.24 trillion, Rp 9.5 trillion lower than the previous target at Rp 742.74 trillion in the original 2010 state budget.

The revised figure in the revised 2010 state budget is 75.22 percent of the estimated total state revenue of Rp 974.82 trillion.

Sri Mulyani said the downward revision was due to a lower tax base resulting from a below-target revenue in 2009.

Taxation revenue comprises of the funds collected by the Finance Ministry’s Directorate General of Taxation and Directorate General of Customs and Excise.

In his address, Yudhoyono also mentioned a target to increase the tax-to-GDP ratio by 0.1 percent in 2011.

“The tax ratio will increase from 11.9 percent in the 2010 state budget to 12 percent in 2011,” Yudhoyono said.

Finance Minister Agus Martowardojo quickly responded to the target, saying that the government must work hard to achieve the target.

“The GDP continues to grow. In early 2010, our GDP was about Rp 5,000 trillion. Up to June, it grew to about Rp 6,000 trillion. Therefore the percentage [tax ratio] automatically slides.

“So 12 percent will be a very hard work,” he said. (est)

Source: TheJakartaPost.com

Big tax payers have Rp 1.2 trillion in arrears

2010-08-19T14:54:00.000+07:00

Big tax payers have not paid Rp 1.2 trillion (US$133 million) in financial obligations to the state as of July this year.

Head of the Large Tax Office (LTO) Mekar Satria Utama identified the tax payers as companies in the mining, banking, telecommunication, processing industry, heavy equipment trade and automotive distribution sectors.

The mining industry is the largest tax payer, contributing 40 percent to state tax revenue, followed by the banking sector at 23 percent.

“We originally set a target of examining and cashing in Rp 953 billion of tax arrears, but we have reached 128 percent of the target and expect to exceed 200 percent of the mark by the end of the year,” Mekar said as quoted by Antara on Wednesday.

He said the LTO had met one half of the tax revenue target of Rp 661 trillion set in the 2010 state budget.

There are 199 large tax offices among about 700 tax offices across the country.

Source: TheJakartaPost.com

Dozens of tax agents ready to chase 'naughty businessmen'

2010-08-19T14:51:00.001+07:00

The country's tax office has trained dozens of tax agents to chase 'naughty businessmen' who park their fund overseas.

"We have trained 15 tax officials," tax director general Mochamad Tjiptardjo said as quoted by tempointeraktif.com on Wednesday.

The Tax Office would assign those officials to tax haven countries like Singapore, Hong Kong as they offered taxes to businessmen lower than those at home.

"We hope we can realize our plan next year," Tjiptardjo said.

Source: TheJakartaPost.com

President Says Indonesia to Boost 2011 Infrastructure Spending

2010-08-19T14:45:00.000+07:00

Jakarta. Indonesia may increase capital spending by 28 percent next year as the government aims to build more bridges and roads to boost growth in Southeast Asia’s biggest economy, President Susilo Bambang Yudhoyono said.

The economy may expand 6.3 percent next year from 6 percent this year, Yudhoyono told the House of Representatives in Jakarta. Capital spending in the 2011 state budget may rise by Rp 26.6 trillion rupiah ($2.96 billion) to Rp 121.7 trillion next year, he said in his speech.

“The increase is the highest compared with those of other expenditures,” Yudhoyono said. “This step, along with steps to improve the budget absorption, will hopefully overcome the various problems and obstacles that have hampered infrastructure development.”

Yudhoyono has pledged to double spending on infrastructure to $140 billion during his second and final five-year term to deliver average growth of 6.6 percent. During his first term, 125 kilometers of toll roads were built, compared with China’s 4,719 kilometers of toll roads last year alone.

“As long as our infrastructure remains underdeveloped the economy cannot expand beyond 6.5 percent without the risk of overheating,” said David E. Sumual, an economist at PT Bank Central Asia. “The government doesn’t have much of a choice but to increase its deficit spending.”

New roads, seaports, and bridges may improve distribution of goods in the world’s biggest archipelago. Indonesia is the world’s largest exporter of power-station coal and the second- biggest exporter of palm oil. Better access may reduce the cost of distribution, helping keep inflation and interest rates low.

A higher infrastructure budget will help build, among other things, 14 new airports, 85.06 kilometers of railways and improve the capacity of 2,613 kilometers of roads, Yudhoyono said.

The government plans to reduce the state budget deficit next year to 1.7 percent of gross domestic product from 2.1 percent of GDP assumed in the 2010 budget, Yudhoyono said.

Finance Minister Agus Martowardojo said on July 26 the budget deficit may be 1.5 percent of GDP this year.

A higher infrastructure budget will help build among other things 14 new airports, 85.06 kilometers of railways and improve the capacity of 2,613 kilometers of roads, Yudhoyono said.

The 2011 state budget draft assumes an inflation rate of 5.3 percent, Yudhoyono said. That compares with a central bank forecast of 4 percent to 6 percent this year. Other assumptions in next year’s budget draft include an oil production rate of 970,000 barrels a day and an average crude oil price of $80 a barrel.

Tax revenue may rise 13 percent to 839.5 trillion rupiah next year, Yudhoyono said. The government also plans to increase the salaries of civil servants, the military and the police by 10 percent next year, he said. It plans to cut subsidy spending by 16.5 trillion rupiah to 184.8 trillion rupiah, he said.

Bloomberg

BNI Shariah Unit Contests Tax Office’s Rp 400b Levy in Double-Taxation Row

2010-08-19T14:43:00.000+07:00

The Shariah unit of PT Bank Negara Indonesia, the nation’s fourth-largest bank, said it was in a dispute with the tax department over about Rp 400 billion ($44 million) of tax on Shariah financing.

BNI’s Shariah unit said last month that the government’s failure to address a key double-taxation issue for Islamic financing could potentially wipe out the funds in the country’s fledgling Shariah banking industry.

Rizqullah, vice president and head of projects at BNI’s Shariah unit, said last month that a law passed by the House of Representatives last year to remove double taxation for Islamic banks was not retroactive and could ruin the industry.

BNI’s Shariah unit has about Rp 400 billion of unpaid tax from the 2007 tax year, Rizqullah said last week, adding that the bank would not pay that charge because murabaha , or Islamic trade finance, transactions should be treated just like any other financing by conventional banks.

“We will file an appeal over the unpaid tax charged by the tax office,” said Ahmad Baiquni, a BNI director in charge of Shariah. “The board of directors has decided to file the appeal and go through all the process.”

Other banks that have Shariah units said they did not have such big exposure.

Under a murabaha scheme, a Shariah bank may extend financing, for example, for a motorcycle, by technically buying the motorcycle and selling it to the bank customer for a profit, as Shariah laws ban the payment of interest in such transactions. Islamic banks have argued that the purchase and subsequent sale should be treated as a single transaction for tax purposes and only taxed once, as in other countries with advanced Islamic markets.

Rizqullah said almost 70 percent of financing by Islamic lenders was done under the murabaha scheme.

The new law, which comes into effect in April, addresses the double-taxation issue but is not retroactive.

PT Bank Bukopin Syariah, which turned into a full Shariah bank last year, is in a dispute with the tax department over unpaid tax of less than Rp 100 billion, its president director Riyanto said. The unpaid tax was for the 2008 tax year, when it was still a Shariah unit of midsized lender PT Bank Bukopin.

PT Bank Syariah Mandiri, the Shariah unit of Bank Mandiri, has resolved a tax issue for less than 100 million rupiah and no longer has a tax dispute related to Shariah financing, corporate secretary Ahmad Fauzi said.

PT Bank Muamalat, the second-largest Shariah lender, has no problem with its tax payment, including value-added tax for murabaha financing, corporate secretary Delyuzar Syamsi said.

PT Bank Mega Syariah, the fifth-largest Shariah lender, also has no problem with the tax office, president director Beny Witjaksono said.

The tax department declined to comment on how widespread the problem was regarding disputes over double taxation, but said it would proceed to collect the unpaid tax from BNI’s Shariah unit.

Reuters

Indonesian Central Bank Reviewing Shariah Lending Rules

2010-08-19T14:38:00.001+07:00

Jakarta. The central bank is considering easing restrictions on Islamic banks by allowing them to adjust loan terms and boost lending.

“Shariah banks have asked that loans that are still current be allowed to be restructured,” Mulya Siregar, director of Islamic banking at the central bank, said in an interview in Jakarta on Tuesday.

“We’re having intensive discussions and will make a decision by the fourth quarter at the latest.” Current regulations, issued in 2008, only permit terms to be altered once debt becomes non-performing, Mulya said.

Indonesia, home to 192 million Muslims, introduced a law two years ago allowing financial institutions to offer services that comply with Shariah principles, 25 years after Malaysia.

Islamic banking assets total $93 billion in Malaysia in 2009, or 20 percent of the total, compared with 2.9 percent in Indonesia, according to central bank data.

Islamic finance assets in Indonesia may increase 30 percent to Rp 97 trillion ($10.77 billion) by the end of 2010, up from Rp 75 trillion in 2009, Mulya said.

“Even with the late introduction of the laws, growth has been remarkable,” Mulya said. “We only had three Islamic banks in early 2008, now we have 10.” The 2008 law requires all lenders to spin off their Shariah divisions into separate units by 2023, he said.

Non-performing loans at Indonesia’s Islamic banks fell to 3.89 percent of total lending in June, down from 4.39 percent in the same month a year earlier, according to the central bank’s Web site.

That’s more than the 2.24 percent rate for troubled loans at secular commercial banks, down from 2.72 percent a year ago.

“Allowing banks to restructure early would help them focus on giving loans,” Teguh Hartanto, an analyst at state-owned Bahana Securities, said in an interview on Wednesday.

“Credit quality can deteriorate easily in a bad economic environment, forcing banks to curb lending as they have to maintain or even increase capital to support the higher NPL level.”

The non-performing loan rate could hit 4.7 percent if economic conditions deteriorate by 25 percent, the central bank said in a March report.

Indonesia needs to offer tax incentives to attract investors who don’t use religion as a basis for making investments in order to expand Islamic financial services, said Fauzi Ichsan, an economist at Standard Chartered.

“We have to understand that Indonesia is the world’s biggest Muslim country but its population is secular,” said Fauzi, whose bank gets most of its profit from emerging markets.

“Unless it has full government and parliamentary support, growth for Islamic finance in Indonesia may not be as smooth and large as Malaysia or some other Muslim countries.”

Banking that complies with the religion’s ban on interest is increasing at a rate of 15 percent annually, according to the Islamic Financial Services Board, making it the fastest-growing segment in the financial industry. Assets held by Islamic banks may climb to $1.6 trillion by 2012, IFSB and the Islamic Development Bank said in a report in April.

Bloomberg

How the Indonesian Taxman Gets Rich by Selling His Services to Corporate Tax Evaders

2010-08-19T14:32:00.000+07:00

Jakarta. How does a mid-raking civil servant manage to stash away a Rp 100 billion ($11.2 million) fortune? According to high-profile graft defendant Gayus Tambunan, it’s easy, provided you work as a corporate tax “fixer” at the state’s tax tribunal.

The former tax investigator said following his arrest in March on bribery and corruption charges that Indonesia’s corporate world was rife with companies and individuals looking to shirk their tax obligations. For officials at the tax tribunal, long considered one of Indonesia’s most corrupt bodies, it is a simple matter of cooking the books for a client and then charging a percentage on what has been saved.

The issue has been brought back to the fore after another graft suspect, Eddi Setiadi, who was arrested by the Corruption Eradication Commission (KPK), recently offered a new insight into this murky world of tax cheats when he told investigators that he had received Rp 200 million as an “annual payoff” from West Java-owned Bank Jabar Banten, in exchange for lowering its tax obligation by as much as Rp 40 billion a year.

“Tax officials manipulate data in exchange for a percentage of the amount of tax evaded by a company,” Yanuar Rizky, an independent financial analyst, told the Jakarta Globe. “Looking at Gayus’s wealth, you can estimate how much Gayus cost the state in terms of lost tax revenue.”

In the fallout from the Gayus case, the National Police arrested several tax “consultants” who allegedly channeled money to Gayus, and who are now awaiting trial at Jakarta district courts. The hearings of these consultants and of Gayus, who will be being tried at the South Jakarta District Court, are seen as key in helping authorities unravel how the so-called tax mafia operates.

The Indonesian Society for Transparency (MTI) is conducting research by interviewing taxpayers and officials from the Directorate General of Taxation inside the Finance Ministry.

In its preliminary findings, the watchdog concluded that a dire lack of transparency and supervision were driving corruption inside the tribunal.

“Because the hearings and rulings are never open to the public, it is impossible to go over them,” said Jamil Mubarok, one of the group’s researchers.

“We’ve found that court clerks can very easily manipulate a company’s tax returns. This happens often, and judges at the tribunal consistently ignore the fact that the hearings are manipulated.”

MTI’s executive director, Tirta Nugraha Mursitama, said that a major problem was that investigators looking into companies’ tax returns were not independent.

“Most of the time they’re former tax officials,” Tirta said. “And more than 90 percent of the judges at the tribunal are also retired tax officials. So the claimants, respondents and judges all know each other.”

Utama Kajo, from the Indonesian Chamber of Commerce and Industry, said the system may have been intentionally created and sustained this way by officials for the sole purpose of allowing corruption to thrive.

“Even if the courts rule that the tax office was incorrect in its calculations for the year, the tax office will just repeat the same mistake the next year. It is like an endless and costly cycle,” Utama told the Globe.

“Businesses grow tired of this because they are being fooled around with by tax officials year after year. Eventually they resort to bribery.”

Utama pointed to one company, which he refused to identify, that went bankrupt in 2007 but still received a tax bill for the 2008 financial year.

“The company filed a complaint with the tax tribunal and the tribunal later ruled the company did not have to pay taxes. The owner of the company thought the battle was over. Until 2009 comes, when the tax office again orders the company to pay taxes.”

Supreme Court Justice Imam Soebechi said the corruption stemmed from the tribunal’s peculiar position in the country’s legal system. The tribunal is administratively under the Ministry of Finance but structurally under the Supreme Court.

“There is a dispute over which institution has the right to monitor judges and the rulings that they end up making,” Imam told the Globe.

“According to the 2002 Law on Tax Tribunals, we have the power to monitor the judges. But the law also stipulates that the decision to sanction judges rests with the finance minister, with the consent of the Supreme Court.”

Tjip Ismail, the tribunal’s chairman, said the sheer volume of cases made monitoring the tax judges difficult.

“There are at least 18 new cases being heard each day and the judges are hearing anywhere from 15 to 20 cases daily. I don’t see how it is possible to monitor each and every decisions they make,” Tjip said.

Indonesia Corruption Watch’s deputy chairman, Emerson Yuntho, agreed the 2002 law needed to be strengthened if the government wanted to clean up the tribunal.

“The jurisdiction of the court is not clear and this is exploited by the tax mafia to inhibit tax collection,” Emerson told the Globe.

He highlighted a controversial decision issued by the tribunal last February to block the tax office from investigating mining company Kaltim Prima Coal.

“The only venue to challenge an investigation is the district court. An investigation is not among the type of tax dispute the tax tribunal is authorized to hear,” Emerson said.

After the Gayus case hit the headlines, then-Finance Minister Sri Mulyani Indrawati asked the KPK to verify the wealth of all 10,000 officials at the tax office. She also ordered an audit of the 134 tax cases that had been personally handled by Gayus.

Based on those forced asset declarations, police arrested the former director of tax investigations, Bahasyim Assifie, on charges of money laundering after finding more than Rp 66 billion in his bank account.

Source: TheJakartaGlobe.com

Indonesian Tax Official Gets 6.5 Years in Jail for Corruption

2010-08-19T14:30:00.000+07:00

Jakarta. The Anti-Corruption Court on Tuesday jailed unrepentant tax official Edi Setiadi for six-and-a-half years for his role in a Rp 81.43 billion ($8.9 million) tax evasion case involving a provincial government-owned bank in West Java between 2001 and 2002.

Edi, a former chief tax investigator at the West Java Tax Office in Bandung, manipulated the tax returns of lender PT Bank Jabar-Banten in exchange for Rp 2.55 billion in bribes, the court presided over by Judge Nina Indrawati ruled.

The court also instructed Edi to pay a fine of Rp 200 million. Edi faces an additional six months imprisonment for failing to pay the fine.

The Corruption Eradication Commission (KPK) previously said the tax fraud amounted to Rp 44.3 billion, but the court estimated that based on witness testimony the figure amounted to Rp 81.43 billion in state losses.

