1

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF STUDY

The self-assessment system implemented in Indonesia means that taxpayers or

corporate taxpayers must calculate, pay and report their own tax obligations based on

exiting tax laws and regulations issued. Therefore in calculating the amount of

income tax, taxpayers are required to do bookkeeping. Every taxpayer who runs an

independent business or service and taxpayer in Indonesia, must prepare what

accounting will be used as the basis for calculating taxable income. In taxation

procedures, this method is recognized as a difference from the profit and bookkeeping

method. The minimum requirement of bookkeeping method is recording assets,

capital, and expense practically, Every tax payer especially entity taxpayer also has to

prepare a income statement as their report. This has been set to make sure any

reported information from taxpayers are completed and correct to impose a fair a

reasonable value of the taxpayers economic capability.

Actually, every taxpayer is obligated to prepare bookkeeping, but not all the tax

payers are able to do bookkeeping due to the lack of knowledge, and with it will also

make them to spend extra expenses for the hiring accountant to bookkeeping.

As stated in Article 14 of Income Tax Law Number 36 of year 2000 concerning

about Income Tax, individual taxpayers who are conducting business performing
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independent work within a certain amount of gross income to facilitate calculation of

the net are not obliged to do bookkeeping. Therefore, income for them, Directorate

General of Taxes also has issued KEP-536/PJ/2000 and Regulation of the Minister of

Finance No. 01/PMK.03/2007 concerning about deemed profit method in calculating

taxable income Deem Profit Method should only be applied by an individual

taxpayer! sole proprietorship who is conducting business or independent services

where its gross income recapitulation is less than the amount of

Rp4,800,000,000.00(four billion eight hundred million rupiahs) annually. To be able

to use Deem Profit Method, an individual taxpayer must notify the Director General

of Taxes within the first 3(three) months of the taxable year concerned. In this

research the writer will do the different on the calculation of Taxable Income based

on the Bookkeeping Method and Deem Profit Method on a sole proprietorship

individual taxpayer that has gross income less than Rp4,800,000,000.00 per year,

which is PT. PANJI.

PT. PANJI is a retailer of electronic appliancesatBelawan. The but for the

company is actually has already prepared internal bookkeeping, taxation Purposes,

the company is using Deem Profit Method as the basic in determining their Taxable

Income. Since the company's annual gross income does not exceed Rp

4,800,000,000.00, so that the company may choose either to use Deem profit Method

or Bookkeeping method.

There are some ways to have an effective company tax payment:

1. Choose the right recording system

2. Choose the right bookkeeping system

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3. Choose the right inventory method (FIFO)

We will reduce the expenses that from the expenses of the employee's salary,

telephone, electricity, paper, and other expenses incurred for the office.

Base on the case above the writer is interested in choosing the title of“The

Analysis of the difference of deemed profit method and bookkeeping method at

PT. PANJI ”

1.2 PROBLEM IDENTIFICATION

Based on the research background, the problems identified are as follows

"which one is better the bookkeeping method or the request cost method used in the

PT.PANJI.

1.3 SCOPE OF STUDY

Due to the Limitation time and knowledge of writer, this study focus on

finding the right way to reduce tax on the notary office with the bookkeeping method

and deemed profit method from accumulation in year 2017 at PT PANJI.

1.4 OBJECTIVE OF STUDY

The objective of doing this research is: To know Either Deemed Profit

Method and bookkeeping method will more suitable to be implemented at PT.

PANJI.
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1.5 BENEFIT OF STUDY

The benefits of doing this research will be provided for related and the

unrelated parties. Some of the most important are as follows:

1. For companies

This research can be used as a reference for companies to find about a smaller tax

calculation system

2. For writers

This research can be used as a reference for the author and can provide additional

knowledge and experience for writers in taxation

3. For readers

This research can be used as a good tool and additional information for people as

reference to do the research with same topic.

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1.6 THEORETICAL FRAMEWORK

The theoretical framework of the research can be figured as below:

Figure 1.1

The theoretical framework can be figured as follow :

Individual Taxpayer

Bookkeeping Deemed Profit

Method Method

Net Income Net Income

(Gross Income-COGS- (Gross Income COGS-

Deductible Expenses) Deductible Expenses)

Comparison
Taxable Income

Income Tax Payable

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Bookkeeping is the process of recording daily transaction constantly, and is a

key component to building a business that i financially successful.

Bookkeeping consist of:

1. record financial transactions

2. post debit and credit

3. producing invoices

4. maintain and balance subsidiaries, ledgers, and historical accounts

5. complete the payroll

Maintaining a ledger is one of the main components of accounting. Ledgers are

basic documents where the bookkeeper records the amount of sales and expenditure

receipts. This is referred to as a post and the more sales are completed, the more often

the ledger posted. Ledgers can be made with special software, computer spreadsheets,

or just a strip of paper.

The complexity of bookkeeping systems often depends on the size of the

business and the number of transactions completed every day, weekly and monthly.

All sales and purchases made by your business need to be recorded in the general

ledger, and certain items require supporting documents.

Deemed profit method can be applied for those who don't do bookkeeping as

regulated in the taxation. in order apply deemed profit method individual taxpayer

need to report it to the directorate general of tax in the first 3 months of the tax payer.

1.7 SYSTEMS OF WRITING

The systematic online of writing in this skripsi will be as follow:

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Chapter 1 : Introduction

In this chapter the writer will describes about the background of

study, problem identifications, and the scope of study, objective

of study, benefit of study, theoretical framework and its table,

and the system of writing. The writer will describe the problem

in the company as background of study, and give some problem

identification.

Chapter 2 : Theoretical Background

In this chapter the writer will describes about theories relates to

this research. The writer will also write some originality in

research.

Chapter 3 : Research Methodology

In this chapter the writer will describes about research objects.

Analytical on the types, procedures, and methods of data

collected.

Chapter 4 : Result and Analysis

In this chapter, the writer will give a brief history of the

company. Include the comparison of the problem in the company

and results with the research and analysis result supported with

the theories.

