Page 3 - Newsletter (Latest Income Tax Facilities to Address Covid-19 and Guidelines for the DGT’s Tasks in the New Normal)

DDTC Newsletter Vol.03 | No.13 I June 2020 Page 3 of 6

Latest Income Tax Facilities to Address Covid-19 and
Guidelines for the DGT's Tasks in the New Normal

Third, additional income received or earned by iii. Requirements relating to the entity being a
human resources in the health sector. Additional publicly-listed company and the total number
income from the government in the form of honoraria of shares being traded on the Indonesian stock
or other benefits received or earned by individual exchange must be at least 40% fulfilled within
taxpayers that are health workers, health support a minimum of 183 calendar days within a tax
staff, and assigned to provide health services to year.
address Covid-19, including compensation from the
iv. These requirements are to be fulfilled and re-
government received by heirs, are income tax objects.
ported to the DGT by the publicly-listed com-
Under this regulation, the additional income is subject pany.
to final Article 21 Income Tax withholding at a rate
The parties referred to in points i and ii above do
of 0% of the total gross income received or earned.
not include publicly-listed company taxpayers that
The final Article 21 income tax is withheld by the
repurchase their shares and/or are affiliated. The
government as the provider of income at the end of the
policy of share buyback is carried out no later than
month in which the payment is made or the income is
30 September 2020. Shares that are repurchased may
due, whichever event occurs first. The provisions on
only be held by taxpayers until 30 September 2022.
the withholding also apply to taxpayers that are state
After the expiry of this period, if share ownership does
officials, civil servants, members of the Indonesian
not meet the specified conditions, the parties cannot
National Armed Forces (Tentara Nasional Indonesia/
take advantage of incentives under this regulation.
TNI), members of the Indonesian Police, and retirees.
This regulation is valid until 30 September 2020.
Adjustments to the DGT’s Tasks in the
Fourth, income in the form of compensation and
reimbursement for the use of assets is subject to a final New Normal
income tax of 0%. The final income tax is withheld
by the government as the provider of income at the The Director General of Taxes has published technical
end of the month in which the payment occurs or the guidelines that set out the provisions relating to the
payment is due, whichever event occurs first. adjustments of the manner in which tasks are carried
out in the areas of supervision, extensification, audits,
Income tax is withheld by preparing withholding slips
preliminary investigations, investigations, digital
according to the sample format listed in Appendix D
forensics, collection, assessments, objection, and non-
and/or Appendix E of PP 29/2020. The withholding
objection.
slips must be reported on the Periodic Article 4
Paragraph (2) Income Tax Return. Costs to obtain, The technical adjustments to the implementation of
collect, and maintain income cannot be charged as a tasks are the adaptation of duties to the new normal
deduction from gross income. within the DGT. The technical guidelines have been
released to ensure that tasks within the DGT may be
The income tax is imposed on income received or
implemented effectively in the new normal.
earned until 30 September 2020. The imposition
applies to all leasing or use of assets prior to the The technical guidelines are outlined in the
enactment of this regulation, i.e. from 1 March until Director General of Taxes Circular No. SE-34/
30 September 2020 or from the enactment of this PJ/2020 concerning the Technical Guidelines for the
regulation, i.e. from 10 June until 30 September 2020. Implementation of Tasks in the New Normal within
the Directorate General of Taxes (SE-34/2020).
Fifth, buyback of shares traded on the stock exchange.
Resident taxpayers in the form of publicly-listed In addition, the implementation of tasks are adjusted
companies, with a total number of paid shares traded to prevent, reduce the spread, and protect DGT’s
on the Indonesian stock exchange of a minimum of employees from Covid-19 risk. The adjustments,
40%, and meeting certain conditions are entitled thus, are mainly related to activities that require
to a 3%-lower rate than the rates listed in Law No. direct interaction with taxpayers, taxpayers’ power of
2 of 2020. To obtain this incentive, four specific attorney, or other parties.
requirements below must be met.
These activities are adjusted by optimizing the
i. The shares must be owned by at least 300 par- use of electronic channels, postal, and/or shipping
ties. companies/courier services with proof of postage,
and face-to-face interactions that take into account the
ii. Each party may only own shares of less than
guidelines in the Director General of Taxes Circular No.
5% of the total issued and fully paid shares.