KPK prosecutors had sought 12 years imprisonment, alleging that in 2001, Bank Jabar was supposed to have paid Rp 129.2 billion in taxes, which Edi slashed to Rp 74 billion. In 2002, the lender owed the state Rp 51.8 billion, which Edi again reduced to Rp 25.57 billion, prosecutors said.

Judge Sofialdi, however, said in the verdict that the court viewed Edi’s actions as a single act of graft done repeatedly and not two separate instances of graft, as the prosecution had argued.

According to the Criminal Code, a defendant charged with two corruption offenses could face a combined sentence.

“The defendant had not admitted to his crime. The defendant had also marred the credibility of the taxation office and betrayed people’s trust towards the institution,” Sofialdi said.

Both sides have seven days to lodge an appeal with the Jakarta High Court.

“As much as I respect the court’s decision, I am not satisfied with the ruling and choose to lodge an appeal,” Edi told presiding Judge Nani after she delivered the guilty verdict.

Edi maintained that he had become a victim of a conspiracy to frame him by his former subordinates.

Lead prosecutor Rudi Margono said that they were also filing an appeal.

The KPK last month named four of Edi’s former subordinates suspects for conspiring in the crime. They include Roy Yuliandri, Dedy Suwardi, Muhammad Yazid and Dien Rajana Mulya.

Edi is alleged to have taken Rp 565 million from the Rp 2.55 billion kickback and given remainder to the four others.

The KPK has also named former Bank Jabar chief accountant Hery Achmad Buchori a suspect in the case.

Former Bank Jabar director Umar Syrifudin has already been convicted in the case and sentenced to seven years in prison.

Source: TheJakartaGlobe.com

Police play down KPC alleged tax bribery

2010-08-19T14:15:00.000+07:00

The National Police gave a lukewarm response to calls for an investigation following an allegation of a giant coal mining company’s bribing of tax officials.

The allegation was delivered in the testimony of defendant Gayus Tambunan, a former low-ranking tax officer, who said Tuesday he had received US$500,000 from PT Kaltim Prima Coal (KPC).

Head of public relations unit Sr. Comr. Marwoto Soeto said Wednesday the testimonies were not enough to trigger detectives to begin an investigation. “Still, it’s only a testimony [although it was presented before court]. We need supporting evidence,” he said.

Marwoto, however, vowed that police detectives would not ignore the testimony if also voiced by other witnesses and supported by evidence.

The KPC was one among companies mentioned by Gayus as the sources of his wealth. The latest finding showed that Gayus stored Rp 60 billion in cash in safety boxes, adding to the Rp 28 billion in his bank account.

Head of the National Police Center of Internal Monitoring, Brig. Gen. Budi Waseso said testimonies before the court were not necessarily the truth. “Everybody can produce words, but we need facts.”

National Police spokesman Insp. Gen. Edward Aritonang said the police had no plan to summon representatives from the companies that allegedly bribed Gayus. “There are already too many companies implicated in the case.”

Gayus became connected with the KPC, partly owned by the family of Golkar Party chairman Aburizal Bakrie, through middleman Alif Kuncoro.

Gayus’ role in helping Bakrie’s firms emerged in June when police documents containing Gayus’ testimonies during police questioning was leaked to the press.

Gayus testified to police that he had received money transfers from around 44 companies including three firms affiliated with Bakrie — PT Bumi Resources and its units KPC and PT Arutmin.

During a police questioning in early April, Gayus received US$500,000 from the KPC, $500,000 from Bumi and $2 million jointly from the KPC and Arutmin. Following the revelation, Finance Minister Agus Martowardojo gave the National Police approval to examine the tax returns of the implicated companies but no action has been made by the police.

A member of the National Police Commission, Adnan Pandu Pradja, urged the police to begin investigating the case instead of waiting for evidence.

In June, police detectives questioned Bumi’s vice president of finance Deny Adrian. Deny, who was close to Alif, reportedly met with Gayus several times at the Four Seasons and Ritz-Carlton hotels, and Dapur Sunda Restaurant in Jakarta, to discuss how to settle the company’s tax problems.

Brig. Gen. Yovianes Mahar, a director at the National Police detective body, however, said detectives had not found sufficient evidence to link Deny to the case. Alif now stands trial for bribing detective Comr. Arafat Enanie with a Harley Davidson bike.

His role as a middleman for several companies has been left untouched by the court. Bumi spokesman Dileep Srivastava has called the allegations baseless. “Bumi’s reporting has always been transparent, audited and publicized. Our tax status is clear,” he said.

Secretary-general of Transparency International Indonesia Teten Masduki said he was not sure the police would seriously investigate the companies due to Bakrie’s ownership. Aburizal is now head of President Susilo Bambang Yudhoyono’s joint secretariat of coalition parties.

Source: TheJakartaPost.com

The Stores was Registered as a "VAT Refund for Tourists" Participant

2010-04-15T15:30:00.002+07:00

The Stores was Registered as a "VAT Refund for Tourists" Participant

Nowadays, the retailer store that was registered as a "VAT Refund for Tourists" Participant that stated at Director General Tax of Republic of Indonesia Decree Number KEP-184/PJ/2010, is 8 (eight) stores. The stores is:
- Pasaraya, at Blok M, Jakarta
- Sarinah, at Jl. M.H. Thamrin, Jakarta
- Metro, at Pondok Indah Mal, Jakarta
- Metro, at Plaza Senayan, Jakarta
- Keris Gallery, at Terminal 2D Bandara Soekarno Hatta, Tangerang
- Batik Keris, at Discovery Shopping Mall, Bali
- UC Silver, at Batubulan, Gianyar, Bali
- Mayang Bali, at Kuta Square Blok A No. 12, Bali

What is the VAT Refund, who is eligible and how to claim the VAT refund can you read at here.

Value Added Tax (VAT) Refund for Tourist

2010-04-12T09:03:00.011+07:00

The Indonesian Government has provided a new tax facility for the international tourist that visit to Indonesia. This facility has provided for value added tax (VAT) refund if someone, who is international tourist (in here is called: Tourist), to claim back VAT on goods purchased in any store that registered as a "VAT Refund for Tourists" participant that located in Indonesia.

Who is eligible for a VAT refund?
Any foreign passport holder who is:

not an Indonesian citizen or not a Permanent Resident of Indonesia, who lives or stays in Indonesia no longer than 2 (two) months (calender month) since he/she arrived in Indonesia;
not a member of an airline crew.

How to claim the VAT refund?
Accompanied baggage (goods)
To be eligible for VAT refund:

Goods must be purchased from with "VAT Refund For Tourists" label across Indonesia by showing your passport, and you must have a valid tax invoice (a tax invoice attached with one payment receipt) from the shop.
Goods which are excluded are as follows: food, beverage, tobaccao products, guns and any explosive goods (materials), any goods that are prohibited to be taken onto an aircraft.
A minimum amount of Rp 500,000 (five hundred thousand rupiah) of VAT in one valid tax invoice from a shop with the same purchasing date.
Goods are purchased within 1 (one) month before departing Indonesia.

VAT refund payment options
VAT refund can be given in cash or by transfer payment.

Given in cash with Indonesian Rupiah (IDR) currency only if the amount does not exceed Rp 5,000,000 (five million rupiah);
Through transfer payment, when the VAT refund is in excess of Rp 5,000,000 (five million rupiah), the refund will be by transfer. The passenger should provide bank account number, account name, address, bank routing number, designated bank for transfer and requested currency for the VAT refund. The transfer will be done within 1 (one) month of receipt of application for VAT refund.

Exceptional Circumstances
If the amount of VAT refund is more than Rp 5,000,000 (five million rupiah), however, the passenger does not want to be refunded by transfer, then the amount of Rp 5,000,000 will be refunded in cash and the balance of VAT is not refundable.

Claim Procedure
The VAT refund can only be claimed at the airport on the date of the tourist that want to be claim the refund departure and must follow these steps:
Option #1: Claim VAT Refund before Flight Check-In counter
1.Submit the application for VAT refund to the Directorate General of Taxes (DGT) officer at the airport;
2.Submit both copies of the original valid tax invoice ( a tax invoice attached with one payment receipt);
3.Show passport, airline ticket and goods purchased;
4.Receive VAT refund in cash or through transfer to the Tourist's bank account;

Option #2: Claim VAT Refund after Flight Check-In Counter
The same steps are applied for this option, however, instead of showing airline ticket the Tourist need to show his/her international boarding pass to the DGT officer.
This option is applied for the passanger who carries on his/her purchased goods as hand baggage. If the goods are oversized or aviation security measures prevent he/she from taking his/her goods on board the aircraft, then he/she have to claim his/her VAT Refund at VAT Refund Counter before Flight Check-In counter as stated on option #1.

Attention:
To get a better service, please ensure that The Tourist allow enough time to complete his/her VAT Refund claims procedures on the day of his/her departure.

Where are the VAT Refund counters located?
VAT Refund counters are located before and after flight check-in counter in selected Indonesian international airport.
Currently VAT Refund Counters are available at Soekarno-Hatta International Airport (at Jakarta) and Ngurah Rai International Airport (at Bali).

This regulation is take effect at 1 April 2010.

With 58 Countries, Indonesia Counters Transfer Pricing

2009-12-16T11:25:00.001+07:00

JAKARTA - To stop tax avoidance by transfer pricing (price manipulation), the government has established an agreement with 58 countries. This was stated by the Director of Enlightenment, Services and Public Relations of the Directorate General for Taxation Djoko Slamet Surjoputro, after opening the Seminar on Taxation, at Borobudur Hotel, Wednesday, Jakarta.

"There is an agreement to prevent tax avoidance, it includes approximately 58 countries."

According to him, Indonesia can't stand alone when it comes to the taxation of multinational companies.

"We guard our own taxation, we have to ensure that we receive our rights. If not, it's like subsidizing wealthier countries; do we want that to happen?"

He admitted that some countries have asked for bilateral meetings to discuss this issue, some countries have even promised to submit the asset data of Indonesians living in those foreign countries. He believes that this agreement will be realized soon.

"Some countries have asked for bilateral meetings, and some have even promised the directorate general for taxation the asset data of Indonesians [living in those foreign countries]. So, soon everything will flow into motion." Djoko added that his institution also welcomes the G-20 statement to purge tax haven countries.

With the agreement between 58 countries, the tax income in the future is expected to rise. The reason is because transfer pricing has the potential hurt the state finance.

"There is the potential loss for the state finance due to transfer pricing. With this agreement, tax payers are expected to mend their ways and comply to the regulation."

Source: kompas.com

Deductibility of promotion and selling costs

2009-12-06T22:34:00.003+07:00

There is a change in the treatment of deductibility of promotion and selling costs in the application of the amendments to the Income Tax (Law Number 36 Year 2008), which took effect on January 1 2009.

Article 6 (1) a of Law Number 36 Year 2008 on Income Tax stipulates that:

the amount of taxable income for resident taxpayer and permanent establishment, shall be determined based on the gross income minus costs to obtain, collect, and maintain the income, including costs directly or indirectly related to business activity, among other things costs for promotion and sale that are stipulated in or based on a Minister of Finance Decree.

Compared to the previous Income Tax Law (Law Number 17 Year 2000), this Income Tax Law defines more specifically and clearly that the marketing and selling costs can be deducted from the gross income when determining the taxable income. However, there are certain criteria and a limitation on those deduction treatments which is further regulated by the minister of finance.

That limitation comes from the government wanting to more dynamic competition between bigger and smaller companies in certain areas of industry. Furthermore, the limitation is also being designed to ascertain deductibility on promotion and selling costs as well, and also to limit promotion and selling costs which could be deducted in large-scale industry becoming small and limited, compared to the one stipulated by the previous Income Tax Law.

In addition, on June 10 this year the minister of finance issued Decree Number 104/PMK.03/2009 concerning "Promotion and Sales Costs that Can be Deducted from Gross Income". In this regulation, promotion cost is defined as the cost incurred by a taxpayer to introduce, promote and/or encourage the use of a product, either directly or indirectly, to maintain and/or increase sales.

On the other hand, sales cost is the cost incurred by a taxpayer to distribute goods and/or services up to buyers and/or customers, either directly or indirectly, including packaging cost, warehouse/storage cost, security cost and insurance cost, as well as the other costs that are incurred in the process of delivering the product to the buyer and/or customers until the goods and/or services are received by buyers and/or customers.

The promotion costs and/or sales costs can be deducted from gross income provided that they meet these criteria:

The costs are incurred for the purpose of maintaining or increasing sales;

They are reasonable;

They are in line with normal and proper business practice;

They are In the form of goods, money, services, and facilities;
They are acceptable to other parties.

Furthermore, the cigarette and pharmaceutical industries are also required to provide a nominative list of promotion costs and/or sale costs paid to third parties.

The nominative list should at least contain the data of the recipient (name, addresses, taxpayer identification number and the amount of expenditure incurred). If the obligation to make the nominative list is not met, then the promotion cost and/or sale cost may not be deducted from gross income.

The following is the deductible amount of promotion cost for cigarette and pharmaceutical industry:

Type of Industry	Subject	Gross turnover	Deductible amount
Cigarette	• Producer; • Main distributor or • Sole importer	up to Rp500 million ($53 million)	Not more than 3% from revenue or maximum of Rp10 million
		> Rp500 million up to Rp5 billion	Not more than 2% from revenue or maximum of Rp30 million
		> Rp5 billion	Not more than 1% from revenue or maximum of Rp100 million
Pharmaceutical	• Producer; • Main distributor or • Sole importer	N/A	Not more than 2% from revenue or maximum of Rp25 million

If the promotion cost has been incurred either by a producer or main distributor, it will be the producer that has the right to charge the promotion cost. Furthermore, if such cigarette or pharmaceutical products are not produced in Indonesia then it will be the sole importer that has the right to charge the promotion cost.

If promotion is conducted by means of product samples, the amount of cost that can be deducted from gross income shall be as much as the cost of goods.

In the meantime, the procedures for charging and reporting the promo¬tion cost and/or sale cost are to be laid down in a regula¬tion by the director general of Taxation, which has not been yet issued. Moreover, the association of cigarette and pharmaceutical companies has lodged a protest against the limitations imposed on their companies because the new regulation will effectively increase the corporate income tax rate.

Source: www.internationaltaxreview.com

Controlled foreign corporation rules in Indonesia

2009-12-06T22:30:00.001+07:00

With the increasing global awareness of controlled foreign corporations, the Indonesian government has started to strengthen the rules governing them. The new income tax law (law no. 36 of 2008) includes provisions that set out ways to identify transactions between related parties in order to prevent transfer pricing.
One of the methods set out, among others, is stated under paragraphs (2) and (3) of article 18 of the income tax law. In addition, the Indonesian government has also amended the regulation governing deemed dividends on investments on unlisted offshore companies.
In a regulation issued by the Minister of finance in 1994 (Minister of Finance decree no. 650/KMK.04.1994) it is stipulated that deemed dividends on offshore investment are applicable for investments conducted in 32 countries on the condition that the investment is made on unlisted companies.
This regulation was revoked by Minister of Finance decree no.256/PMK.03/2008 dated December 31 2009 which took effect from January 1 2009 in order to strengthen the controlled foreign corporation rules.
The new regulation now expands the coverage of investments not only to 32 countries but worldwide. All the offshore investment by Indonesian taxpayers (except investment on offshore publicly listed companies) will be subject to this new regulation.
The regulation says that the dividend is deemed to be received by the Indonesian taxpayer on:
the fourth month after the deadline of submission of the annual corporate tax return of the offshore company for the respective tax year; or
the seventh month after the end of the financial year for those offshore companies that have no obligation to submit the annual corporate tax return or have no specific deadline for submitting the corporate tax return.
The Indonesian taxpayers that are subject to this decree are the taxpayers with the following conditions:
own at least 50% investment on that offshore company; or
jointly with other Indonesian taxpayers, own at least 50% investment in the offshore company.
The amount of the deemed dividend is based on proportion of the ownership on the profit after tax.
The Indonesian taxpayer then has to report this deemed dividend as taxable income and subject to 28% corporate tax. If the dividend has already been subjected to tax then the offshore tax is considered as a tax credit in Indonesia.

Source: www.internationaltaxreview.com

Should We Need The Tax Consultant?

2009-09-09T14:02:00.002+07:00

There are various reasons most taxpayers have had for not using tax consultant services. However, the new tax regulations concerning proxy affirm that those taxpayers may not have a lot of choices now.

The existence of skillful staff in taxation area is one of the basic reasons why majority corporate taxpayers do not use tax consultant services . Using these services means extra money to pay their service fee. Having competent staff, taxpayers simply optimize their staff in performing their company ’ s tax rights and obligations.