Chapter 5 : Conclusion and Recommendation

In this chapter the writer gives conclusion and recommendation

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based on the result and analysis.

CHAPTER 2

THEORITICAL BACKGROUND

2.1 TAXATION

Taxes are an obligation for all level of society through business entities or

individual as individual taxpayer. Various definition of tax is provided by many

tax experts. Some of the definition is according to Sitorus (2016)

"Pajakadalahpungutanwajibyang
dibayarrakyatuntuknegaradanakandigunakanuntukkepentinganpemerintahdanmas
yarakatumumRakyat yang
membayarpajaktidakakanmerasakanmanfaatdaripajaksecaralangsungkarenapajak
digunakanuntukkepentinganumum, bukanuntukkepentinganpribadi.
Pajakmerupakansalahsatusumberdanapemerintahuntukmelakukanpembangunan,
baikpemerintahpusatmaupunpemerintahdaerahPemungutanpajakdapatdipaksakan
karenadilaksanakanberdasarkanundang-undang.
It can be explained as Tax is a compulsory levy paid people to the state and will be

used for the benefit of the government and the general public. People who pay taxes

will not benefit from direct taxes, because taxes are used for the public interest and

not for personal gain. Tax is one source of government funds to do the construction,

both central and local government. Taxation can be imposed due to be implemented

by legislation.
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According to Prof. Dr. Rochmat Soemitro, SH said that “Tax is a people's

contribution to the state treasury under the law (which can be forced) with no lead

services (counterpart) that can be used and used to pay for general expenses "

(Mardiasmo,2016)

Tax definition according to M.J.H Smeets in SukrisnoAgoes (2014: p,6):

“Pajakadalahprestasikepadapemerintah yang

terutangmelaluinormanormaumum, dan yang dapatdipaksakan,

tanpaadanyakontraprestasi yang dapatditunjukkansecara individual;

maksudnyauntukmembiayaipengeluaranpemerintah.”

Definisipajakmenurut UU Nomor 28 Tahun 2007 TentangKetentuanUmumdan

Tata caraPerpajakan (UU KUP) yaitu :

“Pajakadalahkontribusiwajibkepadanegara yang terutangoleh orang

pribadiataubadan yang bersifatmemaksaberdasarkanUndang-Undang,

dengantidakmendapatkanimbalansecaralangsungdandigunakanuntukkeperluanne

garabagisebesar-besarnyakemakmuranrakyat.”

“Dalammenetapkanbesarnyapajakterhutangtetapmendasarkanlaporankeuang

an yang disusunolehperusahaan,

mengingattentangperundangundanganperpajakanterdapataturan-aturankhusus

yang berkaitandenganakuntansi,

yaitumasalahkonseptransaksidanperistiwakeuangan, metodepengukurannya,

sertapelaporan yang ditetapkandenganundang-undang.”

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Based on the above definition it can be concluded that tax accounting is recording

transactions that only relate to taxes for simplify the preparation of period and annual

tax returns income tax.

2.1.1 The function of Tax

As it is known the characteristics inherent in the definition of tax from various

definitions, according to Official there are 2 (two) tax functions, are as follows:

1. Budgeting Function (State Financial Source)

Tax has a function of budgeting, meaning that tax is one of the sources of

government revenue to finance both routine and development expenses. As a source

of state finance, the government tries to put as much money as possible into the state

treasury. The effort was taken by extending and intensifying tax collection through

improving regulations on various types of taxes, such as Income Tax (PPh), Value

Added Tax (PPN), Sales Tax on Luxury Goods (PPnBM), Land and Building Tax

(PBB), and others -other.

2. Regular function (regulator)

Tax has a regulatory function, meaning tax as a tool to regulate or implement

government policies in the social and economic fields and achieve certain objectives

outside the financial sector ". (Resmi,2013)

 11

in addition to the two functions above, taxes also have other functions, namely:

1) Stability Function

With taxes, the government has funds to carry out policies related to price

stability so that inflation can be controlled.

2) Income Redistribution Function

The tax collected by the State will be used to finance all public interests,

including also financing development so that it can open employment opportunities,

which in turn will increase people's income.

3) Function of Democracy

The tax that has been collected by the State is a manifestation of a mutual

cooperation system. This function is associated with the level of government services

to taxpayers' communities. (Sari,2013)

2.1.2 Classification Of Tax

Tax applied in Indonesia can be distinguished by the following classification:

1. Based on the nature of tax:

a. Direct tax Direct tax is tax to be paid by the taxpayer and cannot delegated

to another party or another person. For example: Income Tax, Land and

Building Tax.

b. Indirect Tax Indirect tax is a tax which can be delegated to others. For

example: Sales Tax on luxury goods, Value Added Tax (VAT)

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2. Based on the collector of tax:

a. Central Tax Central tax is a tax which is levied by the central government

collection in area are carried out by Tax, Value Added Tax (VAT), Sales

tax on luxury goods, and etc. and the the tax office. For example: Income

b. Region Tax Region tax is a tax which the right of collection is done by

related region government (pemda). For example: Motor Vehicle Tax,

Radio Tax, Hotel Tax, and etc.

3. Based on the subject tax:

a. Individual Tax Individual tax is a tax which is paid and reported by

taxpayers themselves. For example: Income Tax

b. Entity Tax Entity tax is a tax which is paid and reported by the agency or

organization. For example: Tax on Corporate's profit.

4. Based on the source:

a. Domestic Tax Domestic tax is tax which is levied on the taxpayer (every

Indonesian citizens) living in Indonesia

b. Foreign ax Foreign tax is a tax which is levied on people - foreigners who

earn income in Indonesia(Lasamulafai, 2015)

te

2.1.3. System of Collection

According to AbbiSatya (2016) “Sistempemungutanpajakyaitucra di

gunakanuntukmenghitungbesarnyapajakseseorang yang harus di yang

bayarkepadanegara"
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It can be explained as Tax Assessment System is one of the way used to calculate

how much a taxpayer need to pay the tax to the country.

