DGT Regulation No. PER-32/PJ/2015 dated August 7, 2015

TECHNICAL GUIDANCE FOR PROCEDURES FOR WITHHOLDING, DEPOSITION AND REPORTING OF INCOME TAX ARTICLE 21 AND/OR 26 RELATING TO INDIVIDUAL JOB, SERVICES AND ACTIVITY

Chapter II

Income Tax article 21 and/or 26 withholder

Article 2

1)   Income Tax article 21 and/or 26 withholder include:

a.    Employer such as

1.    Individual

2.    Company or

3.    Branch, representative or unit when they administer part of or whole payment of salary, wages, honorarium, benefits and other payment;

b.    Treasurer or state cash holder, including treasurer or cash holder in central government including institution such national army/police, local government, government institute or institution, other state institution and Indonesia embassy overseas who pay salary, wages, honorarium, benefits and other payment under any name and form relating to jobs or title, services and activities;

c.    Pension fund, workers social security provider and other institution who pay periodic pension fund and pension benefits or pension security;

d.    Individual who own business or independent jobs and company who pay

1.    Honorarium, commission, fees or other payment as compensation relating to services provided by individual as domestic tax subject, including professional services on behalf of himself not his partnership;

2.    Honorarium, commission, fees or other payment as compensation relating to services provided by individual as foreign tax subject; and/or

3.    Honorarium, commission, fees or other payment to training and education participant also internship employee or

e.    Event organizer, including government institution, national and international organization, association, individual also other institution who organize activities which pay honorarium, prize or award in any form to individual taxpayer relating to any activities.

2)   Excluding employer as mentioned in paragraph 1 letter a are:

a.    Foreign representative office

b.    International organization as mentioned in article 3 paragraph 1 letter c income tax law and stipulated by Minister of Finance , or

c.    Individual employer who has no any business or independent jobs and merely employ an individual to be housekeeper or jobs not relating to business or independent jobs.

3)   When international organization does not meet requirement in paragraph 2 letter b, such organization must withhold tax.

Chapter III

Income recipient who subject to income tax article 21 and/or 26 withholding

Article 3

Income recipient who subject to income tax article 21 and/or 26 withholding is individual:

a.    Employee

b.    Severance, pension or pension benefits, pension allowance or pension security receiver including their heir;

c.    Non employee who receive or obtain income relating to services:

1.    Professional who conduct independent jobs including lawyer, accountant, architect, doctor, consultant, notary, appraiser and actuary;

2.    Musician, MC, singer, comedian, movie star, sitcom star, advertising star, director, film crew, photo model, fashion model, actor, dancer, sculpture, painter and other artist;

3.    Athlete;

4.    Adviser, teacher, trainer, lecturer, counselor and moderator;

5.    Writer, researcher and translator;

6.    Service provider including technical, computer and system application, telecommunication, electronics, photography, economics and social also service provider to committee;

7.    Advertising agency;

8.    Project manager or supervisor;

9.    Courier or customer finder or broker;

10. Salesman;

11. Insurance marketer and/or;

12. Multilevel marketing or direct selling distributor or other similar activities.

d.    Board of commissioner or supervisor who are not permanent employees in the same company;

e.    Ex employees and/or

f.     Participant of activities who receive or obtain income relating its participation such as:

1.    Any kind of games, such as sports, art, agility, science, technology and other games

2.    Meeting, conference, court, gathering or work visit participant;

3.    Member or participant of any activity committee

4.    Education and training participant or

5.    Other activity participant

Article 4

Excluding from income recipient if article 3 are:

a.    Diplomatic and consulate representative officials or other foreign officials and their aide who work and stay with them, with condition not Indonesia citizen and do not receive or obtain any other income outside their jobs and such country has reciprocal treatment with Indonesia or

b.    International organization representative official as mentioned in article 3 paragraph 1 letter c income tax law, and stipulated by Minister of Finance, with condition not Indonesia citizen and do not receive or obtain any other income outside their jobs in Indonesia.

