Government Regulation No. 41 Year 2016 dated 17 October 2016

INCOME TAX ARTICLE 21 TREATMENT ON INCOME RECEIVED BY EMPLOYEE FROM EMPLOYER WITH PARTICULAR CRITERIA

 Employee who receive income from employer with particular criteria with maximum amount of Rp 50 millions in one year are subject to 2.5% final income tax article 21.
Employer with particular criteria is:

1. Corporate taxpayer who engage in footwear and/or textile and textile product industry
2. Employ minimum 2.000 employees
3. Bear income tax article 21 for its employees
4. Export at least 50% of its last year total sales
5. Have mutual employment agreement
6. Register its employees under healthcare and social security agency and workers social security agency
7. Does not obtain or utilize income tax facility under article 31A tax law no. 36 year 2008 or article 29 government regulation no. 94 year 2010.

Employees who may get such facility must be listed in periodic income tax return article 21 and/or 26 period July 2016 and January 2017.

When any employees receive more than Rp. 50 millions within one year, the excess amount will be subjected to 15% final income tax up to December for the corresponding year.

Such employees who receive more than Rp. 50 millions are subject to income tax article 21 article 17 tax law no. 36 year 2008 for the following fiscal year.

Final income tax article 21 will be valid for tax period from July 2016 to December 2017.

Further regulation regarding this regulation will be issued by Minister of Finance.

This regulation will be effective on its promulgation date.