According to Abbi (2016), there are 3 types of tax assessment system:

I. Ditentukanolehpemerintahatau Negara

Sistempemunguanpajakinimemberiwewenangkepadapemerintah

(fiskus) untukmenentukanbesarnyapajak yang terutangolehwajibpajak

Cara pemungutanpajakdenganditentukanolehpemerintahata Negara

iniadakelemahanyaituwajibpajaktidakbisamenolakberapapunpajak

yang di hitungdan di

bebankankepadanyaDitentukanolehWajibPajakSistem

II. Pemungutanpajakinimemberiwewenangkepadawajibpajakuntukmenen

tukansendiribesarnyapajakterutang. Cara

pemungutanpajakinijugamempunyaikelemahanyaituwajibpajakakanm

enghitungsekecilkecilnyapajak yang harusdiabayarkankepada Negara

karenatidaksemuawajibpajakjujurmenghitungpajaknyadan

III. Ditentukanolehpihak lain

Pengertianditentukanolehpihak lain

yaitusistempemungutanpajakvangmemberiwewenangkepadapihakketig

auntukmenentukanBesarnyapajak yang terutang

It can be explained as:

1. Official Assessment System

This tax assessment system is giving the tax collector an authority for

determining the amount of tax payable of the taxpayer. There is a

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disadvantage from this system, taxpayer cannot refuse how much tax he or she

need to pay:

2. Self Assessment System

This tax collection system gives an authority to taxpayers to themselves

the amount of tax payable. This tax collection also has the disadvantage,

taxpayers will calculate the tax he should pay to the State as low as possible,

because not all taxpayers are honest in calculating their tax; and

3. Withholding System

The understanding of determined by third party (neither taxpayer nor tax

collector) is a system which giving an authority to a third party for

determining the amount of tax payable.

2.1.4. Terms of Tax Collection

According to Mardiasmo (2016), in order not to inflict detention and

opposition, tax collection should fulfill some requirements bellows:

I. Pemungutanpajakharusadil (SyaratKeadilan)

Sesuaidengantujuanhukum, yaknimencapaikeadilan,

undangundangmaupunpelaksanaanpemungutanpajakharusadil.

Adildalamperundangundangandiantaranyamengenakedanmerata,

sertadisesuaikandengankemampuanmasing -

masingSedangadildalampelaksanaannyayaknidenganmemberikanhakb

agiWajibPajakuntukmengajukan banding kepadaPengadilanPajak.

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II. Pemungutanpajakharusberdasarkanundangundang (SyaratKeadilan)

Di Indonesia pajakdiaturdalam UUD 1945 pasal 23 ayat 2. Hal

inimemberikanjaminanukumuntukmenyatakankeadilan, baikbagi

Negara maupunwarganya

III. Tidakmenggangguperekonomian (SyaratEkonomis)

Pemingutantidakbolehmengganggukelancarankegiatanproduksimaupu

rperdagangansehinggatidakmenimbulkankelesuanperekonomianmasy

arakat

IV. Pemingutanpajakharusefisien (SyaratFinansil)

Sesuatdenganfungsibudgetair,

biayapemunguianpajakharuslebihreniahdarihasilpemunguiamya

V. SistempemunguianpajakharussederhanaSistempemunguian yang

sederhanaakanmemudahkandanmendorongmasyarakatdalammemenu

hikewajibanperpajakannyaSyaratitelahdipenuhiolehundangundangper

pajakanbaruContoh

a. Bea materaidisederhanakandari 167 macamtarifmenjadi 2

inimacamtarif

b. Tarif PPN yang

beragamdisederhanakanmenjadihanyasatutaryyaitu 10 % .

c. Pajakperseroanuntukbadandanpajakpendapatanuntuperseor

angandisederhanakanmenjadipajakpenghasilanPPn yang

berlakubagibadanmaupunperseorangan (orang pribadi

It can be explained as:

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1. Tax collection must be fair (SyaratKeadilan)

In accordance with the purposes of the law, namely to achieve justice laws,

and the implementation of tax collection must be fair. Fair in the laws

including taxing in general and evenly, and adjusted to capabilities of each.

Being fair in its implementation by providing the right for taxpayers to file

objections, delays in payment and appealed to the Tax Court.

2. Tax collection must be based on Laws (SyaratYuridis)

In Indonesia, taxes are stipulated in the 1945 Constitution in article 23

paragraph 2. This provides legal guarantees toward justice, and both for the

nation and its citizens.

3. It doesn't interfere the economy (SyaratEkonomis)

Tax collection must not interfere the fluency of production activity and trade

so it will not cause the sluggishness of the economy.

4. Tax collection must be efficient (SyaratFinansil)

In accordance to budgeting function, the amount of tax collection fee should

be lower than voting of tax collection.

5. Tax collection system must be conservative

A conservative system of tax collection will make the citizen easier in

fulfilling their tax obligations. These terms has been fulfilled by new taxation

laws.

Example:

a. Revenue stamps are conservation from 167 kinds of fares into 2 5. kinds

of fares,
 17

b. Varies of PPN fares are conservation to only one fare , 10 % ,

c. Company tax for entity or income tax for individual are conservation into

income tax (PPh) that is applied for entity or individual.

2.2 SUBJECT OF TAX

As Referred to Article 2 Income Tax Law Number 36 of 2008, the subjects of tax

are as follow:

1. Tax subject consists of

a. Individual and undivided inheritance as a unit of lieu of the

beneficiaries;

b. Entity: and

c. Permanent establishment

2. A permanent establishment is a subject of tax which is treated as the same as

corporate

3. Tax subjects are divided into resident taxpayer and non-resident taxpayer

4. The term "resident taxpayer" means:

i. An individual who resides in Indonesia, the individual who has been in

Indonesia for more than 183 ( one hundred and eighty- three) days

within aperiod of twelve (12) months, or an individual who has been

residing in Indonesia within a particular period of taxable year and has

the intention to live in Indonesia

ii. An entity established or domiciled in Indonesia, except for certain unit

of government entities that meet the following criteria:

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1. The establishment is under the provisions of the legislation

2. The financing sourced from the State Budget or Local

Government Budget;

3.The revenues included in the State Budget or Local

Government Budget, and

4. The bookkeeping audited by the government auditor; and

iii. Any undivided inheritance as a unit of lieu of the beneficiaries.