What happens now when the Regulation of Finance Minister No.22/PMK.03/2008 and the Circular of Director General of Taxes No.SE-16/PJ./2008 have been issued? The above so called cost efficiency strategy will no longer be fully carried out. These two regulations clearly limit such opportunity.

Flexibility of ‘Small’ Taxpayers

Based on the Regulation of Finance Minister No. 22/PMK.03/2008, a proxy can be either a consultant or a non consultant. Included in the category of non consultant are permanent employees/staff. In other words, a permanent employee/staff can still receive an authority from the employer as taxpayer to perform the employer ’ s tax rights and/or obligations. However, according to this regulation issued on 06 February 2008, the taxpayers who can give such authority to their employees/staff are only those categorized as ‘ small ’ taxpayers. The criteria of ‘ small ’ taxpayers are:

1· Individual Taxpayers of non entrepreneur/non independent personal service provider ;

2· Individual Taxpayers of entrepreneur/independent personal services provider with maximum gross business turnover/revenue of IDR 1,8 Billion / year ; or

3· Corporate Taxpayers with maximum gross business turnover of IDR 2,4 Billion/year .

As further regulated in the Circular of Director General of Taxes No. SE-16/PJ./2008, the non consultant category including employees eligible for being appointed as a proxy should meet these requirements:

a. Owning a Tax Identification Number (NPWP);

b. Having filled the Annual Income Tax Return of the latest tax year ;

c. Owning tax competency certificate (brevet) /formal education certificate in taxation for a minimum of Diploma III degree, issued by a state university/private university with A accreditation; and

d. Obtaining a special proxy letter from the Taxpayer giving the authority .

Limitation of ‘Large’ Taxpayers

As previously mentioned , based on the Regulation of Finance Minister No. 22/PMK.03/2008, corporate taxpayers with gross business turnover more than IDR 2,4 Billion/year and individual taxpayers with gross business turnover/revenue more than IDR 1,8 Billion/year categorized as ‘ large’ taxpayers are not allowed to give a proxy to their employees/staff. However, pursuant to the issuance of the Circular of Director General of Taxes No. SE-16/PJ./2008 on 10 March 2008, such limitation is lessened.

The said Circular states that “ directors, commissioners and majority or controlling shareholders including employees of a Taxpayer who actually have the authority to make policies and/or decisions in running the company may perform tax rights and/or obligations of the said taxpayer without any special proxy letter ” . Thus, it can be concluded that employees/staff having the authority in a company of a large taxpayer may automatically perform the company’s tax rights and/or obligations. The question is, how about the rest of employees who do not have such authority?

The Circular stipulates that specifically for the tax rights and/or obligations performed, taxpayers are allowed to assign their employees in the following :

1. Signing tax documents such as Tax Invoices and/or Tax Payment Slips, only with an Appointment Letter and not necessarily a Special Proxy Letter;

2. Submitting tax documents through tax offices, without a Special Proxy Letter/an Appointment Letter; and

3. Delivering and/or receiving tax documents, other than those submitted through tax offices, without an Appointment Letter.

Upon this Circular’s provision, the intricacy occurs when due to some reason the authorized persons in the company could not perform the company’s tax rights ad/or obligations (other than those three activities in the points mentioned above), large taxpayers will have no other choice than to use tax consultant services. They will have to pay a tax consultant just for giving the signature in their monthly tax returns, for instance.

Moreover, another matter that forces the large taxpayers to use tax consultant services is related to unclear definition of ‘who actually have the authority to make policies and/or decisions in running the company may perform tax rights and/or obligations of the said’. In practice, some of tax officers require written evidence confirming that the said employee is an employee as accorded with the said provision. Without such evidence, they would not give approval of the taxpayer’s rights and/or obligations performed.

The most extreme thing occurs when the written evidence is already provided, certain tax officers are still unwilling to handle the process. They insist to handle it only if the authorized persons performing the tax rights and/or obligations are the Directors. What happen when the large taxpayers deal with such a tax officer and their directors are not be able to do the tax rights and/or obligations because of that? Once again, there is no other choice than to seek tax consultant’s assistance, for instance, to sign a monthly tax return.

Tips in Choosing Tax Consultants

The current condition really forces taxpayers to utilize tax consultant services. When this should be done, one thing for sure is being selective in choosing tax consultants. Legality, competency and ethics are the perfect combo to base the decision. In practice, there are a quite large number of tax consultants not having all of the criteria; few of them do not have even a single one.

Why Should Be Legalized?

The Regulation of Finance Minister No. 22/PMK.03/2008 and the Circular of Director General of Taxes No. SE-16/PJ./2008 are the answer to this question. Besides requiring a special proxy from the taxpayers giving the authority, these regulations stipulate that the tax consultants appointed should fulfill the following:

a. Owning a Tax Identification Number;

b. Having filled the Annual Income Tax Return of the latest tax year;

c. Owning Tax Consultant License from the Director General of Taxes on behalf of the Finance Minister

Therefore, choosing a person claiming as a tax consultant with no tax consultant license, is surely not a right choice.

Why Should Be Competent?

Competency is basically required in any field of work since in general it truly contributes to the success achieved in the future. In the tax field, competency for tax consultant level does not merely relate to comprehension of technical matters, it also involves multi perspective analytical skill.

In practice, a tax consultant with most excellent taxation expertise and tax analysis skill may not always succeed to fight for his argument in a dispute with the tax authority, whereas another tax consultant having less expertise and skill may have higher potential to win a dispute case. The main strategy above all of this is to view tax issues from different perspectives, not only from the taxpayer client and tax consultant perspectives. Understanding the tax officers’ perspective and their internal working procedure is one of the key element when finding best solution to the taxpayer clients. Certain tax consultants have such multi-perspectives due to their experience as they formerly worked in the same institution.

Why Should Be Ethical?

When tax consultants are reluctant to conform to the code of ethics in performing tax rights and/or obligation of their taxpayer clients, for instance, by not reporting the appropriate tax due or encouraging their clients to take unlawful actions over their tax cases, they actually cause losses either in terms of State tax revenue or even their taxpayer clients’ efficiency. Any misconduct done will potentially be detected in the future time.

Thus, using unethical tax consultants who do not utilize their own competency is absolutely not a smart choice. It will be only delaying problems, not solving them.

Sumber : MUC Highlight

Income Tax Exemption in Part of Income related with daily, weekly and other non-permanent

2009-06-22T16:10:00.002+07:00

Minister of Finance Regulation No. 254/PMK.03/2008 dated on 31 December 2008

Income Tax for daily, weekly and other non-permanent employment would be exempted if:
Daily income received not more than Rp 150.000,00/person;
Daily Income received not more than Rp 1.320.000,00/month/person;

This Regulation would not be effective for income related with commission or fee payment to External Insurance Service Authorities and vendor.

This regulation would be effective in January 1, 2009.

Annual Return Acceptance and Processing Procedure

2009-06-22T14:51:00.003+07:00

Directorate General of Taxation (DGT) Regulation No. PER-19/PJ/2009 dated on February 25th, 2009

1. This regulation would explain about Annual Return acceptance and processing procedure;

2. As an addition, this regulation also would like to explain about the requirement needed in order all Tax Payer Annual Return could be accepted at lodgment time by the Tax Office;

3. Further, this regulation also state the details and attachment needed in order the said Annual Return could be accepted as “Complete and Clear” Annual Return;

4. Tax payer has the obligation to deliver its annual tax return directly through:

a. Tax Office Integrated Service Place (TPT) in the tax payer domiciled tax office;
b. Tax Corner (Pojok Pajak);
c. Tax Vehicle (Mobil Pajak);
d. Nearest Tax Drop Box

5. Tax Payer also has the obligation to deliver its annual tax return indirectly through:

a. Nearest Post Office (The Post Office will give the Tax Payer a Receipt of Annual Tax Return delivery to the Tax Payer as an evidence or proof that the said Tax Payer has submit its annual tax return accordingly)
b. Appointed Shipping Service Company(The Company will give the Tax Payer a Receipt of Annual Tax Return delivery to the Tax Payer as an evidence or proof that the said Tax Payer has submit its annual tax return accordingly);
c. Appointed Courier Service Company(The Company will give the Tax Payer a Receipt of Annual Tax Return delivery to the Tax Payer as an evidence or proof that the said Tax Payer has submit its annual tax return accordingly);
d. ASP E-Filling Process.

Please note that the Tax Office will give the delivered Annual Tax Return or Electronic Annual Tax Return (e-SPT) an Annual Return Lodgment Receipt To the Tax Payer without any research process.

According to Article 6 of this regulation, the Tax Officers would conduct a research in a period of 2 (Two) Months after the Annual Return received. The period of research would take 14 (fourteen) working days for Over Payment Annual Return; Please be aware that the regulation also mention that based on the results of research as referred in this regulations, The Tax Office would deliver a notification letter that would state and explain that the delivered Annual Tax Return is incomplete and the Tax Payer has the obligation to deliver all the requested materials and attachment needed in 30 (Thirty) days to the Tax Office after the Completeness Annual Return Notification Letter Issued to the Tax Payer in order to Complete all the required and requested matters related with the incomplete Annual Tax Return; Further, if the Tax Payer fails to fulfill the requested materials by the tax office, then the tax office will deliver a notification letter that would inform the tax payer that the said Annual Return is not accepted as a complete Annual Return so because of the said matters the Tax Payers would be assume never submitted any Annual Return to the Tax Office. This regulation would be effective in March 1, 2009.

Moves by financial centres boost OECD fight against tax evasion

2009-04-29T13:20:00.004+07:00

12/03/2009 - Moves by a number of financial centres over recent weeks in favour of transparency and exchange of information on tax matters have given a welcome boost to efforts to counter international tax evasion, OECD Secretary-General Angel Gurría said.

While many jurisdictions still maintain arrangements that prevent them from assisting foreign authorities in tax investigations, recent actions and statements consistent with the OECD standards in this area on the part of some show that real progress is being achieved.

Among other recent moves, Mr. Gurría noted:
Singapore has announced that it endorses the principles and standards for transparency and exchange of information agreed by a majority of OECD countries and several dozen non-OECD countries and territories and will introduce legislation by mid-2009 that will allow it to implement them.
Hong Kong, China, has announced that it will introduce a bill in mid-2009 to allow it to negotiate agreements implementing the OECD standard for effective exchange of information.
Andorra has announced its willingness to enter into tax information exchange agreements and its intention to eliminate strict bank secrecy for tax purposes by November 2009.
The Isle of Man has signed a tax information exchange agreement with Germany, raising to 13 the number of such pacts that it has with other economies.
Liechtenstein, which has already signed a tax information exchange agreement with the United States, has announced its acceptance of the OECD standards and its willingness to negotiate agreements that provide for effective exchange of information in all tax matters.
The Cayman Islands has announced that it will sign tax information exchange agreements with seven Nordic economies on 1 April, 2009, bringing to eight the number of such agreements that it has with other economies.
Altogether, since G-20 leaders signalled their determination at their summit in Washington last November to combat cross-border tax evasion, more than 20 bilateral tax information exchange agreements have been signed between different partners.

Mr. Gurría welcomed these developments, noting that “ending the abuse of banking secrecy arrangements that facilitate tax evasion is part of a broader drive to clean up one of the more controversial sides of a globalised economy.” He added that “the support of the G-20 for efforts to improve transparency and exchange of information has underscored their relevance for both developed and developing countries.”

Good access to information is a prerequisite for the effective and fair application of each country’s tax laws. The OECD standards in this area provide for an exchange of information between tax authorities on request in cases of specific inquiries into suspected tax evaders. They prohibit so-called “fishing expeditions” and are designed to protect the confidentiality of the information exchanged.

Source: www.oecd.org

Download: List of Tax Heaven Countries

OECD takes last four states off tax haven list

2009-04-27T14:27:00.002+07:00

Paris (ANTARA News) - The OECD on Tuesday removed Costa Rica, Malaysia, the Philippines and Uruguay from its list of hard-line uncooperative tax havens after they bowed to pressure and vowed to open up their books.
"These four jurisdictions have now made a full commitment to exchange information according to the OECD standard," OECD General Secretary Angel Gurria was quoted by AFP as telling a press conference in Paris.
They were the only remaining countries on the first of three lists published after world leaders agreed last week at a G20 summit in London to crack down on tax havens.
One list named the four states the Organisation for Economic Cooperation and Development said had not pledged to accept international tax reporting standards.
A second "grey list" named 38 territories that had committed to such standards but had not yet fully implemented them, and a third list identified 40 countries that had substantially implemented them.
"I am happy that there is no longer any one of the 84 jurisdictions normally monitored by the OECD ... that is in the category of not adopting and having not committed to adopt the standards," said Gurria.
"This is very important progress," said the head of the Paris-based organisation that seeks to coordinate the economic policies of its 30 industrialised members.
Costa Rica, the Philippines, Malaysia and Uruguay are now on the "grey list."
"They have officially informed the OECD that they commit to cooperate in the fight against tax abuse, that this year they will propose legislation to remove the impediments to the implementation of the standard," the OECD said.
Tax havens have come under increasing scrutiny as the global financial crisis bites ever deeper, sparking calls for radical action to curb abuses blamed for the debacle, among them tax evasion and bank secrecy.
After US and European governments bailed out a number of banks, politicians began questioning how and why some of those same financial institutions were able to continue to operate in countries that encourage tax evasion.
Transparency International France last year estimated about 10 trillion dollars -- four times France's gross domestic product -- were stashed in secret offshore accounts away from the prying eyes of regulators or tax inspectors.

Source: Antara News, 04/08/09 15:25

Countries snap back at OECD tax list

2009-04-26T14:34:00.001+07:00

Zurich (ANTARA News) - Countries faulted by the OECD for their tax reporting standards snapped back Friday, with some disputing their designation and others vowing to clear their names. After the Group of 20 nations agreed to crack down on tax havens at a London summit Thursday, the OECD published three lists, one naming four countries it said had not pledged to abide by internationally agreed tax reporting norms and another of countries and territories that had yet to fully implement such standards. A third list of 40 countries identified those that had substantially implemented the tax standard. The Paris-based Organisation for Economic Cooperation and Development (OECD), which seeks to coordinate the economic polices of its 30 industrialised members, placed the Philippines, Malaysia, Costa Rica and Uruguay on the first list. The second list had 38 names, including European Union members Austria, Luxembourg and Switzerland as well as Liechtenstein. In reaction, the Philippines insisted it had one of the world's strictest banking secrecy laws and said it was "unfortunate" that it had been designated as having failed to meet OECD criteria. "We are committed to compliance with those standards and we are confident that we will meet the requirements for removal from this list," Cerge Remonde, a spokesman for President Gloria Arroyo, told reporters. Finance Secretary Margarito Teves said the Philippines "is and has always been ready to comply with conditions that have been set by international organisations, such as the G20 group of countries." But he added that "a review of existing local legislation relative to banking secrecy as well as tax information secrecy" would have to be done by the Philippines legislature. Trade Secretary Peter Favila added: "I'm sure the Philippine government would take the necessary steps to ensure that we meet their (OECD) expectations." In Europe, Luxembourg and Switzerland complained of their inclusion on the middle tier -- or "grey" -- list. "I think that the treatment given to some countries is a bit incomprehensible," Luxembourg Prime Minister Jean-Claude Juncker told journalists as he arrived to chair a meeting of eurozone finance ministers in Prague. Juncker renewed criticism of the way the lists were drawn up, noting that several US states with tax-friendly laws were not put on either list. He had said Tuesday that if Luxembourg were placed on any international list of offshore financial centres then Delaware, Nevada and Wyoming should also be named and shamed as tax havens. The Swiss finance ministry issued a statement saying that "President Hans-Rudolf Merz regrets this procedure." "The list does not specify the criteria on the basis of which it was drawn up. Switzerland is not a tax haven," it added, remarking that it was "particularly strange" that Bern was not consulted on drawing up the list even though it is an OECD member. Liechtenstein said it hoped to be struck from the list. "Our objective is to no longer figure on this grey list," a government spokeswoman told AFP. "We have already begun moving in this direction by starting bilateral discussions with Germany and Britain," she added. Austrian Finance Minister Josef Proell played down Austria's inclusion on the "grey" list and said it did not affect the country's banking secrecy laws. "The talks are over for us because the proof is there on the grey list that we have taken steps in the right direction," he told journalists as he arrived for the meeting with eurozone counterparts. "From Austria's point of view, national banking law will not disturb banking secrecy," he said, adding that changes would entail improving the exchange of tax information with other countries when there is suspicion of wrong-doing. German Finance Minister Peer Steinbrueck, who has led international efforts to crack down on tax havens, welcomed the new pressure on offshore financial centres. "We cannot allow German taxpayers to be invited to put capital in these tax havens with the clear intention to hoodwink us, you and me," he said. (*)

Source: Antara News, 04/04/09 09:10

Read Also
G20 to consider tax haven sanctions: French finance minister
OECD names and shames tax havens

World Bank gives loan to RI to improve tax systems

2009-01-21T13:57:00.000+07:00

The World Bank, one of the country's major donors, has approved a US$110 million loan to the Indonesian government to help it improve taxation systems.