Chapter IV

Income subject to income tax article 21 and/or 26

Article 5

1)   Income subject to income tax article 21 and/or 26 are:

a.    Income received or obtained by permanent employee, either regular or non regular income;

b.    Income received or obtained by pensioner regularly such as pension fund or similar income;

c.    Income such as severance, pension benefits, pension allowance or pension security in lump sum payment, which is paid more than 2 years after the employee resigned;

d.    Income for non permanent employee or freelance, such as daily wages, weekly wages, unit wages, lump sum wages or monthly wages;

e.    Compensation to non employee such as honorarium, commission, fees and similar payment in any name or kind as compensation for services rendered;

f.     Compensation to participant such as allowance, representation fees, meeting fees, honorarium, gift or awards in any name and kind and similar compensation in any name;

g.    Income such as honorarium or non regular income received or obtained by board of commissioners or supervisor who are not permanent employees in the same company;

h.    Non regular income such as production bonus, bonus, gratuity, bonus or other compensation received or obtained by ex-employee; or

i.     Income such as pension fund redemption by its participant who still works as employee in pension fund which establishment was approved by Minister of Finance.

2)   Income subject to income tax article 21 and/or 26 as mentioned in paragraph 1 including benefit in kind and/or other benefit in any name or form paid by:

a.    Taxpayer which is subject to final income tax, or

b.    Taxpayer which is subject to deemed profit

Article 6

1)   Income as mentioned in article 5 which is received or obtained by individual domestic tax subject, is considered as income which subject to income article 21.

2)   Income as mentioned in article 5 which is received or obtained by individual foreign tax subject, is considered as income which subject to income article 26.

Article 7

1)   When income as mentioned in article 5 paragraph 1 is received or obtained in foreign currency, income tax article 21 and/or 26 calculation will use exchange rate stated by Minister of Finance which valid at the date of payment or charged to expenses.

2)   Income tax article 21 and/or 26 calculation for benefit in kind and/or other benefits as mentioned in article 5 paragraph 2 will use market value of the goods received or fair value of benefit in kind and/or other benefits.

Article 8

1)   Not including income which is subject to income tax article 21 are:

a.    Insurance benefit or compensation from insurance company related to health, accident, life, dual purpose and scholarship insurance;

b.    Compensation in kind and/or benefits in any form paid by taxpayer or government, except for income as mentioned in article 5 paragraph 2;

c.    Pension contribution paid to pension fund which establishment is approved by Minister of Finance, pension benefit contribution or pension security contribution paid to pension benefit provider or worker social security institution paid by employer;

d.    Alms received by legitimate individual from alms institute or institution which established or approved by government, or mandatory religious contribution by its believer and received by legitimate individual from religious institute or institution which established or approved by government, as long as it has no correlation with business, jobs, ownership or acquisition among the related parties, or

e.    Scholarship as mentioned in article 4 paragraph 3 letter l income tax law.

2)   Income tax borned by employer, including government is considered as benefit as mentioned in paragraph 1 letter b.

Chapter V

Basis for income tax article 21 and/or 26 withholding

Article 9

1)   Basis for income tax article 21 withholding are:

a.    Taxable income for:

1.    Permanent employee;

2.    Regular pension receiver;

3.    Non permanent employee which income is received monthly or with cumulative income more than IDR 3 millions in one month; and

4.    Non employee as mentioned in article 3 letter c who received a continuous income;

b.    Daily income more than IDR 300.000 for non permanent employee or freelancer who receive daily wages, weekly wages, unit wages or lump sum wages, as long as its cumulative income has not been over IDR 3 millions within one month;

c.    50% from gross income will valid for non employee as mentioned in article 3 letter c who receive non regular income; or

d.    Gross income, for income other than mentioned in letter a, b and c.

2)   Basis for income tax article 26 withholding is gross income.

Article 10

1)   Gross income as basis for income tax article 21 and/or 26 withholding are total amount as mentioned in article 5 which received or obtained within one period or at the time of payment.

2)   Taxable income as mentioned in article 9 paragraph 1 letter a are as follow:

a.    For permanent employee and regular pension receiver is net income deducted by non taxable income (PTKP);

b.    For non permanent employee is gross income deducted by PTKP; and

c.    For non employee as mentioned in article 3 letter c is 50% from gross income deducted by monthly PTKP.

3)   Net income for permanent employee are gross income deducted by:

a.    Official expenditure amounted to 5% from gross income with maximum amount of IDR 500,000 every month or IDR 6 millions per annum, and

b.    Employee contribution to pension fund which establishment was approved by Minister of Finance or pension benefit or security institution equal to pension fund which establishment was approved by Minister of Finance.

4)   Net income for regular pension fund receiver is gross income deducted by pension allowance amounted to 5% from gross income with maximum amount of IDR 200,000 every month or IDR 2,400,000 per annum.