5. The term "non- resident taxpayer" means:

i. An individualwho does not reside in Indonesia, who has been present in

Indonesia less than 183 Cone hundred and eighty-three) days within a

period of twelve (12) months, and entities which are not established or

domiciled in Indonesia running a business or carrying out activities

through a permanent establishment in Indonesia; and

ii. An individual who does not reside in Indonesia, who has been present in

Indonesia less than 183 (one hundred and eighty-three ) days within a

period of twelve (12) months , and entities which are not established or

domiciled in Indonesia, which can be deriving income from Indonesia

not from conducting business or engaged in activities through a

permanent establishment in Indonesia. A permanent establishment is an

establishment used by an individual who does not reside in Indonesia,

an individual who has been in Indonesia less than 183 (one hundred and
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eighty-three) days within a period of twelve (12) months, and entities

which are not established and domiciled in Indonesia for conducting

business or conducting activities in Indonesia.

a. Management position;

b. Branch of company

c. Representative of office

d. Factory

e. Workshop

f. Warehouse

g. Space for promotion and sales:

h. Mining and quarrying of natural resources

i. Mining area of oil and gas;

j. Fisheries, animal husbandry, agriculture, farns or forestry

k. Construction, installation or assembly project:

l. Provisions of any kind of service by employees or o than 60

(sixty) days within a period of 12 (twelve) months;

m. Individual or entity act as an agent whose position is not free:

there done by more

n. Agents or employees of an insurance company which are not

established or domiciled in Indonesia received the insurance

premium or risk in Indonesia; and

o. Computers, electronic agents, or automatic equipment owned,

leased, or used by the organizers of electronic transactions to

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conduct business via the internet. o. (Directorate General of Tax,

2013)

2.3. OBJECT OF TAX

As referred to Article 4 Taxation Law Number 36 of 2008, the objects of tax.

are:

1. Taxable object is the income that each additional economic capability received

or accrued by the taxpayer , whether originating from Indonesia and outside

Indonesia , which can be used for consumption or to increase the wealth of the

taxpayer concerned, in the name and any form , including:

a. Compensation or remuneration related to work or services received or acquired,

including salaries, wages, allowances, fees, commissions, bonus, gratuity, pension, or

compensation in any other form, unless otherwise stipulated in this law

b. Lottery prizes, or gifts in respect of employment or activities, and reward;

c. Business profits

d. Gainsfrom the sale or transfer of property, including:

2. Gainsfrom transfer of property to the company, partnerships, and other

entities in lieu of shares or equity

3. Gainsfrom the transfer of property to shareholders, partners or members

acquired the company, partnerships, and other entities

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4. Gains from a liquidation, merger, consolidation, expansion, split or

acquisition, or reorganization under any name or any form

5. Gains from the transfer of property in the form of grants, aid or donations,

except those given to the family by blood in the direct lineage of the degree and

religious bodies, educational institutions, social agencies including foundations,

cooperatives, or private persons who run micro and small enterprises, which

provisions further stipulated by the Minister of Finance, as long as there is no

relationship with the effort, work, ownership, or control between the parties

concerned; and

6. Gainsfrom the sale or transfer of part or all of the mining rights, participation

in the financing, or capital in mining company;

e. Refund of tax payments which already deducted as an expense and any

additional payment of tax refund;

f. Interest including premiums, discounts and rewards for loan repayment

guarantees;

g. Dividends, in whatever name and any form, including dividends from

insurance companies to policyholders, and the distribution of net income of the

cooperative

h. Royalty or compensation from the use of right

i. Rents and other income from the use of property;

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j. Annuities;

k. Gains from the discharge of indebt up to a certain amount stipulated by

Government Regulation:

l. Gains from foreign exchange;

m. Gains from revaluation assets:

n. Insurance premium;

o. Contribution received by or accrued by an association from its members who

are taxpayers engaged in business or independent services;

p. An increase in net wealth derived from income which has not been taxed;

q. Income from sharing business:

r. Compensation as stipulated by Laws concerning General Provisions and Tax

Procedures; and

s. Surplus of Bank Indonesia

2. Income that included as final income tax a:

a. Income in the form of interest on deposits and other savings, interest on bonds

and government securities, and savings interest paid by the cooperative to its

individual members

b. Income in the form of Lottery prizes:

 23

c. Income from a transaction of shares and other securities, derivatives

transactions traded on the exchange, and the sale of shares or transfer of

capital contributionfrom its company's partner received by a venture capital

company

d. Income from transfer of property in the form of land and/or buildings

construction services business, real estate business, and rental of land and/or

buildings; and

e. Other certain incomes, which are stipulated by or based on a Government

Regulation. (Directorate General of Tax, 2013)

2.4. FUNDAMENTAL OF INCOME TAX IMPOSITION

Income Tax is a tax that governments impose on financial income generated

by all entities within their jurisdiction. By law, businesses and individuals must file

an income tax return every year to determine whether they owe any taxes or are

eligible for a tax refund. Income tax is a key source of funds that the government uses

to fund its activities and serve the public.

According to the provision and taxation law of Indonesia, there are two

classes of taxpayer, namely resident taxpayer and non-resident taxpayer. For resident

taxpayer, there are basically two methods for determining the amount of taxable

income, namely the bookkeeping method (for them who keep books of account and

records) and application of deem profit method (for them who are not obliged to keep

books).
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There are also two classes of resident taxpayer, namely individual taxpayer

and entity taxpayer. According to the provision and taxation law of Indonesia that

only individual taxpayer who can use bookkeeping method or deem profit method.

For entity taxpayer who can only use bookkeeping method as their basic of

determining their taxable income.

