TAXATION 1

Session 6
Individual Taxpayer

1
 SESSION 6
1.
TOPICS
Type of Individual Taxpayers and their b) Non-UMKM Business: Taxable
Tax Reporting obligation
2. Tax Calculation for Individual Taxpayer
with 1 Income Source
3. Tax Calculation for Individual Taxpayer
with more than 1 Income Source
4. Tax Calculation for Individual Taxpayer
Doing Business:
a) Small and Micro Business
(UMKM) Taxation: PP 23/2018,
Tax Incentives for UMKM
Income Calculation (Brief).
i. Fiscal Reconciliation Concept
ii. Identification of Object and
Non-Object of Income Tax
iii. Identification of Deductible
and Non-Deductible Expenses
iv. Loss Compensation
v. Calculation of Taxable
Income, Tax Payable and
Under/Overpayment
22
Agenda
01 Individual Taxpayer Income Tax
reporting

Income Tax Reporting for

02
Individual with 1 income source

Income Tax Reporting for

03
Individual entrepreneur

Income Tax Reporting for

04
Individual entrepreneur with
more than 1 income sources

3
 INDIVIDUAL
INCOME TAX
REPORTING

4
 COMMON
MISUNDERSTANDING
Individual Income Tax ITA 21
• ITA 21 is related to taxes that employers deduct (withheld) on income
received by workers (WP OP employee)
• ITA 21 that has been deducted by the employer will be a tax credit for
individual annual income tax calculation
• For Individual taxpayer who receive income from one employer and does
not receive any other income (other than those subject to final income tax
(ITA 4(2)), then the amount of ITA 21 withheld by the employer will be the
same as the annual income tax calculated by the individual him/herself
• The Tax Return = Nil Tax Return (no tax under/overpayment)

55
Tax Calculation – Domestic Individual
Taxpayer

• Individuals have tax obligations if they earned income above the Non-Taxable Income
Threshold (PTKP)
• Individual Taxpayers must perform tax calculations, payments and tax reporting each
year. (Perform a Self Assessment – as regulated in Indonesian Tax Law / System)
• The calculation, payment and reporting of Domestic Individual Taxpayers’ taxes
depends on
the position of the Individual Taxpayer:
• works for one employer
• works for more than one employer or professional doing independent work
• owns individual companies / businesses
• Tax reporting in accordance with the provisions of the KUP Law is carried out
no later than the end of the third month after the tax year - March 31 each year.
Tax payments are made prior to reporting date.

66
 Individual Taxpayer Tax Return

Individual Taxpayer Tax Obligations settlement depends on the income

received  The Tax Return format is different

• Receive income from one employer (for less than 60 million

rupiahs) and have no other income except bank interest and or
cooperative interest (Tax Return / SPT 1770 SS)
• Receive income from one employer (more than 60 million) ore
more and receive other income and income subject to final tax
(Tax Return / SPT 1770 S)
• Receive income from business or independent work and conduct
bookkeeping / sales record-keeping, receive other income and
income subject to final tax final (SPT 1770)

7
 PERSONAL INCOME TAX
CALCULATION
 Income received / earned by individual may consists of:
 Income from doing business / entrepreneurship: tax base is net income that can be calculated
using bookkeeping (based on accounting standard) and adjusted to conform tax rules (fiscal
reconciliation), for SME owner / independent worker the net income as the tax base can be
calculated using deemed profit norm of the total sales (turnover)
 Income that have been withheld by employer according to ITA 21
 Income that have been withheld by other taxpayers according to ITA 22, 23
 Income that become subject to ITA 4(2) (Final Tax)
 Income that is considered as a Non-Tax Object according to ITA 4(3)
 For the income received that have become subject to withholding tax, taxpayers must keep the
Income Tax Receipt (Bukti Potong)
 Self Assessment - Income Tax Calculation at the end of year:
 All (net) income are totaled except those subject to ITA 4(2) and ITA 4(3).
 Deducted by personal exemptions (non taxable income – PTKP) to get Taxable Income
 Tax payable = Tax Rates X Taxable Income
 All taxes withheld by other parties are totaled and used as Tax Credit
 All tax installments within a year are totaled and used as Tax Credit
 Tax Payable – Tax Credit = Tax Over/Under-paid according to ITA 28/29
 Income subject to ITA 4(2) and ITA 4(3) are reported separately in the Tax Return (SPT)
 List of Assets and Liabilities are also reported in the Tax Return (SPT) to the DGT
88
 INCOME
RECEIVED /
EARNED FROM
ONE EMPLOYER