5)   When non employee as mentioned in article 3 letter c render services to income tax article 21 and/or 26 withholder:

a.    Employ other person as his employee, gross income as mentioned in paragraph 1 are total payment deducted by salary or wages paid to his employees, unless in contract/agreement portion of salary or wages to his employee cannot be clearly identified, gross income is considered as total amount paid; or

b.    Deliver goods or materials, gross income as mentioned in paragraph 1 only for its services, unless no separation between service and goods or material in contract/agreement then gross income is equal to service plus materials or goods.

6)   When gross income in paragraph 1 paid to doctor who work in hospital and/or clinic, gross income are payment paid by patient to doctor through hospital/clinic before deduction of any charges or profit sharing.

Article 11

1)   Amount of PTKP per annum are as follow:

a.    IDR 36 millions for individual taxpayer;

b.    Additional IDR 3 millions for married taxpayer; and

c.    Additional IDR 3 millions for every member of family related by blood and marriage in direct lineage also adopted child, which are dependent entirely by taxpayer, with maximum of 3 people for every family.

2)   Monthly PTKP as mentioned in article 10 paragraph 2 letter c are annual PTKP as mentioned in paragraph 1 divided by 12 amounting to:

a.    IDR 3 millions for individual taxpayer;

b.    Additional IDR 250,000 for married taxpayer, and

c.    IDR 250,000 for every member of family related by blood and marriage in direct lineage also adopted child, which are dependent entirely by taxpayer, with maximum of 3 people for every family.

3)   PTKP for female employee are as follow:

a.    Marriage status, is PTKP for herself, and

b.    Non marriage status is PTKP for herself plus PTKP for her fully dependent family.

4)   When a married female employee can show a written statement from local government at least from district which stated her spouse has no income, amount of PTKP are PTKP for herself plus PTKP for marriage status and PTKP for her fully dependent family.

5)   PTKP amount is set with condition in the beginning of year.

6)   Exempted from provision in paragraph 5, is for employee just arrive and stay in Indonesia within the year his status is set at the beginning of the month at his arrival.

Article 12

1)   Income for non permanent employee or freelancer which is not paid monthly or the cumulative amount within one month less than IDR 3 millions, the following provision will apply:

a.    No deduction of income tax article 21, when daily income or average daily income is less than IDR 300,000, or

b.    Withheld by income tax article 21 when daily income or average daily income is over than IDR 300,000, and such amount will be deducted from gross income.

2)   Average daily income as mentioned in paragraph 1 is average weekly wages, unit wages or lump sum wages for every working day.

3)   When non permanent employee gets cumulative income more than IDR 3 millions in one month then amount deducted from gross income is actual PTKP.

4)   Actual PTKP as mentioned in paragraph 3 as PTKP for actual number of working days.

5)   Daily PTKP as basis for actual PTKP is annual PTKP as mentioned in article 11 paragraph 1 divided by 360 days.

6)   When based on workforce regulation it is mandatory to enlist non permanent employee or freelancer in pension benefit or allowance program, then contribution paid by employee to the program can be deducted from gross income.

Article 13

1)   Non employee as mentioned in article 9 paragraph 1 letter a point 4 may get deduction of PTKP as long as such party has taxpayer registration number (NPWP) and only receive income related to jobs with one employer as income tax article 21 and/or withholder and has no other income.

2)   To get PTKP deduction as mentioned in paragraph 1, non employee must submit copy of NPWP and for married female must submit copy of her spouse NPWP along with marriage certificate and family register card.

Chapter VI

Tax rate withholding and its implementation

Article 14

1)   Tax rate based on article 17 paragraph 1 letter a income tax law will be applied in taxable income from:

a.    Permanent employee

b.    Regular pension receiver and

c.    Non permanent employee or freelancer who receives monthly payment.

2)   For income tax article 21 calculation should be withheld for every fiscal period, except for last fiscal period, tax rate applied on estimated income would be received in one year, with following condition:

a.    Estimated regular income is monthly regular income multiply by 12 and

b.    For additional non regular income, amount in point a plus non regular income.

3)   Amount of income tax article 21 should be withheld for every fiscal period in paragraph 2 are:

a.    For regular income is income tax payable on income as mentioned in paragraph 2 letter a divide by 12 and

b.    For non regular income is the difference between income tax payable as mentioned in paragraph 2 letter b and income tax payable as mentioned in paragraph 2 letter a.

