Summary Of Regulation On Tax Incentives For Taxpayers Affected By Corona Virus Disease 2019 Pandemic

Income received or obtained by employees must be deducted in accordance with Article 21 Income Tax (PPh Article 21) by an employer. PPh Article 21 Borne by the Government (DTP) for income received by employees has certain criteria which include as follows: (a) receiving or obtaining income from employers who (i) have Business Field Classification (KLU) code as set out in letter A of Attachment to this regulation (a total of 1,189 industries and companies), (ii) have been designated as Import Facility for Export Purposes (KITE) companies, (iii) have obtained Bonded Zone Organizer license, Bonded Zone Entrepreneur license, or Entrepreneur in  Bonded Zone concurrently  as  Organizer in Bonded Zone (PDKB) license; (b) having Taxpayer Identification Number (NPWP); (c) during the Tax Period , employees receive or obtain fixed and regular annualized Gross Income of no more than Rp200 million. PPh Article 21 DTP shall be granted as from Tax Period  of April 2020 until Tax Period  of December 2020.

Income from business received or obtained by taxpayers who have a certain gross circulation in accordance with the provisions in Government Regulation Number 23 Year 2018, shall be subject to final PPh of 0.5% of the total gross circulation. The final PPh shall be borne by the government.

PPh Article 22 on Import shall be collected by the Foreign Exchange Bank or the Directorate General of Customs and Excise at the time taxpayer carries out importation of goods. The amount of PPh Article 22 on Import shall be based on ministerial regulation regarding the collection of PPh Article 22 in connection with payment for delivery of goods and activities in the import sector or business activities in other sectors. PPh Article 22 on Import shall be exempted from collection for taxpayers who: (a) have KLU code as set out in letter H of Attachment to this regulation (a total of 721 certain business sectors); (b) have been designated as KITE companies; or (c) have obtained Bonded Zone Organizer license, Bonded Zone Entrepreneur license, or PDKB license, at the time of expenditure of goods from bonded zone to another site within customs area. The period of exemption from collection of PPh Article 22 on Import is valid as from issuance date of Statement Letter of Exemption of Collection of PPh Article 22 on Import until 31 December 2020.

Taxpayers who: (a) have KLU code as set out in letter M of Attachment to this regulation (a total of 1,013 certain business sectors), (b) have been designated as KITE companies, or (c) have obtained Bonded Zone Organizer license, Bonded Zone Entrepreneur license, or PDKB license; shall be granted with deduction on the amount of PPh Article 25 installment of 30% from PPh Article 25 installment which should have been payable. Deduction on the amount of PPh Article 25 installment is valid as from the submission of Tax Period  of notification of deduction of PPh Article 25 installment until the Tax Period  of December 2020.

Taxable Entrepreneur (PKB) may be granted with a preliminary refund of tax overpayment as low-risk PKB if fulfills the following requirements: (a) having KLU code as set out in letter P of Attachment to this regulation (a total of 716 certain business sectors), (b) having been designated as KITE companies, or (c) having obtained Bonded Zone Organizer license, Bonded Zone Entrepreneur license, or PDKB license. In addition, PKP must submit Periodic Tax Returns of Value Added Tax (VAT) Period with overpayment restitution with the overpayment amount of a maximum of Rp5 million. The Periodic Tax Returns of VAT Period which is granted with the preliminary refund includes the Periodic Tax Returns of VAT Period including the correction of Periodic Tax Returns of VAT Period, for Tax Period  of April 2020 until Tax Period  of December 2020, and is submitted by no later than 31 January 2021.

This regulation came into force on 16 July 2020 by revoking and declaring null and void Regulation of the Minister of Finance Number 44/PMK.03/2020.

 

 

 

 

Source: https://legalcentric.com/content/view/152113

Tax On Retained Earnings
Tax On Retained Earnings

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