2.4.1. Bookkeeping Method

Bookkeeping is the recording process is done on a regu collect data lar basis

to and financial information including assets, liabilities, capital, income, and

expenses, and the total acquisition price and the delivery of goods or services, which

closed with the preparation of financial statements in the form of balance sheet and

income statement in any tax year ends. Bookkeeping has a very important role, which

is as starting point for documenting the tax calculation Without books, no one can

know for sure how much the actual tax owed However, not all taxpayers are required

to make bookkeeping, especially for certain individual taxpayers who under the terms

of taxation is excluded Individual taxpayers still have to do the records, that is series

of activities to collect data on a regular basis in the form of turnover or gross receipts

or gross income and as a basis for calculating the amount of tax payable, also referred

to income tax and is not an object or a subject to final tax. (Target Consulting Group,

2014)

According to the provisions of taxation, party obligated to conduct the

bookkeeping is as follow:
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1. An individual who conducting business or independent (Gross Profit over

Rp4,800,000,000,- one year)

2. Taxpayer in Indonesia. (Target Consulting Group, 2014)

In principle, the organization of the bookkeeping cannot be done There are

standards that have to be done by any taxpayer, that is:

1. Books or records arbitrarily must was held with attention to good faith and

reflect the situation or the actual business activities;

2. Books or records shall held in Indonesia using Latin letters, Arabic numerals,

the currency of the Rupiahs, and arranged in Indonesian or foreign language is

permitted by the Minister of Finance;

3. Bookkeeping held with principle of consistent and with stelsel accrual or

stelsel cash;

4. Changes to books methods and or financial year, must be approved from the

Directorate General of Tax;

5. Bookkeeping at least consists of records of assets, liabilities, capital, income

and expenses, sales and purchases, which can be calculated the amount of tax

payable;

6. Bookkeeping using foreign languages and currencies other than the Rupiahs

can be held by the taxpayer after obtaining the permission of the Minister of

Finance;

7. The books, records, documents that became the basis of the books or records

and other documents required to be kept for 10 (ten) years in Indonesia, which is
 26

placed in a residential activity or an individual taxpayer, or the domicile of the

taxpayer entity;

8. Bookkeeping should be held in a way or system that is commonly used in

Indonesia for example by the Financial Accounting Standards, except taxation

legislation otherwise requires. (Target Consulting Group, 2014)

Purpose of Implementation Bookkeeping/recording is to case:

1. Filling a tax return

2. Calculation of Taxable Income

3. Calculation of Value Added Tax (VAT) and VAT for luxury sales,

4. Implementation bookkeeping also to know the financial position and results of

business activities.

Based on the Provision and Taxation Law of Indonesia, every Income statements

that provided by the company must be based on the standard of tax is called fiscal

income statement. Besides that, the financial statement resulted from most companies

are based on Financial Accounting Standard (FAS) is called as commercial income

statement. Financial Statements is the result of the accounting process that can be

used as a tool to communicate the company's financial data or activity to the parties

concerned. The parties concerned on its financial position nor development of the

company is divided into two, which is internal parties such as corporate management

and employees, and the second is the external parties such as shareholders, creditors,

government, and society. So it can be concluded that the financial statements are an

information tool that connects companies with the parties concerned, which shows

the company's financial health and performance. Special purpose financial statements
 27

is to present fairly and in accordance with the accounting principles generally about

the financial position, results of operations and other changes in financial position.

Whereas in StandarAkuntansiKeuangan explained the purpose of the financial

statements containing the following: The purpose of financial statements is to provide

information regarding the financial position, performance and changes in financial

position of an enterprise that benefits a large number of users in making economic

decisions". (Hery, 2014)

Fiscal reconciliation conducted by the taxpayer because there are different

calculations, especially profit according to accounting (commercial) with profit

according to taxation (fiscal). The financial statements of commercial or business

aimed to assess the economic performance and financial condition of the private

sector, while fiscal financial statements is intended to calculate taxes. for interests

commercial or business, financial statements prepared based on generally accepted

principles, the Financial Accounting Standards while for the benefit of fiscal,

financial statements are prepared under the rules of taxation (Income Tax Act referred

to as the Income Tax Act). The second difference the basis of preparation of the

financial statements resulted in a difference of earnings (loss) of an entity (the

taxpayer).

Expenditures incurred by a Taxpayer can be divided into deductible expenses and

non-deductible expenses. Basically, deductible expenses are those having a direct

relationship with the business or activities for earning, collecting and securing income

which constitute a taxable income, the expensing of which may be made in the year
 28

of disbursement or over the useful life of the expenditure.Non-deductible expenses

comprise those constituting consumption of income, for those which exceed fairness.

2.4.1.1. Deductible Expenses

As referred to Article 6 of Income Tax Law Number 36 of 2008, there are several

deductible expenses, such as:

a. Costs which are directly or indirectly related to business, among others:

b. Depreciation of tangible assets and amortization of rights and other which

have useful life or more than 1 (one) year which the rate and the useful life for

depreciation and amortization will be shown below:

Table 2.1

Depreciation Rate For Tangible Assets

Group Of Tangible Assets Useful Strai Declinin

Life ght g

Line Balance

I. Non–Building

Class: 4 25% 50%

Group 1 years 12,5 25%

Group 2 8 % 12,5%

Group 3 years 6,25 10%

Group 4 16 %

years 5%
 29

II. Building Class: 20

Permanent years

Non - 5%

Permanent 10%

20

years

10

years

Source Directorate General of Tax (2014)

Table 2.2

Amotization Rate ForInstageable Assets

Depreciation

Rate

Group Of Useful Straight Declining

Tangible Life Line Balance

Assets

Group 1 4 years 25% 50%

Group 2 8 years 12,5% 25%

Group 3 16 years 6,25% 12,5%

Group 4 20 years 5% 10%

 30

Source Directorate General of Tax (2014)

c. Contributions to a pension fund which its establishment is approved by the

Minister of Finance;

d. Losses incurred from the sale or transfer of properties owned and used in

business or used for r the purpose of earning, collecting and securing income

e. Losses from foreign exchange:

f. Costs related to research and development carried out in Indonesia

g. Scholarships, apprenticeships and training expenses

h. Debts which are actually uncollectible

i. Donation for national disaster which is stipulated by a Government

Regulation

j. Donation for research and development conducted in Indonesia which is

stipulated by a Government Regulation

k. Costs of social infrastructure development which is stipulated by a

Government Regulation; Donation in the form of education facilities which is

stipulated by a Government Regulation;

l. Donation for sport enhancement which is stipulated by a Government

Regulation. Directorate General of Tax, 2014)

If a loss is incurred after the expenditures allowed have been deducted from

income, the loss may be offset against net income or taxable profit for over 5 (live)

successive years starting from the year following that in which the loss is incurred.

