Page 3 - Newsletter (Fiscal Facilities For Boosting Investment and Economic Growth)

DDTC Newsletter Vol.01 | No.02 I March 2019 Page 3 of 5

FISCAL FACILITIES FOR BOOSTING INVESTMENT AND ECONOMIC GROWTH

Provisions for Installments of Income categorizes taxpayers in merger, consolidation, spin-off,
Tax Article 25 for Certain Taxpayers business acquisition, and/or changes in business entity
as new taxpayers whose amount of income tax Article 25
installments will ‘deviate’ from general tax regulations.
At the end of December 2018, the government issued
the latest provisions regarding installments of Income On a side note, the installment of income tax Article
Tax for taxpayers of certain criteria. This regulation
25 itself is defined as the monthly average income
comes into force as of Tax Year 2019 through PMK 215/ tax payable based on the current Annual Tax Return
PMK.03/2018 (PMK 215/2018). The regulation which is
deducted by withheld income tax Articles 21 and 23,
the elucidation of Article 25 paragraph (7) of the Income withheld income tax Article 22, and creditable income tax
Tax Law revokes the previous provisions, PMK No. 255/
Article 24. However, in order to obtain the correct data of
PMK.03/2008 (PMK 255/2008) as amended by PMK No. a company’s business activities, the government excludes
208/PMK.03/2009 (PMK 208/2009).
several types of taxpayers from the general regulation of
income tax Article 25. The types of financial statements
Basically, PMK 215/2018 extends the definition of new and income categorized as net income are also stipulated
taxpayers. The previous regulation only states that in this regulation. The following table is a summary of
new taxpayers are individuals and entities who earn the amount of installments of Article 25 income tax for
income from business or self-employment for the first certain taxpayers.
in the current tax year. Furthermore, this regulation also

Table 2 – Calculation of Article 25 Income Tax Installments for Certain Taxpayer

No Type of Taxpayer Calculation of Article 25 Income Tax Installments

1 Banks as Taxpayers (Income tax Article 17 rate x Net income from financial statement) - (Withholding Tax
(New and Existing Taxpayers) Article 22 from the beginning of the Tax Year until the reported Tax Period + income
tax Article 25 payable from the beginning of the Tax Year until the reported Tax Period)

2 Other Taxpayers and Listed Taxpayers (Income tax Article 17 rate x net income from financial statement) – (Withholding tax
other than Banks (New and Existing Articles 22 and 23 from the beginning of the Tax Year until the reported Tax Period +
Taxpayers) income tax Article 25 payable from the beginning of the Tax Year until the reported Tax
Period)

3 State-Owned Enterprises and Local- (Income tax Article 17 rate x Budget and Work Plan (Rencana Kerja dan Anggaran
Owned Enterprises as Taxpayers Pendapatan/RKAP) for the Tax Year validated by General Meeting of Shareholders
(New and Existing Taxpayers) (Rapat Umum Pemegang Saham/RUPS) – ((Withholding Tax Article 22 and 23 +
income tax Article 24 that has been paid or outstanding in the previous Tax Year) : 12)

4 Certain Individual Taxpayers (New and (0.75% x gross turnover from every business place outside the taxpayer’s residence)
Existing Taxpayers)
5 Taxpayers in spin-off (New and Existing The percentage of transferred assets for each taxpayer resulting from the spin-off
Taxpayers)

6 Taxpayers in merger, consolidation, and/ The amount of the taxpayer’s income tax Article 25 installments prior to the merger,
or business acquisition in the current Tax consolidation, and/or business acquisition
Year (New Taxpayers)

7 Taxpayers with a change in the form of The last income tax Article 25 installments prior to the changes in the business entities
their business entities (New Taxpayers)

8 New taxpayers other than criteria 1 – 7 Nil
(New Taxpayers)