Substances Of The Draft Omnibus Law On Taxation

The Minister of Finance, Sri Mulyani Indrawati, said that the Ministry of Finance had prepared the draft omnibus law on taxation. As planned, the omnibus law on taxation will consist of 28 articles and harmonize 7 laws (Law) including Law on Income Tax, Law on Value Added Tax, Law on General Provisions and Procedures for Taxation, Law on Customs, Law on Excise, Law on Regional Taxes and Regional Levies, and Law on Regional Government.

Sri Mulyani stated some important points in the omnibus law on taxation. Firstly, there is a reduction in corporate income tax rate from 25% to 20% which is conducted gradually. Secondly, there is tax incentive for companies listed on exchange in the form of additional reduction in corporate income tax rate by 3% of the normal rate. Thirdly, there is removal of income tax on dividends of domestic and foreign companies investing in Indonesia. Fourthly, there is provision regarding determination of individual tax subjects for Indonesian citizens working abroad as well as foreign workers living in Indonesia.

In addition, there is also provision regarding the right of crediting of input tax for taxable entrepreneurs (PKP) who purchase goods or services from non-PKP parties. Then, there is a change in tax sanction rate. And then, there is tax imposition for international digital company even though the company does not have physical permanent establishment or branch office in Indonesia. Furthermore, there is also provision regarding the rationalization of regional taxes.

 

Source :

www.legalcentric.com

Final Income Tax Tariff for MSMEs Cuts Down to 0,5%
Final Income Tax Tariff for MSMEs Cuts Down to 0,5%

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