The sample is as follow:

 31

In 2013, PT “Asri” suffer a tax loss Rp.1.200,000,00. In the following 5 (five)

years, the taxable profit/loss of PT. “Asri” is as follow:

2014:Tax Profit Rp.200.000.000.00

2015:Tax Loss (Rp.300.000.000.00)

2016:Tax Profit -Nil-

2017: Tax Profit Rp.100.000.000.00

2018: Tax Profit Rp.800.000.000.00

Calculation of the loss is as follows:

Tax Loss in 2013 (Rp1.200,000,000.00)

Tax Profit in 2014 Rp.200,000.000.00 (+)

Balance of Tax Loss from 2013 (Rp.1,000,000,000.00)

Tax Loss in 2015 (Rp.300.000,000.00)

Balance of Tax Loss from 2013 (Rp.1,000,000,000.00)

Tax Profit in 2016 Rp. Nil (+)

Balance of Tax Loss from 2013 (Rp.1.000,000,000.00)

Tax Profit in 2017 (Rp.100,000,000.00) (+)

Balance of Tax Loss from 2013 (Rp.900,000,000.00)

Tax Profit in 2018 Rp.800,000,000.00 (+)

Balance of Tax Loss from 2013 (Rp.100,000,000.00)

Source: Directorate General of Tax, 2013

 32

The balance of tax loss from 2013 amounting to Rp.100,000,000.00 in year 2018

may not be offset against tax profit in year 2019 since the 5 years period hasalready

expired, however, the tax loss in 2015 amounting to Rp.300,000,000.00 may be offset

against tax profit in 2019 and 2020, because the 5 years period for this loss in 2016

and finishes at the end of year 2020

2.4.1.2 Non- Deductible Expenses

As referred to Article 9 Income Tax Law Number 36 of 2008, there are several

Non- Deductible Expenses from gross income are as follows:

a. Distribution of profit in whatever name or form, such as dividends. including

dividends paid by an insurance company to policyholders, and any

distribution of the surplus by a cooperative

b. Expenses charged or incurred for the personal benefit of shareholders

partners, or members;

c. Formation or accumulation of reserves, except

1. Reserve for bad debt of a bank and other business which conduct business

as a creditor, financial lease company. consumer finance company and

factoring company:

2. Reserves in an insurance business including reserve for social aid made

by Social Security Agency;

3. Guarantee reserve for Deposit Guarantor Institutions;

4. Reserves for cost of reclamation in general mining:

5. Reserves for cost of reforestation in forestry business:

 33

6. Reserve for closing and maintaining industrial waste site conducted by

industrial waste processing business which the terms and conditions

ofwhich shall stipulated by od based on the Minister of Finance

Regulation

d. Insurance premium for health, accident, life, dual purposes, and education

insurance which are paid by an individual Taxpayer, except those paid by an

employer where premiums is treated as income of the Taxpayer

e. Consideration or remuneration related to employment or services given in the

form of a benefit in kind, except provision of food and beverages for

employees or consideration or remuneration given in the form of a benefit in

kind in certain regions and in connection with employment as stipulated by or

based on the Minister of Finance Regulation;

f. Excessive compensation paid to shareholders or other associated partied as a

consideration for work performed;

g. Gifts, aid or donations, and inheritances as referred to in Article 4 paragraph

(3) subparagraph a and subparagraph b, except donations as referred to in

Article 6 paragraph (1) subparagraph () to subparagraph m and Zakat

received by an Amil Zakat Board or other Amil Zakat institutions established

or approved by the government or compulsory religious donation for the

followers of religions acknowledge by the Government received by religious

institutions established and approved by the Government, which are by or

based on a Government Regulations:

h. Income tax
 34

i. Cost incurred for the personal benefit of a Taxpayer or his dependents;

j. Salary paid to a member of an capital of which does not consist of stocks:

k. Administrative penalty in the form of interest, fines, and surcharges, as well

as criminal penalty in the form of fines imposed pursuant to the tax laws

Directorate General of Tax, 2013)

l.

2.4.2. Deemed Profit Method

Norma Penghitunganadalahsuatupedoman yang

dapatdipakaisebagaicarauntukmenentukanperedaranbrutoataupenerimaanbrutodan

yang padaakhirnauntukmenentukanpenghasilannetto. (DirektoratJenderalPajak,

2013, p.154)

It can be explained as: Deem Profit Method is a guideline that can be used s a

method to determine gross income or gross enrollment and finally will be used to

determine net income.

Based on PER-17/PJ/2015, Deem Profit Method grouped by region as follows:

the first 10 (ten) provincial capitals of Medan, Palembang, Jakarta. Bandung,

Semarang, Surabaya, Denpasar, Manado, Makassar, and Pontianak; the second is

other provincial capitals; and the third is other areas.

The formula to calculate taxable income by using deemed profit is shown below:

= Net Income- Non-Taxable Income

= (Annual Gross Income x Percentage of deemed profit)- Non-Taxable Income

(Wibowo, 2015)
 35

As stated in Article 14 Number 36 of 2008, there are some exemptions for certain

individual taxpayer who are allowed to use Deem Profit Method concerning Income

Tax which is mainly applied under the following conditions:

1. Deemed profit to determine net income shall be formulated and adjusted from

time to time, and issued the Directorate General of Taxes. The latest table of

the deemed profit percentage is issued by the Directorate General of Taxes on

the 8h June 2015, that is PER-17/PJ/2015 concerning deemed profit. The table

of percentage is as below:

2. An individual taxpayer whose gross income of business activities or

independent service in one year is less than Rp 4,800,000.000.00, may

calculate his net income by applying the deem profit, with the condition thatit

is communicated to the Directorate General of Taxes within the first three

months of the taxable year concerned

3. A taxpayer who calculated net income using the deem profit method, shal be

obliged to keep records on gross income as regulated in the Law on General

Rules and Procedures on Taxation

4. A taxpayer who fails to inform the Directorate General of Taxes to choose

deemed profit is deemed to choose to keep books of account (Bookkeeping

Common Calculation Method).