9
 TAX RETURN (SPT) 1770 SS
This Tax Return is for Domestic Individual Taxpayer who receives income from one
employer (for less than 60 million rupiahs) and have no other income except bank
interest and or cooperative interest

• Basically the taxpayer’s tax obligation has been fulfilled by withholding / collection
performed by the employer and also by Bank (for interest) or Cooperatives.
• So the Tax Return will be a Nil Tax Return and is used to submit the record of Income
tax as well as the Taxpayer’s assets to DGT
• The Tax Return (SPT) attached with Form 1721 A1 – A2 as an evidence of withholding
tax performed by employer
• 1721 A1 - Withholding Tax Slip (Bukti Potong) for Permanent Employee
• 1721 A2 – Withholding Tax Slip (Bukti Potong) for Civil Servants

10
SPT 1770 SS

11
11
SPT 1770 SS

12
12
KODE HARTA

13
13
 ILLUSTRATION

• Andi TK(0) works as a civil servant of the Ministry of ABC with an annual
income of Rp59.400.000, the allowable deductions are Rp3.570.000 and ITA
21 that has been withheld is 91.500
• Andi received honorarium of Rp20.000.000 and subject to ITA 4(2) for Rp
1.000.000
• Income from Interest of Deposit for Rp5.000.000 subject to ITA 4(2) of
Rp1.000.000, Interest from ORI Rp4.000.000 subject to ITA 4(2) of
Rp400.000 Investment income from dividend of Rp8.000.000, invested in
Indonesia (in the form of deposits)
• Assets owned: Land=Rp300.000.000; House=Rp600.000.000, Bank deposits
= Rp100.000.000, Bonds (ORI) Rp200.000.000, Car Rp 230.000.000 and
electronic appliances of Rp70.000.000
• Prepare Andi’s Income Tax Return (SPT for Andi’s income tax)

14
14
 INCOME
RECEIVED /
EARNED FROM
MORE THAN ONE
EMPLOYER

15
 Tax Return (SPT) 1770 S
Receive income from one (more than 60 million rupiahs) or more
employers, other income and final income

• Income reported is the total of:

• Income from work
• Income from passive income
• Income subject to Final tax is reported in a separate table and is not added to
non-final income
• Withholding tax slip (tax receipt) from employment (permanent or non-
permanent) is used as tax credit.
• Income Tax Return in must be submitted before end of March the following
year, any underpaid taxes must be paid before the Tax Return is reported
16
SPT 1770 S

17
17
SPT 1770 S

18
18
SPT 1770 S

19
19
SPT 1770 S

20
20
 SPT 1770 S

• Can be added if more than 5

• Create attachments so they can be verified with the withholding tax receipt
• tax receipt can be in the form of A1, A2 and other withholding slips (bukti potong)

21
21
 SPT 1770 S

If each component is more than one it is better to make an attachment so that it

can be verified with the withholding tax receipts
22
22
 SPT 1770 S

Assets and Liabilities code should be in accordance with the Instruction 23

23
• Andi K(1) with TIN 14.236.979.4.413.000 is a civil servant of the
ILLUSTRATION
Ministry of ABC living at Jalan Cempaka 45, Cimanggis, Depok
• During 2021 received income from following sources of income:
• Income from the Ministry of ABC (NPWP
00,144,570,3,449,000) amounting to Rp368 million and taxes
withheld Rp45.25 Million
• Commissioner's income in SOE DEF (NPWP
06,347,254,5,075,000) amounted to Rp520 Million, tax
withheld Rp100 Million
• Non-final earnings from PT. ABC (NPWP
02,679,887.7,023,000) amounting to Rp10 Million, tax
withheld Rp250 thousand
• Non-final vehicle rental income from PT ABC (NPWP
04,685,937,7,025,004) amounting to Rp20 million, tax
withheld Rp400 thousand
• Final income from the Ministry of ABC (NPWP
00,144,570,3,449,000) amounting to Rp30 million, tax
withheld 4.5 million 24
24
INCOME FROM
BUSINESS
ACTIVITIES OR
INDEPENDENT
WORK

25
 Tax Return (SPT) 1770
Receive income from business or independent employment, conduct
bookkeeping or sales record-keeping, income from more than one employers,
other income and income subject to final income tax (SPT 1770)

• Income reported is the total of income from:

• Operating profit from business / activities
• Salaries from permanent employment
• Salaries from non-permanent employment
• Honorarium or compensation from other activities.
• Income subject to Final tax is reported in a separate table and is not added to non-final
income
• Withholding tax receipts from employments (permanent or non-permanent) or other
activities and tax instalments are used as tax credit.