4)   When permanent employee tax obligation started at beginning of year and he starts working after January, including employee who previously worked with other employer, number of month as multiply factor as mentioned in paragraph 2 or dividing factor as mentioned in paragraph 3 is number of remaining month during the year since he starts his job.

5)   Amount of income tax article 21 for last fiscal period are difference between income tax payable for gross income during the year or part of the year and total income tax article 21 already withheld during the corresponding year.

6)   When permanent employee tax obligation only covers part of the fiscal year, income tax article 21 payable for the year is annualized taxable income in proportion with number of month during the corresponding year.

7)   When permanent employee resign before December and amount of income tax article 21 withheld  during the year is bigger than income tax article 21 payable for the fiscal year, overpayment tax will be refunded to employee along with withholding income tax article 21 tax receipt, at the latest end of subsequent month after his resignation.

8)   Taxable income as basis for tax rate in article 17 paragraph 1 letter an income tax law as mentioned in paragraph 1 will be rounded down in full thousand amount.

Article 15

1)   Income receive by non permanent employee or freelancer such as daily wages, weekly wages, lump sum wages, unit wages and daily allowance, as long as it is paid monthly, first layer as mentioned in article 17 paragraph 1 letter a income tax law will be applied on:

a.    Daily gross income over than IDR 300,000, or

b.    Gross amount less by actual PTKP, when cumulative amount in one month is over than IDR 3 millions.

2)   When cumulative amount in one month is over than IDR 8,200,000, income tax article 21 will be calculated based on tax rate in article 17 paragraph 1 letter a income tax law for annualized taxable income.

Article 16

1)   Tax rate based on article 17 paragraph 1 letter a income tax law will be applied on cumulative amount of:

a.    Taxable income, 50% from gross income deducted by monthly PTKP, which received or obtained by non employee as mentioned in article 9 paragraph 1 letter a point 4 who meet condition in article 13 paragraph 1;

b.    50% from gross income for every continuous payment to non employee as mentioned in article 3 letter c which does not meet condition in article 13 paragraph 1;

c.    Gross income for non regular honorarium or compensation which is received or obtained by boards of commissioners or supervisor who are not permanent employee in such company;

d.    Gross income for non regular production bonus, bonus, gratuity or other compensation which is received or obtained by ex-employee; or

e.    Gross income for pension fund redemption by its participant with employee status, from pension fund which establishment was approved by Minister of Finance.

2)   Tax rate based on article 17 paragraph 1 letter a income tax law will be applied on:

a.    50% from gross income for every continuous payment of compensation to ex-employee; and

b.    Gross amount paid in lump sum for every activity to its participant.

Article 17

Income tax article 21 to government official, civil servant, Indonesia military officer, Police officers and its retirees, whose income paid by using state budget or local budget, will be set under specific regulation.

Article 18

Income tax article 21 for severance, pension benefit, pension allowance or pension security paid in lump sum amount will be set in specific regulation.

Article 19

1)   20% of finalized tax rate for income tax article 26 will be applied on gross income received or obtained by foreign tax subject individual with consideration of avoidance of double taxation agreement between Indonesia and such country.

2)   Income tax article 26 as mentioned in paragraph 1 is not final when foreign individual taxpayer become domestic taxpayer.

Chapter VII

Tax rate for Income tax article 21 for income recipient who has no NPWP

Article 20

1)   Income recipient with no NPWP will be taxed by tax rate 20% higher than the one with NPWP.

2)   Amount of income tax article 21 as mentioned in paragraph 1 is 120% from normal income tax article 21 to the one with NPWP.

3)   Income tax article 21 withholding as mentioned in paragraph 1 will only valid for non finalize income tax article 1.

4)   When permanent employee or regular pension recipient who already withheld by higher tax rate as mentioned in paragraph 1 register himself to get NPWP in corresponding year before December, the 20% difference will be compensated with income tax article 21 payable for the following month after he get NPWP.

Chapter VIII

Time of income tax article 21 and/or 26 payable

Article 21

1)   Income tax article 21 and/or 26 will payable at the time of payment or when such income become payable.

2)   Income tax article 21 and/or 26 will be payable to its withholder for every fiscal period.

3)   Such period as mentioned in paragraph 2 is end of month at the time payment or when such income become payable.