The soft loan was approved and announced from Washington last week, a media statement said.

"Indonesia has already embarked on a major effort to reform its system of collecting tax revenues, most notably by revamping the directorate general of taxation, introducing modern compliance management systems, and passing the Tax Procedures Law in 2008," the Bank's country director for Indonesia, Joachim von Amsberg said in the statement.

The Finance Ministry's directorate general of taxation performed surprisingly well last year, persuading over 3 million people to register for their tax number (NPWP) and making a surplus of Rp 37 trillion in tax revenues, or 106 percent more than the planned state budget.

The tax office succeeded by launching massive tax campaigns and offering numerous incentives to people with an NPWP, including exemption from the Rp 2.5 million (US$227) exit tax for overseas travel and amnesty from administrative fines for tax return adjustments for 2007 and earlier.

It began its tax reform efforts in 2001, with a strategy aimed at: promoting voluntary compliance among taxpayers; increasing the efficiency of administration; and restoring taxpayers' confidence in the fairness and integrity of tax administration.

The office also runs other programs, such as taking over workers' tax liabilities for companies hit hard by the crisis in order to stimulate economic growth, the Finance Ministry's directorate general for taxation Darmin Nasution said.

According to von Amsberg, the $110 million loan aims to help the office embark on an even more progressive reform in tax administration through a project called the Project for Indonesian Tax Administration Reform (PINTAR).

"Through PINTAR, the World Bank sets out to complement this effort by helping the Indonesian Government expand tax bases, both in terms of increasing the number of tax payers and of transactions coming into the tax system, which would in turn help generate more non oil and gas tax revenue," he said.

The PINTAR program will help increase the directorate general's tax efficiency and capacity, he added, through improved administrative systems, advanced training of human resources and better management.

"Through strengthened staff capacity, integrity standards and a more service-oriented approach, PINTAR will enable better taxpayer services reducing compliance costs for the private sector," said World Bank senior public sector specialist and project team leader, Jens Kromann Kristensen.

He added a modern integrated IT system will also help raise productivity and facilitate information exchange across the Directorate General of Taxation. (dis)

Source: The Jakarta Post , Jakarta | Mon, 01/19/2009 5:43 PM

Tax Rules Still Unclear for Mixed Marriages

2009-01-21T13:45:00.003+07:00

The hopes of some mixed-marriage couples to obtain answers regarding taxation policies have gone up in smoke.

A seminar on taxation held Saturday concluded with more questions than answers as couples – including Indonesian men married to foreign women and Indonesian woman married to foreign men – discovered that their marriages hardly entered the tax office’s mind.

“My husband works as a diplomat. He does not have a taxpayer identification card (NPWP),” said Ayu Castermans, a participant at the seminar organized by the Mixed Marriage Community (KPC Melati) in Kuningan, South Jakarta.

A panelist at the seminar said Ayu did not need an NPWP because she was a housewife and her husband had diplomatic status.

The panelist, however, added that another regulation implied that Ayu needed an NPWP because there was a pre-marital agreement between the couple separating the ownership status of the family’s assets, in this case the property.

“I am worried that one day, when tax officers check my asset report, they will consider me to be violating the law because I have no NPWP but have an asset under my name.”

“They will wonder where the money came from. And even though I will say it was from my husband, how will I prove it to them?”

Ayu was not the only one confused.

Another asked a hypothetical case about her non-Indonesian husband, who now has an NPWP:

What happens if he leaves the country for good but after his retirement returns as a tourist?

“Should we report the tax, then?” she asked.

Formation Management Institute tax division head Aminarso said he could not immediately provide answers to all questions.

For Indonesian couples, the tax policy is simpler.

A family is regarded as one economic entity with father as the head of family. He is the one who must have an NPWP.

The policy still applies if a husband is unemployed. The wife must pay for the family’s tax obligations, but the NPWP will still be under the husband’s name.

But things get more confusing when it comes to mixed-marriage couples with issues such as domicile, premarital agreements and property ownership.

Under the government’s program, dubbed the Sunset Policy, all unregistered tax payers must present their tax report to the tax office within a year and they must have the NPWP by December.

The government, however, has extended the deadline until the end of February, allowing more unregistered tax payers to hand in their reports. Cecilia Ronnevik, who currently lives in Norway, questioned the Indonesian Embassy in Oslo. She said she did not receive information regarding “Sunset Policy” from the tax office.

However, Aminarso said he could not immediately give clarification on the issue. (hdt)

Source: The Jakarta Post Sun, 01/18/2009 10:37 AM

Unregistered Taxpayers to Pay double for Exit Tax

2009-01-21T13:43:00.001+07:00

The tax office has officially announced an increase in the much-decried fiskal, or exit tax for travelers going overseas, in part to put to rest widespread speculation over the amount of the increase.

The exit tax for those aged 21 years and above departing from airports will be raised from Rp 1 million (US$91) to Rp 2.5 million, and for those traveling by sea from Rp 500,000 to Rp 1 million, effective Jan. 1, 2009, to Dec. 31, 2010.

However, registered taxpayers will not have to pay a single cent; and starting from 2011, the exit tax will be scrapped altogether, according to the Finance Ministry's directorate general of taxation.

Director general Darmin Nasution said the increase in exit tax was part of an effort to get more potential taxpayers to register for a tax number (NPWP).

It is proving a smart ruse, with many middle-to-high-income residents flocking to nearby tax offices to get an NPWP to comply with the office's Sunset Policy program that ends on Dec. 31.

The program, under which applicants' tax obligations in previous years are written off, has seen people rushing to register themselves.

This month alone, the number of people registering for an NPWP was between 50,000 and 100,000 per day, up from about 7,000 people daily in previous months.

The exit tax will from now on become an up-front payment for income tax.

For instance, an employee whose income tax is Rp 20 million per year and who has traveled abroad twice this year -- paying Rp 1 million in exit tax each time -- will only have to pay Rp 18 million in income tax when filing their tax returns in March 2009.

For those not yet registered, the new exit tax of Rp 2.5 million could prove very daunting.

Satria Ramadhan, who will go to Bangkok for holidays in early January, said he was glad to have registered for an NPWP.

"Otherwise, I would have to pay Rp 2.5 million. I would have definitely canceled my trip if I had to pay such a huge amount."

Another traveler, Frederick Tobing, praised the move by the directorate general of taxation.

"It's a smart move. Most people, including myself, will rush to register at the tax office, just to avoid paying the exit tax."

The directorate general of taxation estimates up to 10 million new taxpayers have registered this year, Darmin said.

"I didn't expect the number to be this huge. No one expected to tap 10 million new taxpayers," he said.

To get exemption from paying the exit tax, registered taxpayers must submit a copy of their NPWP, passport and boarding pass to tax officials at airports or ports.

If the NPWP is declared valid, the officials will put a "free exit tax" sticker on the boarding pass. If it is not valid, travelers will have to pay the exit tax.

1. Exit tax from airports for people aged 21 years and above raised from Rp 1 million to Rp 2.5 million.
2. Exit tax from ports for people aged 21 years and above raised from Rp 500,000 to Rp 1 million.
3. Those automatically exempt from paying the exit tax include: People aged less than 21 years; foreigners staying in Indonesia no more than 183 days within the last 12 months; diplomats; employees of international organizations; Indonesian citizens with official documents from other countries, including students; Haj pilgrims and Indonesian migrant laborers.
4. Those exempt from paying the exit tax but required to provide documentary proof: Foreign students with letters of recommendation from their universities; foreign researchers; foreign workers in Batam, Bintan and Karimun; disabled or ill people seeking medical treatment abroad paid for by social organizations; people traveling for art, culture, sport and religious missions, and students in a student-exchange program.

Sources: Aditya Suharmoko, The Jakarta Post, December 26, 2008

History about Tax

2008-12-24T08:28:00.002+07:00

EGYPT

During the various reins of the Egyptian Pharaohs tax collectors were known as scribes. During one period the scribes imposed a tax on cooking oil. To insure that citizens were not avoiding the cooking oil tax scribes would audit households to insure that appropriate amounts of cooking oil were consumed and that citizens were not using leavings generated by other cooking processes as a substitute for the taxed oil.

GREECE¹

In times of war the Athenians imposed a tax referred to as eisphora. No one was exempt from the tax which was used to pay for special wartime expenditures. The Greeks are one of the few societies that were able to rescind the tax once the emergency was over. When additional resources were gained by the war effort the resources were used to refund the tax.

Athenians imposed a monthly poll tax on foreigners, people who did not have both an Athenian Mother and Father, of one drachma for men and a half drachma for women. The tax was referred to as metoikion

ROMAN EMPIRE

The earliest taxes in Rome were customs duties on imports and exports called portoria.¹

Caesar Augustus was consider by many to be the most brilliant tax strategist of the Roman Empire. During his reign as "First Citizen" the publicani were virtually eliminated as tax collectors for the central government. During this period cities were given the responsibility for collecting taxes. Caesar Augustus instituted an inheritance tax to provide retirement funds for the military. The tax was 5 percent on all inheritances except gifts to children and spouses. The English and Dutch referred to the inheritance tax of Augustus in developing their own inheritance taxes.

During the time of Julius Caesar a 1 percent sales tax was imposed. During the time of Caesar Augustus the sales tax was 4 percent for slaves and 1 percent for everything else.¹

Saint Matthew was a publican (tax collector) from Capernaum during Caesar Augustus reign. He was not of the old publicani but hired by the local government to collect taxes.

In 60 A.D. Boadicea, queen of East Anglia led a revolt that can be attributed to corrupt tax collectors in the British Isles. Her revolt allegedly killed all Roman soldiers within 100 miles; seized London; and it is said that over 80,000 people were killed during the revolt. The Queen was able to raise an army of 230,000. The revolt was crushed by Emperor Nero and resulted in the appointment of new administrators for the British Isles.¹

GREAT BRITAIN

The first tax assessed in England was during occupation by the Roman Empire.

Lady Godiva
Lady Godiva was an Anglo-Saxon woman who lived in England during the 11th century. According to legend, Lady Godiva's husband Leofric, Earl of Mercia, promised to reduce the high taxes he levied on the residents of Coventry when she agreed to ride naked through the streets of the town.

When Rome fell, the Saxon kings imposed taxes, referred to as Danegeld, on land and property. The kings also imposed substantial customs duties.

The 100 years War (the conflict between England and France) began in 1337 and ended in 1453. One of the key factors that renewed fighting in 1369 was the rebellion of the nobles of Aquitaine over the oppressive tax policies of Edward, The Black Prince.

Taxes during 14th century were very progressive; The 1377 Poll tax noted that the tax on the Duke of Lancaster was 520 times the tax on the common peasant.

Under the earliest taxing schemes an income tax was imposed on the wealthy, office holders, and the clergy. A tax on movable property was imposed on merchants. The poor paid little or no taxes.

Charles I was ultimately charged with treason and beheaded. However, his problems with Parliament came about because of a disagreement in 1629 about the rights of taxation afforded the King and the rights of taxation afforded the Parliament.

The King's Writ stated that individuals should be taxed according to status and means. Hence the idea of a progressive tax on those with the ability to pay was developed very early.

Other prominent taxes imposed during this period were taxes on land and various excise taxes. To pay for the army commanded by Oliver Cromwell, Parliament, in 1643, imposed excise taxes on essential commodities (grain, meat, etc.). The taxes imposed by Parliament extracted even more funds than taxes imposed by Charles I, especially from the poor. The excise tax was very regressive, increasing the tax on the poor so much that the Smithfield riots occurred in 1647. The riots occurred because the new taxes lowered rural laborers ability to buy wheat to the point where a family of four would starve. In addition to the excise tax, the common lands used for hunting by the peasant class were enclosed and peasant hunting was banned (hooray for Robin Hood).

A precursor to the modern income tax we know today was invented by the British in 1800 to finance their engagement in the war with Napoleon. The tax was repealed in 1816 and opponents of the tax, who thought it should only be used to finance wars, wanted all records of the tax destroyed along with its repeal. Records were publicly burned by the Chancellor of the Exchequer but copies were retained in the basement of the tax court.4

COLONIAL AMERICA: Colonists were paying taxes under the Molasses Act which was modified in 1764 to include import duties on foreign molasses, sugar, wine and other commodities. The new act was known as the Sugar Act.
Because the Sugar Act did not raise substantial revenue amounts, the Stamp Act was added in 1765. The Stamp Act imposed a direct tax on all newspapers printed in the colonies and most commercial and legal documents.

POST-REVOLUTION AMERICA

In 1794 Settlers west of the Alleghenies, in opposition to Alexander Hamilton's excise tax of 1791, started what is now known as the "Whiskey Rebellion" The excise tax was considered discriminatory and the settlers rioted against the tax collectors . President Washington eventually sent troops to quell the riots. Although two settlers were eventually convicted of treason, the President granted each a pardon.

In 1798 Congress enacted the Federal Property Tax to pay for the expansion of the Army and Navy in the event of possible war with France. In the same year, John Fries began what is referred to as the "Fries Rebellion," in opposition to the new tax. No one was injured or killed in the insurrection and Fries was arrested for treason but eventually pardoned by President Adams in 1800. Surprisingly, Fries was the leader of a militia unit called out to suppress the "Whiskey Rebellion."²

The first income tax suggested in the United States was during the War of 1812. The tax was based on the British Tax Act of 1798 and applied progressive rates to income. The rates were .08% on income above £60 and 10 percent on income above £200. The tax was developed in 1814 but was never imposed because the treaty of Ghent was signed in 1815 ending hostilities and the need for additional revenue.

The Tax Act of 1861 proposed that "there shall be levied, collected, and paid, upon annual income of every person residing in the U.S. whether derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere, or from any source whatever.

The 1861 Tax Act was passed but never put in force. Rates under the Act were 3% on income above $800 and 5% on income of individuals living outside the U.S.

The Tax Act of 1862 was passed and signed by President Lincoln July 1 1862. The rates were 3% on income above $600 and 5% on income above $10,000. The rent or rental value of your home could be deducted from income in determining the tax liability. The Commissioner of Revenue stated "The people of this country have accepted it with cheerfulness, to meet a temporary exigency, and it has excited no serious complaint in its administration." This acceptance was primarily due to the need for revenue to finance the Civil War.

Although the people cheerfully accepted the tax, compliance was not high. Figures released after the Civil War indicated that 276,661 people actually filed tax returns in 1870 (the year of the highest returns filed) when the country's population was approximately 38 million.

The Tax Act of 1864 was passed to raise additional revenue to support the Civil War.

Senator Garret Davis, in discussing the guiding principle of taxation, stated "a recognition of the idea that taxes shall be paid according to the abilities of a person to pay."

Taxes rates for the Tax Act of 1864 were 5% for income between $600 and $5000; 7.5% for income between $5001 and $10,000; 10% on income above $10,000. The deduction for rent or rental value was limited to $200. A deduction for repairs was allowed.

With the end of the Civil War the public's accepted cheerfulness with regard to taxation waned. The Tax Act of 1864 was modified after the war. The rates were changed to a flat 5 percent with the exemption amount raised to $1,000. Several attempts to make the tax permanent were tried but by 1869 " no businessman could pass the day without suffering from those burdens" The Times. From 1870 to 1872 the rate was a flat 2.5 percent and the exemption amount was raised to $2,000.

The tax was repealed in 1872 and in its place was installed significant tariff restrictions that served as the major revenue source for the United States until 1913. In 1913 the 16th Amendment was passed, which allowed Congress authority to tax the citizenry on income from whatever source derived.

It should be noted that the Tax Act of 1864 was challenged several times. The Supreme Court unanimously supported the tax. After the war the tax was declared unconstitutional by the same court because it represented direct taxation on the citizenry which was not allowed under the constitution.

