Page 6 - Newsletter(Additional Covid-19 Related Tax Incentives and Technical Guidelines for the Appointment of E-Commerce VAT Withholders)

DDTC Newsletter Vol.04 | No.05 I September 2020 Page 6 of 13

Additional Covid-19-Related Tax Incentives and Technical
Guidelines for the Appointment of E-Commerce VAT Withholders

in the application of the principle of reciprocity, the Fourth, details and confirmation of income tax
Ministry of Foreign Affairs may take into account treatment for certain corporate taxpayers in the form
various aspects based on the treatment of a country of limited partnerships or firms. Fifth, an explanation
towards representatives of the Republic of Indonesia of the final income tax treatment based on Gov. Reg.
and its officials within that country. 23/2018 for corporate taxpayers in the form of banks,
people’s credit banks, savings and loan cooperatives,
One example of a factor worthy of consideration is
microfinance institutions, loan-giving institutions,
the application of minimum purchase requirement
and/or entities that carry out pawning businesses.
of goods or services, excluding VAT, stipulated by a
country to obtain tax facilities within said country. Sixth, the details of the provisions on the treatment of
final Income Tax as per Gov. Reg. 23/2018 which has
been withheld or remitted by the taxpayers themselves,
The DGT Releases Implementation for whom the cancellation and/or revocation letters of
Certificates have been issued.
Guidelines of Gov. Reg. 23/2018
Seventh, the elucidation and confirmation of
The Director General of Taxes has issued Circular compensation for losses for taxpayers that receive
No. SE-46/PJ/2020 concerning Guidelines for the or earn income that is subject to Income Tax under
Implementation of Government Regulation No. 23 Gov. Reg. 23/2018. The compensation for losses only
of 2018 concerning Income Tax on Income from applies to taxpayers that employ the provisions under
Businesses Received or Earned by Taxpayers with Gov. Reg. 23/2018 and perform bookkeeping.
Certain Gross Turnover (SE-46/2020).
Taxpayers, however, may only apply for this
The circular has been released to provide guidance compensation for income that is not subject to final
in the implementation of Government Regulation No. Income Tax. On the other hand, losses on income
23 of 2018 concerning Income Tax on Income from that is the object of Gov. Reg. 23/2018 cannot be
Businesses Received or Earned by Taxpayers With compensated. In addition, to be able to compensate for
Certain Gross Turnover (Gov. Reg. 23/2018). losses on income that is not subject to Final Income
Tax, several conditions are to be met.
As the guidelines for implementing Gov 23/2018,
the circular is expected to establish uniformity in the One of such requirements is that taxpayers must keep
implementation of Gov. Reg. 23/2018, confirm the separate books between income subject to Income Tax
implementation of several provisions under Gov. Reg. based on the general provisions of Income Tax and
23/2018, and outline the procedures for implementing income subject to final Income Tax.
Gov. Reg. 23/2018.
Eighth, the details of the provisions on the calculation
This is because the implementation of the provisions of Article 25 Income Tax installments for taxpayers
under Gov. Reg. 23/2018 and the Minister of Finance that receive income subject to Income Tax under
Regulation No. 99/PMK.03/2018 concerning the Gov. Reg. 23/2018 and also receive income subject to
Implementation of Government Regulation No. 23 Income Tax based on the general provisions of Income
of 2018 concerning Income Tax on Income from Tax.
Businesses Received or Earned by Taxpayers with
Ninth, other matters that need to be emphasized with
Certain Gross Turnover (MoF Reg. 99/2019) requires
regard to the imposition of final Income Tax based on
further confirmation and instructions.
Gov. Reg. 23/2018. Other matters emphasized under
Enacted on 18 August 2020, the regulation covers nine this regulation include the affirmation of the obligation
scopes. First, the details of taxpayers that receive or to have a Taxpayer Identification Number (TIN), the
earn income subject to final Income Tax as per the remittance method, and the treatment of transactions
provisions under Gov. Reg. 23/2018. that are objects of final Income Tax based on Gov.
Reg. 23/2018 and have already been withheld as per
Second, the details and confirmation of the types of general provisions of income tax by other parties.
income subject to final Income Tax according to the
provisions under Gov. Reg. 23/2018. Third, details Enacted on 18 August 2020, this regulation
of the procedures for submitting notification for simultaneously revokes SE-42/PJ/2013 and SE-
taxpayers that choose to be subject to Income Tax 32/PJ/2014 concerning the Confirmation of the
based on the general provisions of Income Tax. Implementation of Government Regulation No. 46 of
2013.