5. A taxpayer who is obliged to keep books of account or records, but:

a. Fails to or not fully keep complete books of account or records;

b. Fails to reveal the books of account or records or their supporting

evidence during the audit Therefore, his gross income will be calculated on
 36

other basis determined by or based on the Minister of Finance Regulation

since the real gross income in unknown and his net income will be calculated

on the basis of deemed profit.

6. The Minister of Finance may adjust the limit of gross income as the

requirement to be able to use the deemed profit, regarding to the economic

development and the capability of taxpayers to keep books of account.

Directorate General of Taxes, 2013)

2.5. PERSONAL. EXEMPTIONS

Based on Article 7 Income Tax Law Number 46 of year 2008, individual

taxpayer has the right to deduct their Taxable Income with Non- Taxable income The

amount of the Non- Taxable Income is as follow

a. 15,840,000.00 (fifteen million eight hundred and forty thousand rupiah) for

an individual Taxpayer;

b. Additional Rp.1,320,000.00 (one million three hundred and twenty thousand

rupiah) for a married taxpayer,

c. Additional Rp.15,840,000.00 (fifteen million eight hundred and forty

thousand rupiah) for married taxpayers' spouse provided they file a joint tax

return as referred to in paragraph (1) of article 8:

d. Additional Rp.1,320,000.00 (one million three hundred and twenty thousand

rupiah) for each dependent family member related by blood and by marriage

in a direct lineage, and an adopted child with a maximum of three

dependents.
 37

Based on the Regulation of the Minister of Finance No.

162/PMK.011/2012 .dated on 22md October 2012, the be effective as of 1 t January

2013.

The government has set the new regulation that will has The government has

raised the amount of Non - Taxable income, which is iouslyRp 15,840,000.00 (fifteen

million eight hundred and forty thousand rupiah) per year raise up to

Rp.24,300,000.00 (twenty four million and three hundred thousand rupiah) per year

or Rp.2.025,000.00 (two million and twenty five thousand rupiah) per month for

every single taxpayer as well as for any additional dependents, who is a married

Taxpayer.

In the year of 2015, government assigned new regulation and re-upped the

amount of Non - Taxable income to be deducted. It has been set in the Regulation of

the Minister of Finance No. 122/PMK.010/2015. The government re-upped the

amount of Non Taxable income which is previously Rp.24,300,000.00 (twenty four

milion and three hundred thousand rupiah) per year into Rp.36,000,0000 four million

thirty six million rupiah) per year or Rp.3,000,000.00 (three million rupiah) per

month for every single taxpayer as well as for any additional dependents, who is a

married Taxpayer

Therefore, for each individual whose net income is less than the amount of

Rp.3,000,000.00 (three million rupiah) will not be subjected to pay Income Tax

which is based on the Regulation on the Minister of Finance no. 122/PMK.010/2015

concerning about the increases of the amount of the Non - Taxable income in year

2015.
 38

Under Income Tax Provisions, Directorate authority to adjust the personal

exemption by taking into consentrationeconomics General of Tax is given an

monetary developments as well as development in the annual cost of living index.

Sample of determining Non - Taxable Income is as follows:

Taxpayer "A" has a wife and 4 (four) dependent children. If his wife has income

from an employer who has withheld income tax under Article 21 and the employment

has no relationship to business of her husband or other members of the family, the

non- taxable income of Taxpayer "A" is Rp.21,120,000.00 fi.eRp 15,840.000.00+

Rp.1,320,000.00+(3 x Rp.1,320.000.00). Whereas for the wife, at the time of Article

21 tax withheld by her employer, there is a personal exemption, the non - taxable

income granted to Taxpayer "A" would be Rp.36,960.000.00 ti.eRp 21,120.000.00+

Rp.15,840,000.00) Directorate General of Tax, 2013

2.6. THE DIFFERENCES BETWEEN BOOKKEEPING METHOD AND

DEEMED PROFITMETHOD

A few things to note in doing bookkeeping or deemed profit is:

1. Bookkeeping or deemed profit must be made in good faith and reflect

circumstances or actual business activities.

2. Bookkeeping or deemed profit to be held in Indonesia using Latin letters,

Arabic numerals, the currency of the Rupiahs, and arranged in Indonesian or foreign

language is permitted by the Minister of Finance

 39

3. Bookkeeping organized and consistent with stelsel accrual or stelsel cash

Changes to the methods and or fiscal year, must be approved by the Director

General of Taxes.

4. Bookkeeping at least consists of records of assets, liabilities, capital, income

and expenses, as well as sales and purchases, which can be calculated the amount of

tax payable.

5. Bookkeeping using foreign languages and currencies other than the Rupiahs

can be held by the taxpayer after obtaining permission from the Minister of Finance.

(Resmi, 2009)

According to Purwono (2010) the differentiation of bookkeeping and deemed

profit such as:

1. Bookkeeping must record all transactions associated with assets, liabilities or

debt, equity, income and expenses, whereas deemed profit only obliged to record

the distribution of business or gross income.

2. Bookkeeping required to prepare financial statements (Balance Sheet and

Income Statement) as a recapitulation of the books, whereas deemed profit do not

need to prepare financial statements.

3. Taxable income is based accounting can only be known after the preparation of

the financial statements, whereas taxable income based on the deemed profit is the

same as the total number of records (gross income).

