INCOME TAX

(Pajak Penghasilan / PPh)

by:
Siti Ruhama Mardhatillah
 The Regulation of PPh

• Undang-Undang Nomor 7 Tahun 1984 tentang Pajak Pengha

silan applied since January 1st 1984.
• That Act had been revised for several times, and the last
amendment was by UU Nomor 36 Tahun 2008.
 The Subjects of PPh

1. Private persons;
2. Undivided inheritance;
3. Permanent establishments (Bentuk Usaha Tetap / BUT)
4. Corporate legal entity: PT, perseroan komanditer, state/local
owned enterprises (BUMN/BUMD), persekutuan,
perkumpulan, yayasan, mass organisations, social political
organisations, or other organisations, institutions, and the
other names including contract of collective investment.
 The Domestic Subjects of PPh
• Private persons live in Indonesia, private persons live in
Indonesia more than 183 days in a year, or private persons live
in Indonesia for a tax year and have intention to live in
Indonesia;
• Institutions of legal entity that are established or located in In
donesia, except of government institutions classified as:
1). The establishment is based on Indonesian law; 2). The
financial sources come from APBN/APBD; 3). The returns are
for APBN/APBD; and 4). The bookkeeping is audited by the
agency of state supervision; and
• Undivided inheritance as a unit replaces those who are
entitled.
 The Foreign Subjects of PPh
• Private persons who do not live in Indonesia; private
persons live in Indonesia less than 183 days in one year,
and legal entities which are not established and not
located in Indonesia conducting their business through
permanent establishment in Indonesia.
• Private persons who do not live in Indonesia; private
persons live in Indonesia less than 183 days in one year,
& legal entities which are not established and not located
in Indonesia receiving income from Indonesia not from
conducting business in Indonesia through permanent
establishment.
 The Differences between Domestic & Foreign
Tax Payers
Domestic Tax Payers
The tax is imposed on received
income from both inside & outside
Indonesia
The tax is imposed on net income
The tariff used is progressive tariff
determined in Article 17
Having an obligation of SPT report
Foreign Tax Payers
The tax is imposed only on received
income from inside Indonesia
The tax is imposed on brutto income
The tariff used is commensurate tariff
determined in Article 26
Not having an obligation of SPT
report
 The Start and The End of Tax Subject
The Start
Private persons of domestic tax subject:
• When they were born
• When they are in Indonesia or have intention to liv
e in Indonesia
Legal entities of domestic tax subject:
• When they are officially established as well as legal
ly located in Indonesia
Foreign tax subject through permanent establishme
nt:
• When they start operating a business through per
manent establishment in Indonesia
Foreign tax subject not through permanent establish
ment:
• When they receive income from Indonesia
The End
Private persons of domestic tax subject:
• When they are passed away
• when they leave Indonesia forever
Legal entities of domestic tax subject:
• When they are officially dissolved or no longer lega
lly located in Indonesia
Foreign tax subject through permanent establishme
nt:
• Whey they no longer operate a business through p
ermanent establishment in Indonesia
Foreign tax subject not through permanent establish
ment:
• When they no longer receive in come from Indones
ia
 Not Classified as Tax Subject
• The representative offices of other countries, such as: embassy &
general consulate offices;
• The diplomatic & general consulate officers or other representativ
e officers, including people working & living with them as long as:
not an Indonesian citizen & not receiving income outside from the
related jobs, and the same rules applied for Indonesia’s representa
tive in their countries (the reciprocity principle);
• International organisations, as long as:
• Indonesia is one of the members;
• Not conducting activities or business to get income from
Indonesia, except giving a loan to the government which
the fund is from the dues of the members.
 Not Classified as Tax Subject

• Officers of international organisation’s representatives,

as long as:
a. Not an Indonesian citizens;
b. Not conducting business, activities, or other
jobs in order to gain income from Indonesia.
 The Objects of PPh

The object of PPh is income, that is each of

addition of economic ability received by
the tax payers, either come from Indonesia
or outside Indonesia that enable to be used
in consumption or to add wealth of the tax
payers, in any names and forms
 PPh Article 21

PPh Article 21 is a tax imposed on income

including salary, wages, honorarium and oth
er payments in all kinds of names and forms
in regard with jobs/positions, services, and
activities conducted by domestic private
persons as determined in the Article 21.
The Basis of the Imposition of PPh Article 21
• To be able to count PPh, firstly, the basis of the tax imposition
should be determined.
• For domestic taxpayers, taxable income (penghasilan kena pajak /
PKP) is the basis of the tax imposition.
• For foreign taxpayers, brutto income is the basis of tax imposition.
• The amount of PKP for institutional taxpayers is counted as much
as the amount of netto income.
• The amount of PKP for private person taxpayers is counted as
much as netto income diminished with the untaxable income
(penghasilan tidak kena pajak / PTKP).
 So, What is Untaxable Income
(Penghasilan Tidak Kena Pajak / PTKP)

Part of income which is indeed

intended non taxable since it is
absolute amount needed to fulfil
primary necessity of taxpayers.
 The Amount of PTKP
PTKP per-year determined by Ministry of Finance. For 2020 P
TKP is still based upon Ministry of Finance Regulation No. 101
/PMK.010/2016:
• Rp 54.000.000 for taxpayers’ own self;
• Rp 4.500.000 as an additional amount for a married
taxpayer;
• Rp. 54.000.000 as an additional amount for a wife whose
income united into the husband’s income; and
• Rp. 4.500.000 as an additional amount for each family
member who are fully dependent to taxpayers (maximum
3 people).
 How to Count PTKP (1)
A married taxpayer has 1 child. So, his per-year
minimum PTKP as follow:
For taxpayer’s Rp. 54.000.000,-
own self
Married Rp. 4.500.000,-

1 child Rp. 4.500.000,-

PTKP Rp. 63.000.000,-

 How to Count PTKP (2)
A married taxpayer has 3 children & his wife is an
employee. So, his per-year minimum PTKP is:

Taxpayer’s own self Rp. 54.000.000,-

Married Rp. 4.500.000,-

Employed wife Rp. 54.000.000,-
3 children 3 x 4.500.000 = Rp. 13.500.000,-

PTKP Rp. 126.000.000,-

How to Count Taxable Income
(Penghasilan Kena Pajak)

Taxable income / penghasilan kena pajak

(PKP) for private person taxpayers is:

Netto income - PTKP

 Tariff of Tax
Article 17 of Income Tax Law determines
the income tax for domestic private person taxpayers as follow:

Levelling of Taxable Income (PKP) Tariff

Up to Rp. 50.000.000,- 5%

More than Rp. 50.000.000,- up to Rp. 250.000.000,- 15%

More than Rp. 250.000.000,- up to Rp. 500.000.000,- 25%

More than Rp. 500.000.000,- 30%

 Examaple
In 2019 Andi got taxable income (PKP) as mush as
Rp. 250.000.000,-. So, the nominal of PPh that must be
paid is:
PKP: Rp. 250.000.000,-
Nominal PPh must be paid is:
5% x 50.000.000 Rp. 2.500.000
15% x 200.000.000 Rp. 30.000.000

The total PPh Rp. 32.500.000

 Case 1

Gunawan is married and has 2 children.

In 2019, his netto income was Rp. 500.000.000,
How much PPh that must be paid by Gunawan?