1930's: During the 1930's federal individual income taxes were never more than 1.4 percent of GNP. Corporate taxes were never more than 1.6 percent of GNP. In 1990 those same taxes as a percent of GNP were 8.77 and 1.99 respectively.³

FICA taxes since 1937

¹ Adams, Charles, 1993, For Good and Evil: The Impact of Taxes on the Course of Civilization, Madison Books.
² Rehnquist, William H. 1992 Grand Inquests :The Historic Impeachments of Justice Samuel Chase and President Andrew Johnson.William Morrow & Company, Inc. New York, NY.
³Steuerle, C. Eugene The Tax Decade
⁴Adams, Charles 1998 Those Dirty Rotten TAXES, The Free Press, New York NY

Indonesian Tax Terms

2008-12-23T13:48:00.004+07:00

1. Tax = Pajak
2. Taxation = Perpajakan
3. Income Tax = Pajak Penghasilan (PPh)
4. Value Added Tax (VAT) = Pajak Pertambahan Nilai (PPN)
5. Land and Building Tax = Pajak Bumi dan Bangunan (PBB)
6. Directorate General of Taxation (Taxes) = Direktorat Jenderal Pajak
7. Director General of Taxation (Taxes) = Direktur Jenderal Pajak
8. Tax Office = Kantor Pelayanan Pajak (KPP)
9. Taxable Income = Penghasilan Kena Pajak
10. Personal Exemption (Non Taxable Income) = Penghasilan Tidak Kena Pajak (PTKP)
11. Taxation General Provisions and Procedures = Ketentuan Umum dan Tata Cara Perpajakan (KUP)
12. Taxpayer = Wajib Pajak (WP)
13. Taxpayer Code Number (Tax Identification Number) = Nomor Pokok Wajib Pajak (NPWP)
14. Tax Return = Surat Pemberitahuan (SPT)
15. Permanent Establishment = Bentuk Usaha Tetap (BUT)
16. Deemed Profit to Determine Net Income = Norma Penghitungan Penghasilan Neto
17. Taxable Income Brackets = Lapisan Penghasilan Kena Pajak

(c) syafrianto 23122008 - All Right Reserved

Indonesian Fiscal Tax Regulation in 2009

2008-12-23T13:20:00.004+07:00

Hold off on holiday plans for a month. Come January 1st, 2009, Indonesian residents paying Rp 2,5 million each time they’re bound for foreign ground may become a thing of the past as a new ruling to do away with the unpopular fiscal tax kicks in. Under the new law, designed to encourage Indonesians to register and pay taxes, travelers with an official tax registration number (NPWP) get to travel fiscal free. For family travel, only the NPWP of the family head needs t be shown for exemption – dependents under 21 years of age are exempted under parent’s NPWP. Cherish the goodwill though; tax officials have hinted that the new law, up for review two years later in 2011, may only be temporary.

Source: The Jakarta Post, Sun, 11/23/2008 1:38 PM

Law Number 36 Year 2008 Concerning Income Tax

2008-10-10T13:33:00.004+07:00

Income Tax Law has been issued. This law is registered at the Suplement to The Statute Book of Republic of Indonesia Number 4893.

This Law ini Number 36 Year 2008 and has signed by President of Republic of Indonesia dated 23 September 2008. This law will be implemented as 1 January 2009.

Download the Law Number 36 Year 2008 in here:

Income Tax Facilities for Investment in Certain Business Line in Indonesia

2008-10-10T07:11:00.005+07:00

Currently, the Government has issued Government Regulation (Peraturan Pemerintah/PP) No. 62 Year 2008 as the revision of Government Regulation No. 1 Year 2007. Government Regulation No. 62 Year 2008 is the new provisions were issued as a result of amendment of the regulation number 1 Year 2007 on facilities tax revenue for the Investment in the Field of Business-Specific and / or in certain areas.

PP is rising in order to improve the investment climate and national competitiveness. In the PP, the government increase the number of business sectors that have the incentive of income tax from 15 to 23 business sectors.

Meanwhile, to the location where investors infuse capital increase from 9 to 15 regions. PPh facilities provided is the reduction in Net Income 30% of the total investment that is charged during six years of 5 percent each year.

Other facilities are depreciation and amortization, which accelerated, the imposition of PPh dividend that the dividend paid to the subject Number of Foreign Affairs by 10 percent. Selain itu ada juga kompensasi kerugian antara lima dan 10 tahun. In addition, there is also loss of compensation between five and 10 years old.

Download: List of Business and Regional Certain Facilities Get the PP No. 62 Year 2008

Original copy: Daftar Bidang Usaha dan Daerah Tertentu Yang Mendapat Fasilitas PP No. 62 Tahun 2008

Expatriate's Salary Standard, Subject to Income Tax Article 21 and 26

2008-09-19T07:52:00.006+07:00

Director General of Taxation has issued the standard to count the fairly salary that should to pay to the foreigner worker (expatriate). This fairly salary is stated at Keputusan Direktur Jenderal Pajak Nomor KEP-173/PJ./2002 dated 22 May 2002.

Directorate General of Taxation (DGT) will be count the salary subject to Income Tax Article 21 or 26 using this standard if the salary that pay to the foreigner worker and report to DGT is not fairly.

Income Tax Withold on Construction Services

2008-09-13T10:29:00.000+07:00

Resident Taxpayers and Permanent Establishments qualified as small scale contractors have been potential to be imposed with Final Income Tax of Article 4 paragraph (2) or with Income Tax Article 23. This is based on the Government Regulation Number 140 Year 2000 and Regulation of Director General of Taxes Number PER-70/PJ./2007 (later referred to as PER-70). Final Income Tax of Article 4 paragraph (2) (later referred to as Final Income Tax) would be imposed if the procurement value per project executed is up to IDR 1 Billion. If the procurement value per project is more that IDR I Billion, Income Tax Article 23 would be imposed.

On the other hand, those qualified as medium and large scale contractors are only potential to be subject to Income Tax Article 23. Entrepreneurs rendering construction services but not qualified as contractors are also only potential to be subject to Income Tax Article 23. However, in contrast to the entrepreneurs already legalized themselves as contractors, the types of service rendered could not be categorized as construction services but as other services as meant in the appendix of PER-70.

In other words, Final Income Tax would only be imposed to small scale contractors having procurement value up to IDR 1 Billion. However, in practice, it is quite many taxpayers who would be confused in determining type of Income Tax to be imposed to construction service providers.

Definitely Final Income Tax

Now, PP No.140 Year 2000 has been revoked and replaced by PP No. 51 Year 2008 issued on 20 July 2008 and become effective since 01 January 2008. This new PP states that, “Upon income from construction service business, final Income Tax is imposed.” Further, this PP stipulates that, “Income Tax tariff for construction service business is as follows:

a. 2% (two percent) for Construction Execution conducted by service providers having small scale qualification;

b. 4% (four percent) for Construction Execution conducted by service providers having no business qualification;

c. 3% (three percent) for Construction Execution conducted by service providers other than those as meant in letter a and letter b;

d. 4% (four percent) for Construction Planning or Construction Supervisory conducted by service providers having business qualification; and

e. 6% (six percent) for Construction Planning or Construction Supervisory conducted by service providers having no business qualification.

From the above provisions, it can be concluded that whichever the criteria is, a construction service entrepreneur is now definitely subject to Final Income Tax. It is worth noting that the difference is in the tariffs applied. For those qualified as contractors, lower tax is imposed compared to those not qualified as ones. Entrepreneurs already legalized as contractors shall not be taxed more than 4%, whereas those who have not legalized/do not legalize themselves, can be taxed up to 6%.

Inevitably Paying Tax

One of the things that should be now considered by all construction service providers, is the condition that construction operating expenses can no longer be calculated as deductible expenses. It is because PP No. 138 Year 2000 stipulates that expenses related to income subject to Final Income cannot be deducted in Taxable Income calculation. It means that even in loss position, construction service entrepreneurs should still pay the tax. This is significantly different from those of the past time, where those subject to Income Tax Article 23 would still be able to calculate their operating expenses.

Separate Recording

Since expenses related to income subject to Final Income Tax cannot be calculated as deductible expenses, construction service entrepreneurs who also run other business not subject to Final Income Tax, should maintain separate recording of income and expenses from construction service with those from other business. This is highly important for the purpose of Corporate Income Tax calculation on other business if any. If there are assets/expenses difficult to be separated since they are related to both construction and other businesses carried out, the calculation of expenses can proportionally be made based on the percentage of income received from construction business and other business not subject to Final Income Tax.

Revision of Periodic Income Tax Return

In the Article 10 0f PP No.51 Year 2008, it is stipulated that upon contracts signed prior to 1 January 2008, the following provisions are applied:

· For payments of contracts/parts of contracts up to 31 December 2008, Income Tax imposition refers to the previous PP, which is PP No. 140 Year 2000;

· For payments of contracts/parts of contracts after 31 December 2008, Income Tax imposition is based on this new PP.

What is meant by the above provision is that, if contract is signed after 01 January 2008, the reference for Income Tax withholding is the provisions of PP No. 51 Year 2008. Thus, if a contract is signed after 01 January 2008 and the related taxpayer has already recognized the deductible expenses/paid construction service fee, tax that should be withheld is Final Income Tax. The revision to the Periodic Income Tax Return should be made if the related taxpayer has actually withheld Income Tax Article 23. The revision should also be made when a taxpayer has already withheld Income Tax Article 23 on construction service fee whose contract is signed before 01 January 2008 and already recognized it as deductible expense in year 2008, but has recently received the payment in year 2009.

No More Compensation Right

Another new matter stipulated in PP No. 5 Year 2008 is that any loss from construction service business which still remains up to Tax Year 2008 can only be compensated up to Tax Year 2008 as referred in its Article 10. For construction service entrepreneurs previously imposed with Income Tax Article 23 and having loss not yet compensated in a material amount, this provision may causes them to loose their right to compensate the remaining loss.

For example, if a medium scale contractor experiences a great loss in year 2007, referring to the previous tax provision, the loss would certainly be compensated with the business profit within the subsequent five tax years. Now, the loss may only be compensated in year 2008. So, if the business profit in year 2008 is lower than the loss in year 2007, there will be loss amount that cannot be compensated. In fact, if there is no business profit but loss in year 2008, there will be no chance to compensate the total amount of loss in year 2007.

PE: No Calculation of Expense?

PP No.51 Year 2008 affirms that construction service entrepreneurs with the status of Permanent Establishment (PE) could not get away from Final Income Tax imposition. PEs, which are only engaged in construction service business, accordingly could not also calculate their operating expenses. What seems to be the problem is that the PEs are required to pay Branch Profit Tax of 20% or the tariff under the Tax Treaty from their Taxable Income after tax.

The amount of Branch Profit Tax will not be obtained if a PE does not firstly calculate its Taxable Income, by deducting operating expenses from gross income. In other words, though already subject to Final Income Tax, PEs should still bear the obligation to calculate their operating expenses as accorded with the Article 6 and the Article 9 of UU PPh. After the Taxable Amount is acquired, based on the Decree of Finance Minister No.113/KMK.03/2002, Branch Profit Tax is calculated from the amount resulting from Taxable Income amount minus Final Income Tax.

Tips

As already informed above, entrepreneurs already qualified as contractors shall not be taxed more than 4%, different if compared to those not yet qualified which can be taxed up to 6%. Thus, it can be concluded that business qualification clearly determines which tax tariff to be imposed. The question is what is meant by the qualification it self?

According to the Article 3 paragraph (1) letter a of PP No. 51 Year 2008, business qualification is stratification determined based on the certificate issued by a Construction Service Development Institution. In practice, Gabungan Perusahaan Konstruksi Nasional Indonesia (GAPEKSINDO) is one of the institutions having the authorization to issue the certificate.

If you are a payer of construction service fee which should withhold Income Tax, in order to avoid bearing higher Income Tax tariff than the proper one, you should ascertain the existence of the certificate issued by a Construction Service Development Institution such as GAPEKSINDO. In the other hand, if you are a construction service provider, before being imposed with higher tax tariff than the proper one, you should provide the said certificate.

Another more important thing to be underlined is the same perception on the construction service itself. Both tax withholders and construction service providers ideally own the same perception on the definition of construction service. If not, it is possible that the tax withholders will impose tax tariff not in accordance with the provision of Income Tax on construction service business.

DOWNLOAD INCOME TAX LAW 2008 - UU PPh 2008

2008-09-08T09:26:00.006+07:00

The House of Representatives (DPR) passed an income tax bill (Rancangan Undang-Undang PPh-RUU PPh) into law at its plenary meeting.

The Draft of income tax law can be access in here:

1. Income Tax Law 2008 ( UU PPh 2008)

2. The Elucidation of Income Tax Law 2008

This draft is for discussion only because it's not yet signed by President of Republic of Indonesia.

Income Tax Law has been signed by President of Republic of Indonesia, September 23, 2008 and this law can be download in the next posting (download in here INCOME TAX LAW No. 36 YEAR 2008).

Key word:

Draft RUU PPh 2008

Download UU PPh 2008

House passes income tax bill into law

2008-09-04T12:34:00.001+07:00

Jakarta (ANTARA News) - The House of Representatives (DPR) passed an income tax bill into law at its plenary meeting here on Tuesday.

All the 10 House factions in their final comments favored the passage of the bill into law.

Chief of the House`s Special Committee on the Income Tax Bill Melchias Markus Mekeng said the amendments to the income tax law affected a number of important matters.

They included exemptions from income tax, untaxable income, tax rates, exit tax exemption and tax privileges for small- and medium-scale businesses.

The objects exempted from income tax are divided into two groups. The first group is assistances/contributions including alms received by alms collectors endorsed by the government and compulsory contributions paid by adherents of religious faiths recognized in the country.

The second group is grants received by religious, educational, social bodies including foundations, cooperatives and individuals engaged in small and micro businesses.

Under the new income tax law, the amount of untaxable income for an individual taxpayer is raised to Rp15.84 million from Rp13.2 million a year. The figure will be raised by Rp1.32 million if the taxpayer is married.

Income tax on individual taxpayers is subject to progressive tariffs divided into four. The taxable income of up to Rp50 million is subject to a 5-percent tariff, Rp50 million to Rp250 million a 15-percent tariff, Rp250 million to Rp500 million a 25-percent tariff and more than Rp500 million a 30-percent tariff.

Both the House and the government agreed to lower the tariff of income tax on resident corporate taxpayers and permanent establishments from the current 30 percent to 28 percent in 2009 and 25 percent in 2010.

The new income tax law also stipulates that a 21-year-old resident individual taxpayer who does not have a taxpayer code number and intends to travel overseas is required to pay tax to be provided for in a government regulation. The provision will take effect until December 31, 2010.

Under the law, small and medium micro businesses would also deserve tariff reduction as much as 50 percent of the normal tariff imposed on the taxable income from portion of the gross turnover of up to Rp4.8 billion, Melchias said.

Finance Minister Sri Mulyani Indrawati meanwhile said the government was preparing the implementation regulations on the law.

"Hopefully, the law will take effect on January 1, 2009," she said.

(*)

source: www.antara.co.id (09/02/08 17:43)

House Proposes Across-the-board Tax Cuts

2008-08-04T10:00:00.002+07:00

A House of Representatives committee is proposing a cut in income tax for both businesses and individuals to help stimulate the economy amid record crude oil prices and a global economic slowdown.

The committee proposes the rate for businesses to be a flat 28 percent in 2009 and 25 percent in 2010, lower than the 35 percent rate set under existing regulations, the head of the House's special committee on the bill, Melchias Markus Mekeng, said.

He said lawmakers expected the bill to be "business-friendly," but that it would still be subject to further government deliberation.

"The new rates are expected to stimulate companies to expand businesses," he said, adding that the government would be allowed to further reduce the rate to as low as 25 percent for next year.

Dividend tax, which currently stands at 15 percent, would be eliminated too, Markus added, while the House was also working to raise the taxable income threshold for small- and medium-sized businesses from the current Rp 1.5 billion to Rp 2.4 billion.

The committee also seeks to revise almost all individual taxes in an effort to protect the purchasing power of low- and middle-income earners.

The committee proposes the tax rate for individuals in the Rp 13.2 million to Rp 50 million per year income bracket to be 5 percent starting next year. Currently, the 5 percent rate is subjected to individuals making between Rp 13.2 million and Rp 25 million per year.

The 13.2 million figure is called the taxable income threshold, meaning that a person earning less than that is exempted from paying income tax.

The threshold too, Markus said, would be raised, although the House and the government still differed on the size of the increase.

The government, he said, suggested a rise to Rp 15.86 million, although the committee proposed a figure of between Rp 24 million and Rp 30 million.

Marcus said both parties would continue to try to bridge the gap during upcoming hearing sessions.