4. Bookkeeping recognize Income, whereas deemed profit does not recognize gain

or loss.
 40

2.7 TAX RATE

Tax rate that is applied to the taxable income for individual taxpayers in the

country of Indonesia is as shown in Table 2.1 For the application of the tax rate, that

amount of taxable income should be rounded down in thousand

Table 2.3

Tax Rate Taxable Income For Individual Taxpayer

Taxable Income Brackets Tax Rate

Rp.50,000,000.00 5%

Over Rp.50,000,000.00 – 15%

Rp.250,000,000.00

Over Rp.250,000,000.00 – 25%

Rp.500,000,000.00

Over Rp.500,000,000.00 30%

Source: Arifin,2013

The sample of calculation of tax payable of individual taxpayer is as follow:

Taxable Income Rp.600,000,000.00

Income Tax Payable:

 41

5% x Rp.50,000,000.00 = Rp.2,500,000

15% x Rp.200,000,000.00 = Rp.30,000,000

25% x Rp.250,000,000.00 = Rp.62,500,000

30% x Rp.100,000,000 = Rp.30,000,000 (+)

= Rp.125,000,000

Source Arifin,2013

2.8 INCOME

According to Ismaya (2006,p.503) income is as follow:

“penghasilanadalahkenaikanmanfaatekonomiselamasuatuperiodeakutansi

dalambentukpemasukanataupenambahanaktiva tau penurunankewajiban yang

mengakiatkankenaikanekuitas yang tidakberasaldarikontribusipenanaman

modal”.

It can be explained as income is a increases in economics benefits during the

accounting period in the form of income or additional assets or decreases of liabilities

that result in increases in equity that do not originate from the contribution of

investment.
 42

CHAPTER 3

RESEARCH METHODOLOGY

3.1. RESEARCH OBJECT

The research is conducted at a company named PT. PanjiEka Lestari, , which

was established in 1995, Medan, North Sumatra, Indonesia. This company is mainly

focusing on importing stones from various countries around the world, including

Indonesia, Thailand, and many various South East Asian and European countries.

Additionally, the local marbles are obtained from Sulawesi and Java. The company is

located at Jl.Dr. FL.Tobing no.123/129. Medan

Data used in this research is analyzing the elements of transaction such as

income, costs and expenses, or gross income circulation for the 2014-2018

accounting period to calculate the payable income tax payable on the bookkeeping

method and Profit Method.

3.2. DATA COLLECTION METHODS

The author uses secondary data in the form of internal accounting in 2015 to

2018, status of taxpayer and gross income circulation from 2015 to 2019 that are
 43

provided by PT. PanjiEka Lestari. To compile relevant data, the writer will do an

observation and collect data from the tax staff and the financial manager of PT

PanjiEka Lestari in order to gather information about the presentation of internal

bookkeeping, gross income recapitulation especially revenue circulation, the method

of calculating taxable income, the way of calculating company income tax payable,

and other information needed to do this research.

3.3 DATA ANALYSIS METHOD

The research conducted was a case study, where the development of the

concept, and fact gathering conducted by researcher collection were carried out by the

researcher without applying and the writer used descriptive methods to analyze the

data. Data obtained through observations in the company are compiled, processed,

then analyzed and compared with theoretical backgrounds. In this study, the author

tries to describe, record and interpret the conditions that occur at this time. In other

words, this study aims to obtain information about the current situation into an

existing theory. The hypothesis and looking at the steps to analyze the data in this

study are:

1. Evaluate the elements in the data obtained from the company to calculate

the income tax payable based on Bookkeeping and Profit Calculation Calculated

2. Determine the calculation the amount of income tax owed on taxable

income based on bookkeeping and calculation of profits made by the author

3. Comparing the calculation of the income tax payable from the calculations

made by the author

 44

4. Providing conclusions from the research conducted, impacting the company

and also providing recommendations which method is suitable to be applied at PT.

PanjiEkaLestari , Medan , Sumatera Utara.

CHAPTER 4

RESULT AND ANALYSIS

4.1 COMPANY HISTORY

PT PanjiEka Lestari is a company that engaged in providing luxury-building

material and also provides services in creating various marble and granites related

project. This company was firstly formed in 1995 and our first project was handling a

small project in CemaraAsri housing. We also handle the quarry in Sulawesi for

sourcing the local marbles.

The purposes of this company are to provide natural and man-made marble

and granite stones to the customer as there are always high deemeds for this kind of

stones whenever there is a construction, especially in hotel or housing construction.

As we know that marble and granites can be formed into many purposes, such as

kitchen aisles, flooring, furniture, and assorted accessory items.

 45

4.2 ORGANIZATION STRUCTURE

Figure 4.1

The Organization Structure of PT. PanjiEka Lestari is as follow:

Director

HR

Financial Manager

Finance & Sales

Administration

Source: PT PanjiEka Lestari

Division of tasks and needs to be done to help complete the work and achieve

a goal from the PT PanjiEka Lestari. The following is the division of duties and

authority of the PT PanjiEka Lestari based on a predetermined organizational

structure.

1. Director.
 46

The Director has a complete authorization based on organizational structure,

namely:

a. Enforcing business strategy

b. Maintains budgets for managed entity as well as the individual projects it

takes on

c. Creates initiatives to take advantage of market opportunities, reduce

operational threats, forestall business risks, and maximises core strengths

d. Directs and supervises the activities of staff

2. Financial Manager

Financial manager has duties and authority based on organizational structure,

namely:

a. Verifying every single transaction in PT panjiEka Lestari

b. Organizing the cash flow in the company

c. Handling the paperwork for every clientele transaction

d. Leading the finance and administration department

3. Human Resources ( HR) Department.

HR Department has duties and authority based on organizational structure,

namely:

a. Handling the BPJS for the employees

b. Involved in employees recruitment process

c. Monitoring administration process related to HR

 47

d. responsible for managing and developing human resources

1. Administration and Finance Section

The Administration and Finance Section has duties and authorities based on

the organizational structure, namely:

a. Receiving payments made by clients in accordance with the deed made

b. Record payments from clients that have paid off or not paid off

c. Make reports on income and expenses

d. Conduct checks on all income and expenses

e. Make financial statements that will be submitted to the financial manager

and director.