Calculation of Taxable Income

The amount of taxable income for domestic taxpayers and permanent establishments is determined
based on gross income less costs to obtain and collect and maintain income including the following:

1. Costs that are directly or indirectly related to business activities, among others :
1) Cost of purchasing materials
2) Costs related to work or services including wages, salaries, honorarium bonuses,
gratuities, i and allowances provided in the form of money
3) Interest, rent, and royalties
4) Travel expenses
5) Waste treatment costs
6) Insurance premium
7) Promotion and sales costs that are regulated by or based on the regulation of the Minister
of Finance
8) Administration fee
9) Tax except income tax, like property tax, stamp duty, hotel tax, and restaurant tax

To be able to be charges as an expense for voting, it must be directly related to activities to

obtain, collect, and maintain income which is a tax object otherwise its not charged as an
expense.

2. Depreciation of expenses for obtaining tangible assets and amortization of expenses for
obtaining rights and other costs with a useful life of more than one year
- Has benefit more than 1 year = the loading is carried out through depreciation or
amortization
- Advance payment = the loading is carried out through allocation
3. Contribution to pension funds whose establishment has been approved by the Minister of
Finance (If it is not approved by the Minister of Finance, it cannot be charged as a fee)
4. Losses due to the sale or transfer of property owned and used in the company or owned to
obtain, collect and maintain income
5. Loss on foreig exchange differences ( according to financial accounting standards in Indonesia)
6. The costs of research and development for companies carried out in Indonesia
7. Scholarship, internship, and training fees
8. Receivables that are clearly uncollectible on condition like :
1) Has been charged as expense in the commercial income statement
2) Taxpayers must submit a list of uncollectible receivables to the Directorate General of
Taxes
3) The billing case has been submitted to the district court or government agency that
handles state news (doesn’t apply to the writte-off of small debtor uncollectibl accounts)
9. Donations in the context of national disaster management, donations for research and
development carried out in Indonesia, costs for building social infrastructure, donations for
educational facilities, donations for sports fostering regulated by government regulations

Taxable income rate table :

Tarrif
No Taxable Income
Have NPWP Do not have NPWP
 1 Untill Rp. 50.000.000 5% 6%

2 Rp 50.000.000-Rp. 250.000.000 15% 18%

3 Rp. 250.000.000-Rp.500.000.000 25% 30%

4 Above Rp. 500,000,000 30% 36%

3 kinds of calculation of taxable income :

Taxable income is Taxpayer Income that is earned after you calculate the net income in a year-non
taxable income.

1. Taxable income for corporate taxpayers

Net income = gross income-deductions / expenses permitted by the income tax law

2. Taxable income for individual domestic taxpayers by bookkeeping

As referred to in Article 2 paragraph 6 of the income tax law, the income tax is calculated
based on the net income received or earned in the annualized portion of the tax year.

3 types of calculation are :

1) Taxable income = net income-non taxable income
2) Taxable income = net income-zakat-nontaxable income
3) Taxable income = net income-zakat-loss compensation-non taxable income

Net income = gross income-deductions / expenses permitted by the income tax law

3. Taxable income for an individual resident taxpayer based on the calculation norm
Taxable income = net income-non taxable income. If taxpayers pay zakat, so the calculation :
Taxable income = net income-zakat-non taxable income

Net income = Business turnover - percentage of NPPN