Both the government and lawmakers have been seeking to raise the taxable income threshold to reduce to help people cope with surging consumer prices triggered by the rising prices of fuels and main commodities, said committee member Dradjad H. Wibowo.

If the bill failed to introduce the revised threshold, Marcus said, blue-collar workers whose minimum wage was about Rp 1 million per month would be burdened "as the government is likely to raise the minimum wage for blue-collar workers next year."

With the salary rise, blue-collar workers will have to pay tax, which will reduce their earnings and, in turn, their purchasing power, he added.

Director general of taxation Darmin Nasution earlier said the rise in tax threshold would cause the state a potential annual loss of Rp 39 trillion.

Source: The Jakarta Post, Tue, 06/10/2008 10:21 AM

Bill Proposes Tax Refunds for Foreigners

2008-08-04T09:35:00.001+07:00

Lawmakers in August will begin deliberating a bill on the value added tax, the sales tax on luxury goods and a tax refund scheme for foreign tourists shopping here.

The bill calls for the ceiling rates of the luxury tax to be raised from the current 75 percent to 200 percent. The floor rate would remain at 10 percent, said Vera Febyanthy, head of the House's working committee for the bill, on Monday.

The bill does not, however, set clear standards or definitions on which goods are considered luxury items, she added.

"We will ask the government to provide definitions of luxury items. It must categorize which goods would be liable to the high tax," Vera said.

Yachts, big motorcycles and some cars are considered luxury items in the bill, she added.

However, she said, the government should not impose high taxes on electronic goods such as televisions, which could now be classified as a basic need.

In February, the Directorate General of Taxation cut the 20 percent luxury tax on certain electronic goods to 10 percent.

Also in the bill, the directorate general is proposing a tax refund scheme for foreign tourists shopping in Indonesia similar to tax refund schemes used in other countries, including Singapore.

Visitors to Singapore can claim a refund on the goods and services tax (GST) paid on purchases. To claim the refund, tourists must make their purchases from participating stores.

"The Directorate General of Taxation will need to work with the Directorate General of Immigration for this to happen," Vera said.

While the Directorate General of Taxation would suffer losses from the reduction in tax income, Vera said, it would reap profits by increasing the income tax of businesses offering tax refunds.

Vera said the bill was expected to be finalized by the end of the year and could be implemented next year with the bill on income tax.

Source: The Jakarta Post, Fri, 08/01/2008 12:34 PM

Free Fiscal May Take Effect January 1, 2009

2008-08-04T09:26:00.002+07:00

The Tax Office on Tuesday said it would implement free fiscal on Jan. 1, 2009 for Indonesian citizens who have tax identity card (NPWP).

"We will free the fiscal fee on Jan. 1, 2009 for Indonesian citizens with the NPWP. We expect to exempt all Indonesian citizens from the fiscal fee on Jan. 1, 2011," Tax Office
director general Darmin Nasution said.

Fiscal fee is currently applied to Indonesian citizens travelling overseas.

The Tax Office is intensifying efforts to force Indonesian citizens to posses the NPWP. (***)

Source: The Jakarta Post, June 24, 2008

Visa on Arrival, Fiscal Tax

The nationals of many countries have, since 2004, been required to pay a small fee to obtain a tourist visa to enter Indonesia, called Visa On Arrival.

Meanwhile Indonesian citizens and foreigners employed in Indonesia are required to pay a fee of one million rupiah (about $110) each time they leave the country. The fee, called Fiscal Tax, is meant to be an advance payment on that person’s income tax for the next year. Technically citizens who have paid it can claim it back on their tax return, but this is rarely done as many claim that doing so invites the attention of tax auditors.

Dividend Tax Rate Set at 10% to Up Stock Market Investment

2008-08-03T09:49:00.000+07:00

Dividend tax will be set at 10 percent at the highest, half of the current rate of 20 percent, the latest deliberation on the income tax bill reveals.

"The dividend tax rate will be 10 percent at its maximum," Finance Ministry Director General of Taxation Darmin Nasution said Thursday after meeting with the working committee overseeing the bill.

Darmin said the government would have the right to determine the exact rate through a government regulation, which would be designed later.

The deliberation is expected to be completed in August, when the House will end its sitting period.

The dividend tax will be imposed on both publicly listed and privately held companies.

On Wednesday, the government and the committee were split over the extent of the cut. The two largest factions -- the Indonesian Democratic Party of Struggle (PDI-P) and the Golkar Party -- wanted the rate cut to 5 percent, while the remaining eight factions and the government wanted the tax set at 10 percent.

The factions also said privately held companies ought to pay out dividends at least once in three years, or be forced to pay out a higher dividend tax.

The chairman of the working committee overseeing the income tax bill, Melchias Markus Mekeng, said the committee had agreed to cancel the three-year pay-out law.

"We made a simulation on the decision and found out it violated a law on limited companies," Melchias said.

He expects a maximum 10 percent dividend tax to boost investment in the stock market.

"People are expected to invest long term because the dividend tax is small," he said.

Source: The Jakarta Post, Fri, 07/04/2008 11:08 AM

TAX PAYMENT

2008-07-16T17:36:00.000+07:00

Tax Payment

The taxpayer has to pay the tax due to the state treasury via Post Office and/or a State Owned Bank or Local Government Owned Bank or any other place of payment stipulated by the Minister of Finance using tax payment slips (it’s called: Surat Setoran Pajak-SSP). (Article 10-paragraph (1) Law No. 28 Year 2007).

1. Payment of Monthly Installment Article 25 Income Tax

For Monthly Article 25 Income Tax Return, the monthly tax installment payment is due no later then 15 days from the end of the month. If the 15^th is a public holiday, Saturday or Sunday, the due date is the following day (Article 9-paragraph (1) Law No. 28 Year 2007).

The amount of monthly installment which should be paid by taxpayer shall be equal to the tax due according to the annual income tax return for the preceding year, deducted by income tax under Article 21, 22, 23, and 24; then divided by 12 (twelve) or the number of months for part of the tax year. For the months before the due date of the annual income tax return (January-February), the amount of monthly Article 25 income tax shall be equal to such amount paid in the last month (December) of the preceding tax year.

For an individual taxpayer who is conducting a business or is an independent professional an has several places of business, the monthly Article 25 income tax payable in the current tax year shall be 1 % (one percent) of the monthly gross turnover from each place of business (Section 3 of Circular Letter No.: SE-14/PJ.41/2002 dated 7 August 2002).

For a new taxpayer who is conducting a business or is an independent professional, the monthly Article 25 income tax shall be equal to the income tax liability calculated using the normal tax rate on annualized net income, divided by 12 (twelve). The amount of that net income is previously deducted by the non-taxable income threshold amount (Article 2 of Minister of Finance Decree No.: 522/KMK.04/2000 dated 14 December 2000).

However, for a new taxpayer other than the above mentioned, the monthly Article 25 income tax shall be equal to the income tax liability calculated at 10% of annualized net income, divided by 12 (twelve). The amount of that net income is previously deducted by the non-taxable income threshold amount (Circular Letter Number SE-31/PJ.4/1995 dated June 21, 1995).

2. Payment of Annual Individual Tax Return Article 29 Income Tax

The tax underpayment based on the annual tax return should be paid by the 25th of the third month after the end of a tax year or part of a tax year, before the annual tax return is filed (Article 9-paragraph (2) Law No. 28 Year 2007).

3. Payment of Tax Assessment

Additional payments required as a result of a Tax Collection Letter (STP), Tax Underpayment Assessment (SKPKB), Additional Tax Underpayment Assessment (SKPKBT), or Tax Correction Notice, Decision Letter on Objection or Appeal should be paid at the latest one month from the date of issuance (Article 9-paragraph (3) Law No. 16 Year 2000).

4. Payment of Exit Tax

An individual taxpayer who travels abroad has to pay exit tax at a counter located at each point of departure from Indonesia through land, sea, and air. The tax is paid at the counter by using an Exit Tax Form or paid at the post office or a bank authorized to receive tax payments on behalf of the Director General of Taxation by using tax payment slip (SSP). (Article 25- paragraph (8) Law No. 17 Year 2000).

TAX RETURN

2008-07-16T17:34:00.001+07:00

Monthly and Annual Income Tax Return

After registering and obtaining the NPWP, a taxpayer has to file the following tax returns:

a. Monthly Article 25 income tax return using tax payment slips (SSP) at the latest 20 days from the end of the month. An individual who is not conducting a business or who is not an independent professional is exempted from filling the monthly returns.

b. Annual individual tax return (Form 1770; Form 1770 S; or Form 1770 SS) at the latest 3 months from the end of a tax year. The form 1770, form 1770 S and form 1770 SS can be obtained from the tax office or from Directorate General of Taxation (DGT) web page: www.pajak.go.id. (Article 3-paragraph (3) Law No. 28 Year 2007).

What the taxpayer should know before completing the tax return:

a. Every taxpayer has to complete the tax return in Bahasa Indonesia using Latin Letters, Arabic numerals, and Rupiah currency, then sign and file it at the tax office where the taxpayer is registered. (Article 3-paragraph (1) and (1) a Law No. 28 Year 2007).

b. A taxpayer has to complete and file a tax return correctly, thoroughly and clearly. The tax return has to be signed. (Article 4-paragraph (1) Law No. 28 Year 2007).

c. Where a tax return is completed and signed by a person other than the taxpayer, a power of attorney must be attached. (Article 4-paragraph (3) Law No. 28 Year 2007).

d. Completion of annual income tax return by taxpayers who have to maintain bookkeeping records must be accompanied by financial statements in the form of balance sheet and income statement as well as other information required to calculate the amount of taxable income.

(Article 4-paragraph (4) Law No. 28 Year 2007).

e. For filing of annual income tax return, a taxpayer has to attach a statement of assets and liabilities.

f. The filing of a tax return may be done by registered mail through the Post Office or by such other means as regulated by the decree of the Director General of Taxation. (Article 6-paragraph (2) Law No. 28 Year 2007).

TAX IDENTIFICATION NUMBER or NPWP - DEREGISTRATION

2008-07-16T17:32:00.000+07:00

1. What if the taxpayer is leaving Indonesia permanently or has applied for an Exit Permit Only to the Immigration Office?

A taxpayer should state in writing that an Exit Permit Only (EPO) will be forwarded to the tax office where he is registered, so that the tax office will not issue a tax collection letter due to non filling or non payment of the monthly Article 25 income tax.

2. The following are to be attached when submitting the deregistration form (now known as registration and change of data form):

a. Exit Permit Only (EPO)

b. Statement from the employer stating that a taxpayer’s contract in Indonesia has ended (for a taxpayer who is an employee)

c. Cancellation of business permit letter (for a tax payer who is conducting business or is an independent professional)

d. Power of attorney (if his/her deregistration process is handled by another party)

e. Original copy of taxpayer identification number card

Before forwarding the EPO, the taxpayer should fulfill other tax obligation such as:

a. Pay any tax due which has not been paid.

b. File an annual individual tax return for the year of departure, by providing a close approximation of his/her global income.

c. File applications for deregistration of NPWP.

Government Should Not Upset Over Lower Tax Receipts

2008-07-06T07:50:00.000+07:00

(5/7/2007) The government must not go "berserk" in responding to its decreased income from taxes because the decline is a consequence of the lingering economic crisis and the wretched mentality of its tax collecting personnel, an economic observer here said.

The setback also would not have happened if the government had not set overambitious income targets, Jhon Tafbu Ritonga, an economist at the University of North Sumatra (USU), said on Wednesday.

He said in the 10 years since the 1997 monetary crisis, the number of companies in Indonesia had fallen by 1.5 million. According to economic census figures, there were 16.4 million national companies in Indonesia in 1996 but the number had dropped to 12.5 million by 2006.

What was growing today were non-permanent busineses which numbered 9.8 million and were initiated by people just to survive, he said.

"These non-permanent enterprises generally have difficulty supporting themselves financially, let alone pay taxes," he added.

It was also possible, the decrease had happened because tax collecting officers had been working more for personal gain than the state`s interest by colluding with taxpayers.

"The lower income from taxes must be accepted wisely and not cause the government to go berserk and prompt it to make all sorts of new regulations and create more revenue sources that will eventually only burden businessmen and the people," he said.

What the directorate general of taxes should do following the drop in income was to reconsider its income targets and evaluate its working system, including the mentality of its tax collectors, according to Jhon.

"So far, the government has been pursuing its tax income targets with the sole purpose of raising money without regard of taxpayers` financial capabilty," said Jhon who is also dean of USU`s economic faculty.

Actually, the government should follow the example of chicken breeders who, in order to be assured of growing egg production, take good care of their chickens, Jhon said.

sources : antara

CATEGORY OF AN INDIVIDUAL TAXPAYER

2008-07-03T21:16:00.000+07:00

1. Resident

A resident tax subject shall be:

- An individual residing in Indonesia or

- An individual who is present in Indonesia for more than 183 days in any 12 month period, or

- An individual who is present in Indonesia in a tax year with an intention to reside in Indonesia.

2. Non-Resident

A non-resident tax subject shall be:

An individual not residing in Indonesia or who is present in Indonesia for not more than 183 days in any 12 month period.

- who is conducting a business or carrying out activities through a fixedbased in Indonesia.

- who derives income from Indonesia other than from conducting business or carrying out activities through a fixed based in Indonesia.

A taxpayer is an individual or a body which, pursuant to the provisions in the tax law, is required to fulfill tax obligations, including tax collection or tax withholding of certain taxes. (Article 1 paragraph (1) Law No. 28 Year 2007).

TAX IDENTIFICATION NUMBER or NPWP - REGISTRATION

2008-07-03T08:08:00.002+07:00

Tax Identification Number (in Indonesian terms: Nomor Pokok Wajib Pajak-NPWP)

1. What is a Tax Identification Number?

The Tax Identification Number (NPWP) is a number issued to taxpayers by the tax office to identify taxpayers and to assist them in fulfilling their tax obligations. (Article 1 - paragraph (1) Law No. 28 Year 2007).

2. How to get an NPWP

Taxpayer shall be obligated to register at the tax office in the district in which the taxpayer reside (Article 2-paragraph (1) Law No. 28 Year 2007) by submitting the following documents:

a. Completed the Registration and change of data form (You can get this form in here)

b. Copy of passport (all the pages in your passport)

c. Copy of limited stay permit card (KITAS)

d. Copy of work permit (for taxpayer who is an employee)

e. Copy of tax identification number of the employer (for taxpayer who is an employee)

f. Power of attorney (if his/her registration process is done by another party)

g. Copy of business permit (for taxpayer who is conducting business or an independent professional)

An individual taxpayer who is an entrepreneur as mentioned in the Circular Letter of Director General of Taxation No.: SE-14/PJ.41/2002 is an individual who has several places of business activities. He/she is obligated to register in his/her place of business activities as follows:

a. A taxpayer who has several places of business activities in one operational area of the tax office must register each place of business in each related tax office.

b. A taxpayer who has several places of business activities located in the districts of several tax offices must register each place of business in each related tax office.

3. What if taxpayer does not want to register?

a. The Director General of Taxation has the authority to issue an NPWP officially. (Article 2-paragraph (4) Law No. 16 Year 2000)

b. If a taxpayer fails to register intentionally resulting in loses to the state revenue, he/she shall be sentenced to imprisonment for period not exceeding 6 years and shall be subject to a fine for an amount not exceeding four times the tax unpaid/underpaid. (Article 39-paragraph (1) Law No. 28 Year 2007)

4. What if there is a change in taxpayer’s data?

A taxpayer may inform the tax office of any change in his data (such as change of address, change of employer, etc.) by filling the registration and change of data form at the tax office where the taxpayer is registered.

FINAL EXAM RESULTS - PRAKTEK PERPAJAKAN SEMESTER GENAP 2007/2008

2008-07-02T09:35:00.000+07:00

The Final Examination Results (Semester Genap 2007/2008) for Mata Kuliah Praktek Perpajakan Section A; access in here.

