Page 5 - Newsletter (Tax Return Procedures During COVID-19 Pandemic and Provisions on Article 25 Income Tax Installments at a New Rate)

DDTC Newsletter Vol.03 | No.09 I May 2020 Page 5 of 9

Tax Return Procedures During COVID-19 Pandemic and Provisions
on Article 25 Income Tax Installments at a New Rate

rate adjustment in Article 25 income tax installments Registration of International Mobile Equipment Identity
comes into force as of the Tax Period of the filing deadline (IMEI) of Telecommunications Devices in Customs
for Annual Income Tax Returns for the 2019 tax year. Declaration (PER-05/2020). This regulation has entered
This implies that a new rate of 22% applies for corporate into force on 18 April 2020.
taxpayers in general and a new rate of 19% applies for
This regulation aims to prevent and suppress the number
companies listed on the stock exchange that meet the
of illegally-imported telecommunications devices.
rate reduction requirements as of April 2020.
Additionally, the government, under this regulation, seeks
This regulation also outlines the amount of Article to protect the public from the use of telecommunications
25 income tax installments for the 2022 tax year. The devices that do not meet technical requirements.
validity period of the 20% rate as the basis for calculating
Imported telecommunication devices that are released
Article 25 income tax installments varies depending on
from a bonded zone to another place in the customs area
the taxpayer categories.
and that are entered or released into or out of a free trade
In further detail, the 20% income tax rate for corporate zone are required to have IMEIs. IMEIs must be notified
taxpayers shall be valid as of the tax period in the month to the DGCE when the telecommunications devices are
when the Annual Income Tax Returns for the 2021 tax imported to be used or entered or released into or out of
year are submitted. For taxpayers filing tax returns past the free trade zone.
the reporting deadline, the rate shall be valid as of the tax
IMEIs must be registered in the ministry responsible for
period of the filing deadline of annual income tax returns
government affairs in the industrial field. The registered
for the 2021 tax year.
status of telecommunications devices is connected to
Moreover, for stock exchange taxpayers and other national cellular mobile networks within the customs
taxpayers required by law to prepare periodic reports, the area.
20% rate applies as of the tax period for the submission
Importers or their proxies must notify the IMEIs of all
deadline of financial statements for the first period of the
imported telecommunications devices declared using
2022 tax year.
Import Declarations (Pemberitahuan Impor Barang/PIB).
Conversely, for taxpayers obliged to prepare periodic In addition, the prohibition or restriction requirements
financial statements other than the abovementioned in the PIB must also be fulfilled.
taxpayers, such as banks, state-owned enterprises
The provisions also apply to several items. First,
(Badan Usaha Milik Negara/BUMN) and Local-Owned
telecommunications devices released from bonded
Enterprises (Badan Usaha Milik Daerah/BUMD), the 20%
zones to other places in the customs area. Second,
rate applies since the beginning of 2022.
telecommunications devices entered into a free trade zone
In contrast, for publicly listed taxpayers entitled to the from outside the customs area. Third, telecommunications
3% lower rate facility, the 7% rate will apply from the devices released from a free trade zone to other places
tax period of the submission deadline for financial in the customs area. Fourth, telecommunications devices
statements in the first period of the 2022 tax year. entered into a free trade zone from other places in the
customs area.
The regulation also emphasizes that the adjustments
of corporate income tax rates that affect the amount of Passengers or crew members who carry
income tax installments in the current tax year that must telecommunications devices from outside the customs
be paid by taxpayers themselves (Article 25 income area must notify customs and excise officials. Provisions
tax) should be as close as possible to the amount of tax on IMEI registration also apply to telecommunications
payable at the end of the tax year. devices brought from outside the customs area to bonded
zones and from free trade zones to other places in the
customs area.
Provisions on the IMEI Notification and Telecommunications devices imported through postal
Registration for Telecommunications service organizers, including incoming or outgoing
Devices ones, are also subject to IMEI registration. The devices
are registered by supplying the IMEI data in the
The Directorate General of Customs and Excise (DGCE) Consignment Note or Special Goods Import Notification
has issued a regulation on the International Mobile (Pemberitahuan Barang Impor Khusus/PIBK).
Equipment Identity. The policy is outlined in the Director
General of Customs and Excise Regulation No. PER-05/
BC/2020 concerning the Procedures for Notification and