Chapter IX

Right and obligation for income tax article 21 and/or 26 withholder or income recipient

Article 22

1)   Income tax article 21 and/or 26 withholder or income recipient whose income already withheld must register themselves to tax office in accordance with regulation.

2)   Employee, regular pension recipient and non employee as mentioned in article 9 paragraph 1 letter a point 4 must make a statement contained number of dependent family member at beginning of year or when becoming domestic tax subject as basis for PTKP and submit it to tax withholder when start working or retired.

3)   When number of dependent family member is changed, employee, regular pension recipient and non employee as mentioned in article 9paragraph 1 letter a point 4 must make a new statement and submit it to income withholder before next year.

4)   Income tax article 21 and/or 26 withholder must calculate, withhold, pay and report its tax payable every month.

5)   Income tax article 21 and/or 26 withholder must make a note or worksheet for income tax article 21 and/or 26 calculation for every employee, as basis for reporting income tax article 21 and/or 26 payable for every fiscal period and keep its documents in accordance with regulation.

6)   Such obligation in paragraph 4 still valid when tax payable amount is nil.

7)   When there is overpayment of income tax article 21 and/or 26 in particular month, such overpayment can be compensated to the next month.

Article 23

1)   Income tax article 21 and/or 26 withholder must provide income tax receipt to its permanent employee or regularly pension recipient at least one month after end of calendar year.

2)   When permanent employee resign before December, income tax article 21 receipts as mentioned in paragraph 1 must be provided at least one month after his resignation.

3)   Income tax article 21 and/or 26 withholder must provide income tax article 21 receipt to its non permanent employee and pension recipient as mentioned in paragraph 1 also income tax article 26 receipt every time they withhold income tax article 26.

4)   When in one month there are more than one payment to income recipient, income tax article 21 and/or 26 receipt as mentioned in paragraph 3 may prepared once in one month calendar.

5)   Income tax article 21 and/or 26 receipt form will be set by DGT regulation.

Article 24

1)   Income tax withholder who withheld income tax article 21 and/or 26 for every fiscal period must pay it to post office or bank appointed by minister of finance, no later than 10 days after end of fiscal period.

2)   Income tax article 21 and/or 26 withholder must file income tax article 21 and/or 26 withholding and payment for every fiscal period by using income tax article 21 and/or 26 periodic tax return to tax office where they are registered, no later than 20 days after end of fiscal period.

3)   When payment due date of income tax article 21 and/or 26 as mentioned in paragraph 1 and filing due date as mentioned in paragraph 2 is public holiday including Saturday, such payment and filing can be done on next working day.

Article 25

1)   Amount of income tax article 21 withheld may become tax credit to income recipient for the corresponding fiscal year, except for finalize income tax article 21.

2)   Amount of 20% higher income tax article 21 for permanent employee or pension recipient before they get NPWP which already compensated to income tax article 21 payable for subsequent month as mentioned in article 20 paragraph 4 is not included as tax credit as mentioned in paragraph 1.

3)   When taxpayer whose income is already subject to higher income tax withholding as mentioned in article 20 paragraph 1 register himself to get NPWP, such income tax withholding can be credited to his annual individual income tax return for the corresponding fiscal year.

4)   When taxpayer as mentioned in paragraph 3 file overpayment annual individual income tax return, such filing must be filed no later than 3 years after end of the corresponding fiscal year.

5)   When such tax return as mentioned in paragraph 4 is filed after 3 years after end of its fiscal year and taxpayer already get a warning letter, such tax return is not considered as annual individual income tax return.

With the effectiveness of Minister of Finance Regulation No. 122/PMK.010/2015, income tax article 21 calculation for 2015 will be as follow:

a.    Calculation and payment also filing of income tax article 21 periodic tax return for July up to December 2015 will use PTKP under Minister of Finance Regulation No. 122/PMK.010/2015;

b.    Income tax article 21 periodic tax return from January up to June 2015 which have been calculated, paid and filed by using PTKP under Minister of Finance Regulation No. 162/PMK.011/2012 will be corrected and the overpayment tax can be compensated to July up to December periodic tax return; and

c.    Correction made to income tax article 21 periodic tax return from January up to June 2015 as mentioned in point 2 will be conducted under this regulation.

At the effective date of this regulation, DGT Regulation No. PER-31/PJ/2012 is void and no longer valid.

This regulation will be effective at the time of its promulgation.