UJIAN SERTIFIKASI KONSULTAN PAJAK (USKP)

2008-07-01T17:11:00.000+07:00

Telah dibuka pendaftaran untuk mengikuti USKP sisipan pada bulan Agustus 2008, khusus untuk Brevet A.
Pendaftaran mulai dibuka tanggal 1 Juli 2008 s.d. 31 Juli 2008 (mulai pukul 09.00 WIB s.d. 16.00 WIB).
Ujian akan diselenggarakan pada tanggal 26 Agustus 2008 s.d. 28 Agustus 2008.
Biaya Pendaftaran sebesar Rp 300.000
Biaya Ujian sebesar Rp 2.000.000
Informasi mengenai pendaftaran serta pendaftarannya dapat menghubungi alamat-alamat sebagai berikut:

Jakarta
Gedung Graha TTH
Jl. Guru Mughni No. 106 Karet Kuningan - Jakarta Selatan
Telp 021-522 0676 dan 021-522 0680
Faks 021-521-2462 (CP: Ajeng/Ika)

Bandung
Jl. Buah Batu No. 189 Bandung - 40264
Telp 022-732 1885/7310968
Faks 022-730 7860

Medan
Komplek Glugur Point Blok B No. 12 A Medan - 20215
Telp 061-662 5747

Surabaya
Jl. Suko Manunggal Jaya VI No. 2 Surabaya
Telp 031-7312187

Yogyakarta
Jl. Bumijo No. 32 Yogyakarta
Telp 0274-547 388

Semarang
Jl. Abdulrahman Saleh No. 31 Semarang-50149
Telp. 024-7608789
Faks 024-7604671 (CP: Santi)

TATA CARA PENYAMPAIAN ATAU PEMBETULAN SPT DAN PERSYARATAN WAJIB PAJAK YANG DAPAT DIBERIKAN PENGHAPUSAN SANKSI ADMINISTRASI (SUNSET POLICY)

2008-07-01T13:56:00.000+07:00

Peluang untuk melakukan penghematan pembayaran pajak di tahun 2008. Fasilitas Penghapusan sanksi administrasi berupa bunga bagi Wajib Pajak yang melakukan pembetulan SPT Tahunan yang mengakibatkan pajak yang dibayar menjadi lebih besar yang dikenal dengan istilah ”sunset policy”.

Dengan adanya ketentuan Pasal 37A Undang-Undang Nomor 6 Tahun 1983 tentang Ketentuan Umum dan Tata Cara Perpajakan sebagaimana telah beberapa kali diubah terakhir dengan Undang-Undang Nomor 28 Tahun 2007 (UU KUP) maka Wajib Pajak yang melakukan pembetulan SPT Tahunan PPh akan mendapatkan fasilitas pembebasan (berupa pengurangan atau penghapusan) dari sanksi administrasi bunga. Pemberian fasilitas pengurangan atau penghapusan sanksi ini diberikan kepada:

a. Wajib Pajak (baik Orang Pribadi maupun Badan) yang menyampaikan SPT Tahunan PPh sebelum tahun pajak 2007 dalam jangka waktu 1 (satu) tahun setelah berlaku Undang-Undang Nomor 28 Tahun 2007; atau

b. Wajib Pajak Orang Pribadi yang secara sukarela mendaftarkan diri untuk mendapatkan NPWP serta menyampaikan SPT Tahunan PPh sebelum tahun pajak 2007

yang mengakibatkan pajak yang masih harus dibayar menjadi lebih besar.

Terhadap Wajib Pajak yang telah melakukan pembetulan SPT Tahunan PPh maupun yang secara sukarela telah mendaftarkan diri untuk mendapatkan NPWP dan menyampaikan SPT Tahunan PPh sebelum tahun pajak 2007 tidak akan dilakukan pemeriksaan pajak terhadap SPT Tahunan yang disampaikannya tersebut kecuali jika SPT yang disampaikan tersebut menyatakan tidak benar atau menyatakan lebih bayar.

Ketentuan ini diatur lebih lanjut dalam Pasal 33 Peraturan Pemerintah Nomor 80 Tahun 2007 serta Peraturan Menteri Keuangan Nomor 18/PMK.03/2008. Dalam kedua ketentuan ini, tidak mengatur secara detil pemberian fasilitas ini. Isi dari kedua aturan pelaksanaan tersebut hanya menjabarkan kalimat dari kedua ayat dalam Pasal 37A UU KUP tanpa adanya penjelasan detil teknis pelaksanaan dari Pasal 37 A tersebut. Dalam kedua aturan pelaksanaan ini hanya menjelaskan bahwa penghapusan sanksi administrasi berupa bunga diberikan dengan cara tidak menerbitkan STP.

Sebagai akibat masih belum mengatur secara detil tentang proses pemberian fasilitas Pasa 37A UU KUP ini, maka Menteri Keuangan menerbitkan Peraturan Menteri Keuangan Nomor 66/PMK.03/2008 tanggal 29 April 2008 yang menggantikan Peraturan Menteri Keuangan Nomor 18/PMK.03/2008. Beberapa hal yang diatur dalam Peraturan Menteri Keuangan Nomor 66/PMK.03/2008 ini adalah:

1. a. Wajib Pajak orang pribadi yang secara sukarela mendaftarkan diri untuk memperoleh NPWP dalam tahun 2008 dan menyampaikan SPT Wajib Pajak Orang Pribadi (termasuk pembayaran yang dilakukan sendiri terkait dengan PPh Pasal 29, PPh Pasal 4 ayat (2), dan/atau PPh Pasal 15) untuk tahun pajak tahun 2007 dan sebelumnya, diberikan penghapusan sanksi administrasi berupa bunga atas pajak yang tidak atau kurang dibayar.

b. Wajib Pajak orang pribadi yang dapat diberikan penghapusan sanksi administrasi ini harus memenuhi syarat tidak sedang dilakukan Pemeriksaan Bukti Permulaan, penyidikan, penuntutan atau pemeriksaan di pengadilan atas tindak pidana di bidang perpajakan; menyampaikan SPT Tahunan Tahun Pajak 2007 dan sebelumnya terhitung sejak memenuhi persyaratan subjektif dan objektif paling lambat tanggal 31 Maret 2009; serta melunasi seluruh pajak yang kurang dibayar yang timbul akibat penyampaian SPT Tahunan tersebut.

c. Data dan informasi yang tercantum dalam SPT Tahunan PPh Orang Pribadi yang disampaikan tersebut tidak dapat digunakan sebagai dasar untuk menerbitkan surat ketetapan pajak atas pajak lainnya.

d. Terhadap SPT Tahunan PPh yang disampaikan ini tidak dilakukan pemeriksaan, kecuali terdapat data atau keterangan yang menyatakan bahwa SPT Tahunan PPh tersebut tidak benar, atau SPT Tahunan PPh menyatakan lebih bayar atau rugi. Atas pemeriksaan ini, DJP dapat menerbitkan surat ketetapan pajak dan/atau Surat Tagihan Pajak atas seluruh kewajiban perpajakan.

2. a. Wajib Pajak yang dalam tahun 2008 menyampaikan pembetulan SPT Tahunan PPh Orang Pribadi atau Badan sebelum tahun pajak 2007 (termasuk pembayaran yang dilakukan sendiri terkait dengan PPh Pasal 29, PPh Pasal 4 ayat (2), dan/atau PPh Pasal 15) yang mengakibatkan pajak yang masih harus dibayar menjadi lebih besar, diberikan penghapusan sanksi administrasi berupa bunga atas keterlambatan pelunasan kekurangan pembayaran pajak.

b. Wajib Pajak yang dapat diberikan penghapusan sanksi administrasi ini harus memenuhi syarat:

- telah memiliki NPWP sebelum tanggal 1 Januari 2008;

- terhadap SPT Tahunan PPh yang dibetulkan belum diterbitkan surat ketetapan pajak;

- terhadap SPT Tahunan PPh yang dibetulkan belum dilakukan pemeriksaan atau dalam hal sedang dilakukan pemeriksaan, Pemeriksa Pajak belum menyampaikan Surat Pemberitahuan Hasil Pemeriksaan;

- telah dilakukan Pemeriksaan Bukti Permulaan, tetapi Pemeriksaan Bukti Permulaan tersebut tidak dilanjutkan dengan tindakan penyidikan karena tidak ditemukan adanya Bukti Permulaan tentang tidak pidana di bidang perpajakan;

- tidak sedang dilakukan Pemeriksaan Bukti Permulaan, penyidikan, penuntutan, atau pemeriksaan di pengadilan atas tindak pidana di bidang perpajakan;

- menyampaikan Surat Pemberitahuan Tahunan Tahun Pajak 2006 dan sebelumnya paling lambat tanggal 31 Desember 2008; dan

- melunasi seluruh pajak yang kurang dibayar yang timbul akibat dari penyampaian SPT Tahunan tersebut sebelum SPT PPh Pembetulan disampaikan.

c. Dalam hal Wajib Pajak membetulkan SPT Tahunan PPh yang sedang dilakukan pemeriksaan yang juga meliputi jenis pajak lainnya, berlaku ketentuan:

- pemeriksaan tersebut dihentikan kecuali untuk pemeriksaan terhadap SPT atas pajak lainnya yang menyatakan lebih bayar, atau

- pemeriksaan tersebut tetap dilanjutkan berdasarkan pertimbangan Direktur Jenderal Pajak.

d. Dalam hal Wajib Pajak membetulkan SPT Tahunan PPh yang tidak sedang dilakukan pemeriksaan, namun atas SPT jenis pajak lainnya untuk periode yang sama sedang dilakukan pemeriksaan, berlaku ketentuan sebagai berikut:

- pemeriksaan tersebut dihentikan, kecuali untuk pemeriksaan terhadap SPT atas pajak lainnya yang menyatakan lebih bayar, atau

- pemeriksaan tersebut tetap dilanjutkan berdasarkan pertimbangan Direktur Jenderal Pajak.

e. Dalam hal SPT Tahunan PPh yang dibetulkan menyatakan Lebih Bayar, pembetulan SPT Tahunan PPh dianggap sebagai pencabutan atas permohonan pengembalian kelebihan pembayaran pajak yang tercantum dalam SPT Tahunan PPh yang dibetulkan.

f. Data dan informasi yang tercantum dalam pembetulan SPT Tahunan PPh yang disampaikan tersebut tidak dapat digunakan sebagai dasar untuk menerbitkan surat ketetapan pajak atas pajak lainnya.

g. Terhadap SPT Tahunan PPh yang disampaikan ini tidak dilakukan pemeriksaan, kecuali terdapat data atau keterangan yang menyatakan bahwa SPT Tahunan PPh tersebut tidak benar. Dalam hal terhadap pembetulan SPT Tahunan PPh yang telah dilakukan pemeriksaan karena terdapat data atau keterangan yang menyatakan bahwa SPT Tahunan PPh tersebut tidak benar, DJP dapat menerbitkan surat ketetapan pajak dan/atau Surat Tagihan Pajak atas seluruh kewajiban perpajakan.

3. Ketentuan lebih lanjut mengenai tata cara penyampaian, pengadministrasian serta penghapusan sanksi administrasi sehubungan dengan penyampaian dan/atau pembetulan SPT Tahunan PPh, diatur dengan Peraturan Direktur Jenderal Pajak.

4. Ketentuan ini mencabut Peraturan Menteri Keuangan Nomor 18/PMK.03/2008 dan menyatakan bahwa aturan tersebut tidak berlaku lagi.

5. Ketentuan ini mulai berlaku tanggal 1 Januari 2008.

PEMBAHASAN SOAL USKP

2008-07-01T13:25:00.002+07:00

SOAL USKP PERIODE MEI 2007
PPh ORANG PRIBADI BREVET C

SOAL II ESSAY (Bobot 30)

1. Mr. Patrick Warga Negara Inggris, bekerja di Indonesia sebagai perwakilan organisasi Safe World di mana Indonesia sebagai salah satu anggotanya dan Safe World adalah salah satu organisasi internasional yang ditetapkan menteri keuangan pada tahun 2006. Selama tahun 2006 Mr. Patrick menerima gaji per bulan Rp25.000.000 dan tunjangan Rp7.000.000, bulan Desember ia memperoleh bonus Rp50.000.000. Pada bulan Agustus 2006, Mr. Patrick membantu sebuah EO mendatangkan penyanyi terkenal dari Inggris, Jammie, untuk melakukan pentas musik di Jakarta dan Surabaya. Atas bantuannya ini ia dibayakan Rp70.000.000 oleh EO.

Analisa kasus di atas, dan hitung pajak terutang bila Mr. Patrick memiliki kewajiban membayar pajak di Indonesia.

2. Pak Rondiawan (K/0) NPWP: 05.475.875.6-023.000 memiliki perusahaan perorangan dan penghasilan bersih tahun 2006 Rp100.000.000. Isteri Pak Rondiawan, Ibu Shintawati bekerja sebagai manajer di PT Ayu Sejahtera dan memperoleh gaji selama setahun Rp50.000.000 dan telah dipotong PPh Pasal 21 oleh PT Ayu Sejahtera, selain itu Ibu Shintawati membuka boutique design di rumah yang dikelola oleh karyawatinya. Selama tahun 2006 memperoleh penghasilan bersih Rp75.000.000. Dalam perkawinan tersebut mereka mengadakan perjanjian pemisahan harta dan penghasilan secara tertulis.

Analisis kasus di atas, hitung PPh terutang dalam SPT Tahunan PPh OP Pak Rondiawan tahun 2006 di samping itu Pak Rondiawan dan Ibu Shinta mengeluarkan zakat penghasilan 2,5% dan disalurkan ke baitul maal yang telah ditetapkan oleh Menteri Agama.

3. Sebagai seorang Milyarder, Bapak Sugih Tenan menghibahkan sebuah Pom Bensin dan restaurant kepada cucu tunggalnya Bejo Banget yang baru berumur 6 tahun. Penghasilan Pom Bensin dan restaurant per tahun rata-rata Rp1.500.000.000.

Jelaskan apa saja landasan juridis fiskal atas penghasilan pom bensin tersebut.

PEMBAHASAN:

1. Landasan Hukum:

- Menurut Pasal 3 huruf d UU PPh, ditegaskan bahwa pejabat-pejabat perwakilan organisasi internasional yang ditetapkan dengan Keputusan Menteri Keuangan dengan syarat bukan warga negara Indonesia dan tidak menjalankan usaha atau kegiatan atau pekerjaan lain untuk memperoleh penghasilan dari Indonesia tidak termasuk sebagai Subjek Pajak.

- Menurut Pasal 4 butir b Peraturan Direktur Jenderal Pajak nomor PER-15/PJ/2006 ditegaskan bahwa ”pejabat perwakilan organisasi internasional sebagaimana dimaksud dalam Keputusan Menteri Keuangan nomor 574/KMK.04/2000 tentang Organisasi-organisasi Internasional dan Pejabat Perwakilan Organisasi Internasional yang Tidak Termasuk Sebagai Subjek Pajak Penghasilan, sebagaimana telah beberapa kali diubah terakhir dengan Keputusan Menteri Keuangan nomor 601/KMK.03/2005, dengan syarat bukan warga negara Indonesia dan tidak menjalankan usaha atau kegiatan atau pekerjaan lain untuk memperoleh penghasilan dari Indonesia, adalah tidak termasuk sebagai penerima penghasilan yang dipotong PPh Pasal 21 dan atau PPh Pasal 26.”

Analisis Kasus:

Jika selama tahun 2006 Mr. Patrick hanya mendapatkan penghasilan semata-mata dari jabatannya sebagai perwakilan organisasi Safe World (yang diperolehnya selama tahun 2006 terdiri dari gaji perbulan Rp25.000.000 dan tunjangan perbulan Rp7.000.000 serta bonus Rp50.000.000), maka Mr. Patrick bukan merupakan Subjek Pajak dan penghasilan yang diterimanya ini tidak termasuk sebagai penghasilan yang dipotong PPh Pasal 21/26.

Namun karena pada bulan Agustus 2006, Mr. Patrick menerima penghasilan dari sebuah EO (dari soal dapat ditafsirkan bahwa EO ini adalah subjek pajak dalam negeri) atas jasanya membantu mendatangkan penyanyi terkenal dari Inggris untuk pentas di Jakarta dan Surabaya sebesar Rp70.000.000, maka Mr. Patrick otomatis menjadi Subjek Pajak. Maka Mr. Patrick harus memenuhi kewajiban pajak dengan cara mendaftarkan diri untuk mendapatkan NPWP.

Asumsi Jawaban:

Pemotongan yang dilakukan oleh pihak pemberi kerja:

- Saat menerima penghasilan dari organisasi Safe World, karena pemberi kerja bukan pemotong pajak atas penghasilan anggotanya serta penghasilan yang diterima Mr. Patrick adalah penghasilan yang tidak termasuk objek pemotongan PPh Pasal 21/26 maka, penghasilan tersebut tidak dipotong PPh Pasal 21 atau 26.

- Saat menerima penghasilan dari EO (asumsi adalah pemotong PPh Pasal 21/26), maka penghasilan ini merupakan objek pemotongan PPh Pasal 21 dan terutang PPh Pasal 21 sebesar (hal 44), asumsi bahwa Mr. Patrick telah memenuhi kewajiban pajak sebagai subjek pajak dalam negeri:

Rp25.000.000 x 5% = Rp 1.250.000

Rp25.000.000 x 10% = 2.500.000

Rp20.000.000 x 15% = 3.000.000

Jumlah PPh Pasal 21 terutang Rp 6.750.000

Seandainya jika di soal disebutkan bahwa Mr. Patrick telah mendaftarkan diri memiliki NPWP, maka seluruh penghasilan yang diterimanya tahun 2006 ini harus dihitung kembali dan dicari PPh terutang yang sebelumnya dikurangkan dahulu dengan PTKP. Namun dalam soal ini tidak diketahui PTKP, maka jawaban dapat diasumsikan.

2. Penerapan tarif untuk masing-masing suami dan isteri adalah sebagai berikut:

Penghasilan Neto suami

Rp 100.000.000,00

Penghasilan Neto isteri

Rp 50.000.000,00

Rp 75.000.000,00 +/+

Penghasilan Neto gabungan

Rp 225.000.000,00

Zakat 2,5%

Rp 5.625.000,00

PTKP : K/I/0

Rp 27.600.000,00 -/-

Penghasilan Kena Pajak

Rp 191.775.000,00

PPh terutang gabungan (suami dan isteri) :

5 % x Rp 25.000.000,00

Rp 1.250.000,00

10% x Rp 25.000.000,00

Rp 2.500.000,00

15% x Rp 50.000.000,00

Rp 7.500.000,00

25% x Rp 91.775.000,00

Rp 22.943.750,00 +/+

Rp 34.193.750,00

Untuk SPT suami

PPh terutang diisi

100.000.000,00

225.000.000,00

Rp 34.193.750,00 =

Rp 15.197.222,22

Untuk SPT isteri

PPh terutang diisi

125.000.000,00

225.000.000,00

Rp 34.193.750,00 =

Rp 18.996.527,78

Buku Petunjuk Pengisian SPT 1770 hal 39-40

3. Analisa Landasan juridis fiskal:

Hibah tersebut tidak termasuk objek pajak jika harta hibahan yang diterima oleh keluarga dalam garis keturunan lurus satu derajat dan pengusaha kecil sebagaimana dimaksud dalam Keputusan Menteri Keuangan No. 604/KMK.04/1994 tanggal 21 Desember 1994 sepanjang tidak dalam rangka hubungan kerja, hubungan usaha, hubungan kepemilikan atau hubungan penguasaan antara pihak-pihak yang bersangkutan. (Pasal 4 ayat (3) huruf a angka 1 UU PPh).

Karena hibah ini dari kakek ke cucu (tidak berada dalam keturunan lurus satu derajat), maka hibah ini tidak termasuk dalam ketentuan Pasal 4 ayat (3).

Atas penghasilan dari pom bensin ini akan ditanggung oleh subjek pajak Bejo Banget, sehingga Bejo Banget harus memenuhi segala kewajiban perpajakannya, walaupun dia baru berumur 6 tahun tapi telah memenuhi kewajiban pajak subjektif dan objektif.

(c) Jawaban soal ini dibuat oleh Syafrianto sesuai dengan asumsi dan pendapat pribadi.
Dilarang untuk mengutip, memperbanyak dan menyebarluaskan materi pembahasan ini tanpa seijin penulis.

Untuk mendapatkan lebih banyak lagi informasi dan pembahasan soal mengenai USKP, silakan akses di sini.

MENJADI KONSULTAN PAJAK (TO BE A TAX CONSULTANT)

2008-07-01T13:20:00.000+07:00

Konsultan Pajak (Tax Consultant)

Profesi konsultan pajak adalah profesi yang dijalankan oleh profesional yang memberikan jasa profesional kepada Wajib Pajak Konsultan pajak adalah setiap orang yang dalam lingkungan pekerjaannya secara bebas memberikan jasa profesional kepada Wajib Pajak dalam melaksanakan hak dan memenuhi kewajiban perpajakannya sesuai dengan peraturan perundang-undangan perpajakan yang berlaku.

Syarat menjadi Konsultan Pajak

1. Warga Negara Indonesia

2. Bertempat tinggal di Indonesia

3. Memiliki serendah-rendahnya ijazah Strata Satu (S-1) atua setingkat dengan itu dari Perguruan Tinggi Negeri dan Perguruan Tinggi Swasta yang terakreditasi, kecuali bagi pensiunan pegawai Direktorat Jenderal Pajak ditentukan oleh Direktur Jenderal Pajak.

4. Tidak terkait dengan pekerjaan atau jabatan pada Pemerintah/Negara atau Badan usaha Milik Negara/Daerah.

5. Berkelakuan baik yang dibuktikan dengan surat keterangan dari instansi yang berwenang.

6. Memiliki Nomor Pokok Wajib Pajak.

7. Memenuhi kewajiban perpajakan sesuai dengan ketentuan peraturan perundang-undangan perpajakan.

8. Bersedia menjadi anggota Ikatan Konsultan Pajak Indonesia dan tunduk pada Kode Etik Ikatan Konsultan Pajak Indonesia.

9. Memiliki Sertifikat Konsultan Pajak.

Hak dan Kewajiban Konsultan Pajak

Hak Konsultan Pajak

1. Konsultan Pajak yang telah memiliki Izin Praktek Konsultan Pajak Sertifikat A berhak memberikan jasa di bidang perpajakan kepada Wajib Pajak Orang Pribadi dalam melaksanakan hak dan memenuhi kewajiban perpajakannya, kecuali Wajib Pajak yang berdomisili di negara yang mempunyai persetujuan penghindaran pajak berganda dengan Indonesia.

2. Konsultan Pajak yang telah memiliki Izin Praktek Konsultan Pajak Sertifikat B berhak memberikan jasa di bidang perpajakan kepada Wajib Pajak Orang Pribadi dan Badan dalam melaksanakan hak dan memenuhi kewajiban perpajakannya, kecuali kepada Wajib Pajak Penanaman Modal, Bentuk Usaha Tetap, dan yang berdomisili di negara yang mempunyai persetujuan penghindaran pajak berganda dengan Indonesia.

3. Konsultan Pajak yang telah memiliki Izin Praktek Konsultan Pajak Sertifikat C berhak memberikan jasa di bidang perpajakan kepada Wajib Pajak Orang Pribadi dan Badan dalam melaksanakan hak dan memenuhi kewajiban perpajakannya.

Kewajiban Konsultan Pajak

1. Konsultan Pajak wajib memenuhi semua ketentuan peraturan perundang-undangan perpajakan.

2. Konsultan Pajak wajib menyampaikan kepada Wajib Pajak agar melaksanakan hak dan kewajiban perpajakan sesuai dengan peraturan perundang-undangan perpajakan.

3. Dalam mengurus pelaksanaan hak dan pemenuhan kewajiban perpajakan dari Wajib Pajak, setiap Konsultan Pajak wajib:

4. memiliki Izin Praktek Konsultan pajak yang masih berlaku

5. memiliki surat kuasa khusus dari Wajib Pajak.

6. Konsultan Pajak wajib mematuhi prosedur dan tata tertib kerja yang berlaku di lingkungan Direktorat Jenderal Pajak dan dilarang melakukan tindakan-tindakan yang merugikan kepentingan negara.

7. Konsultan Pajak yang telah memiliki Izin Praktek Konsultan Pajak Sertifikat wajib mengikuti penataran/pendidikan penyegaran perpajakan paling sedikit 1 (satu) kali dalam setahun yang diselenggarakan oleh Direktorat Jenderal Pajak dan atau Ikatan Konsultan Pajak Indonesia.

8. Konsultan Pajak wajib memenuhi Anggaran Dasar/Anggaran Rumah Tangga dan Kode Etik Ikatan Konsultan Pajak Indonesia.

9. Konsultan Pajak wajib membuat Laporan Tahunan yang berisi jumlah dan keterangan mengenai Wajib Pajak yang telah diberikan jasa di bidang perpajakan dan melampirkan fotokopi Sertifikat Penataran/Pendidikan Penyegaran Perpajakan.

10. Laporan Tahunan disampaikan kepada Direktur Jenderal Pajak paling lama akhir bulan April tahun takwin berikutnya.

11. Konsultan Pajak dapat mengajukan permohonan penundaana penyampaian laporan tahunan secara tertulis untuk paling lama 3 (tiga) bulan.

Materi Penguasaan bagi Konsultan Pajak

Brevet A : Pajak Orang Pribadi

1. Pancasila

2. PPh Orang Pribadi

3. PPh Pasal 21 dan SPT 1721

4. PPh Pasal 22/23/26

5. PPN dan SPT Masa PPN

6. KUP/PPSP/BPSP

7. BM/PBB/BPHTB

8. Akuntansi Perpajakan

9. SPT PPh Orang Pribadi (1770)

10. Kode Etik Profesi

Brevet B : Pajak Badan

1. Pancasila

2. PPh Badan

3. PPh Pasal 21 dan SPT 1721

4. PPh Pasal 22/23/26

5. PPN

6. KUP/PPSP/BPSP

7. BM/PBB/BPHTB

8. Akuntansi Perpajakan

9. SPT PPh Badan

10. SPT Masa PPN

11. Kode Etik Profesi

Brevet C : Pajak Internasional

1. PPh Badan

2. PPh Pasal 21 dan SPT 1721

3. PPh pasal 22/23/26

4. PPN

5. KUP/PPSP/BPSP

6. Perpajakan Internasional

7. Akuntansi Perpajakan

8. SPT PPh Badan

9. SPT Masa PPN

10. Kode Etik Profesi

Ujian Sertifikasi Konsultan Pajak (USKP)

Ujian Sertifikasi Konsultan Pajak merupakan pintu gerbang bagi para praktisi pajak untuk memperoleh Izin Praktek Konsultan Pajak yang diterbitkan oleh Direktur Jenderal Pajak. Praktisi pajak yang sudah lulus USKP berhak menyandang gelar BKP (Bersertifikat Konsultan Pajak). USKP diselenggarakan oleh Ikatan Konsultan Pajak Indonesia bekerja sama dengan Pusat Pendidikan dan Pelatihan Perpajakan. Sedangkan kurikulum, peraturan, soal ujian, dan metode penilaian USKP diselenggarakan oleh Konsorsium Pengembangan Konsultan Pajak Indonesia. Konsorsium ini adalah suatu kerja sama antara pihak-piahk yang berkepentingan dan terkait dengan Konsultan Pajak Indonesia yang anggotanya terdiri dari unsur-unsur Direktorat Jenderal Pajak, Badan Pendidikan dan Pelatihan Keuangan, Ikatan Konsultan Pajak Indonesia, Perguruan Tinggi Negeri dan Swasta yang terkait dengan pendidikan perpajakan, dan yayasan pendidikan yang mempunyai jurusan ilmu perpajakan.

Kriteria Kelulusan

1. Penilaian hasil ujian untuk setiap mata ujian dilakukan berdasarkan skala 1 (satu) sampai dengan 100 (seratus).

2. Peserta USKP dinyatakan lulus apabila memperoleh nilai paling rendah 60 (enam puluh) untuk setiap mata ujian.

3. USKP diselenggarakan dengan sistem kredit dengan batas mengulang dalam kurun waktu 2 (dua) tahun untuk 1 (satu) tingkatan sertifikat.

All Construction Services Currently Subject to Final Income Tax

2008-05-01T07:26:00.000+07:00

Finally, the rules on the imposition of PPh on the Construction Services has been established by Government Regulation No. 51 Year 2008. This regulation was issued on 20 July 2008. Regulations issued by this, then reinstate the imposition of PPh on the Construction Services into the final without a more discriminating types of contractors who perform services such as Construction is set in the previous Government Regulation (namely Government Regulation No. 140, 2000).

The problem is that Government Regulation No. 51 Year 2008 is retroactive since January 1, 2008, hence the need of extra attention from the business services, construction of the change PPh provisions of the construction of this service.

Summary of government regulation are:

A. Definition of the terms used in this Government Regulation (Article 1):

Construction Services, advisory services is planning construction work; construction services the implementation of the work; advisory services and supervision of construction work.
Construction work is the whole or part of a series of planning activities and / or supervision of the implementation of its work include architectural, civil, mechanical, electrical, environmental and governance each with the utility to realize a building or other physical form.
Planning is the provision of construction services by private persons or entities who stated that professional experts in the field of construction planning services are able to create jobs in the form of physical planning another building.
Implementation is the provision of construction services by private persons or entities who stated that experts in the field of professional services, construction that can organize activities to realize a result of planning a building or other physical forms, including the construction work of consolidating the functions of integrated services in merges planning model , Procurement and construction (enggineering, procurement and construction) and the model of merger planning and development (design and build)
Construction supervision is by giving people a personal service or body of experts which stated that professional services in the areas of construction that is able to implement since the beginning of the work to complete and rendered.
Service users are individuals or agencies, including the form of permanent business, which requires construction services.
Service provider is a person or enterprise including forms of business activities that still provide construction services as well construction planners, construction and implementation, construction supervisors and the subcontractors.
Contract value is the value of construction services listed in a contract construction services overall.

B. On the income from the business tax levied Construction Services Revenue of the final (Article 2).

C. The Rates of the final Income Tax for the Construction Services business consists of (Article 3):

2% (two percent) for the Implementation of Construction conducted by the provider of services that have qualified small business;
4% (four percent) for the implementation of Construction conducted by the provider of services that do not have a business qualifying;
3% (three percent) for the implementation of the construction undertaken by the service providers, other than the provider referred to in point 1 and 2 above [or by service providers who have qualified secondary qualifications or big business];
4% (four percent) for the planning or construction supervision of the construction undertaken by the service providers that have qualified business; and
6% (six percent) for the planning or construction supervision of the construction undertaken by the service providers that do not have a qualifying business.

D. In case the service provider business is a Permanent Establishment (PE), the rates of the above does not include tax revenue over the remaining PE's net income (Branch Profit Tax) after Income tax, which is the final (Article 3, paragraph (2)).

E. The remaining profit from Permanent Establishment after the final income tax, subject to tax in accordance with the provisions of Article 26 paragraph (4) of Law PPh or appropriate Tax Treaty (Article 4).

F. Income Tax payment procedure that is the final (Article 5 paragraph (1)):

Services were cut by the user at the time of payment, the service user is a tax witholder
paid by service providers, in terms of user services is not a tax witholder.

G. Income Tax of the cut or are paid (Article 5 paragraph (2)):

1. the number of payments, not including VAT rates multiplied Income tax referred to in Article 3, paragraph (1) PP 51 Tax Year 2008; or

2. the amount of revenue payments, not including VAT, tariffs multiplied Income tax referred to in Article 3, paragraph (1) PP number 51 in 2008 PPh paid by the Service provider

H. Conditions on the difference between the lack of cutting or deposits PPh and treatment if the result of receivables (Article 6):

1. In case there is a difference between the lack of tax revenue that based on the value of Construction Services Contract with the Income Tax based on the payment that was deducted or paid their own referred to in Article 5 paragraph (1), the difference is the lack of paid by the service provider.

2. In the case of Construction Services Contract Value is not fully paid by the User Services, Value of the Contract Services Construction is not paid is not subject to Income Tax which is final, with the terms of Contract Value of Construction Services, which is not paid was recorded as receivables, which can not be charged.

3. Debts that can not be billed as referred to in paragraph (2) is the receivables which clearly can not be billed as referred to in Article 6, paragraph (1) the letter h Income Tax Law.

4. In the case of receivables, clearly can not be billed as referred to in paragraph (3) can be charged again, remain subject to tax revenue that is final.

I. The provisions PPh tariffs and general pengkreditan tax paid abroad (Article 7):

1. The tax paid or terutang abroad on earnings from overseas received or obtained Service provider can be credited against the tax terutang based on the provisions of the Income Tax Law Law.

2. Other income received or obtained from outside the service provider business services Construction rates based on the general provisions of the Income Tax Law.

3. Gains or losses from the exchange of business services including in the calculation of Construction Services Contract value of construction imposed tax revenue that is final.

J. Liabilities Bookkeeping / Recording (Article 8)

Service providers obliged to make a separate recording of the costs arising from the income received or obtained from business activities other than the Construction Services business.

K. Change Period (Article 10)

To the contract signed before January 1, 2008 is set:

for the payment of the contract or part of the contract until 31 December 2008, the imposition of PPh regulated by the PP 140 Year 2000 on top of the income from Income Tax Business Services Construction;
for the payment of the contract or part of the contract after 31 December 2008, based on the regulation of PP 51 Tax Year 2008

L. Government Regulation No. 51 Year 2008 is effective since January 1, 2008 (Article 12).