26
 Elements
• Income subject to Final of Income
Income Tax regulations:
• Final of 0.5% for SMEs in accordance with the provisions
of PP 23 of 2018. On the gross circulation of the business
will be reported final tax in accordance with the provisions
and reported in the final tax column.
• Income is subject to other final taxes such as deposit
interest, bond interest, land or building leases, etc.
• Income is not a tax object e.g. dividends, inheritance, grants.
• Income from the tax-imposition business is not final:
• Income from the business can be calculated based on bookkeeping and then
a fiscal correction is made.
• Income from independent work or business can be calculated based on the
recording of sales net income is calculated from: sales multiplied by the
norm of calculation of net income (deemed profit)
• Other income for example from jobs that have been deducted PPh 21,
income from rent, royalty, other services that have been subject to PPh 23,
which is not part of the income from business activities. 27
27
 Bookkeeping (Pembukuan)
• Bookkeeping is a process of recording that is carried out regularly to collect financial data
and information which includes assets, liabilities, capital, income and expenses, as well as
the total cost or delivery of goods or services, which is closed by compiling financial statements
in the form of a balance sheet and profit and loss every year taxes are over
• Notes: Bookkeeping must be maintained in a manner or system commonly used in Indonesia,
for example based on Financial Accounting Standards, unless the tax laws stipulate otherwise.

• Taxpayers who are obliged to keep books of account:

• Personal taxpayers who carry out business activities or independent work
• Corporate taxpayers in Indonesia
• Personal taxpayers who carry out business activities or independent work in accordance with
the provisions of tax laws and regulations are allowed to calculate net income by using
the Net Income Deemed Profit Norm.
• Personal taxpayers who do not carry out business activities or independent work
• A person excluded from keeping books is obliged to keep record

28
28
 Recording (Pencatatan)
• Individual Taxpayer who is excluded from organizing bookkeeping must record its
gross income (Sales Turnover/ Peredaran Bruto)
Individual Taxpayer who conducts business activities or independent work in accordance with
the provisions of tax laws and regulations are allowed to calculate with net income by using the
Net Income Calculation Norm.
• With the PP no.23 of 2018, Individual Taxpayer with gross income of ≤ 4.8 billion is
given incentives in calculating the Income Tax owed. Income Tax based on ITA 23 is
the final tax that will be reported in the Individual Income Tax Return.

29
29
 Bookkeeping and Recording
Bookkeeping
Compulsory for:
 individual Taxpayers who run
business with gross income /
sales > Rp4,8 bilion
 Independent workers
 Entity Taxpayer (unless according
to PP 23/2018 chooses and
qualifies for the final imposition)
Net Income is calculated through
the Income Statement and then a
fiscal correction is made.
Sales Recording
Applies to:
Individual Taxpayer with gross income less than or equal to
4.8 billion/year, the calculation of income tax:
1) Net Income calculated using Deemed Profit Norm for
Calculating Taxable Income (PER-17/PJ/2015)  not
final
Net Income = Gross Income x % Deemed
Profit
2) Specific for individual entrepreneur of MSMEs; if met
the requirement, they may calculate Income Tax
according to PP 23/2018  income tax incentive: final
Income Tax Payable = Gross Sales x
0,5%
30
30
 Norma Perhitungan Penghasilan Netto (NPPN)/
Deemed Profit Norm for calculating Taxable Income
No. Jenis Usaha Menurut KLU Norma
1. Apotik 20 % 25. Jasa komunikasi, wartel, radio 12 %
2. Angkutan Jalan Raya 12,5 % 26. Jasa penjahit 35 %
3. Bengkel : elektro, motor, tak bermotor, jam & 17,5 % 27. Jasa salon 27 %
perhiasan, mesin kantor, alat olahraga 28. Jual beli emas 10 %
29. Notaris 63,5 %
4. Biro perjalanan 34 %
30. Onderdil (dagang) 8%
5. Dagang alat pertanian 8% 31. Pakan ternak (dagang) 8%
6. Dagang ATK 8% 32. Pedagang eceran bahan bangunan 8%
7. Dagang minyak goreng 5,5 %
8. Dagang perabot rumah tangga 8% 33. Pedagang eceran barang kelontong 8%
9. Dokter hewan 20 %
34. Pedagang eceran hasil bumi 5%
10. Dokter praktek 40 %
11. Honor (40% X 15%) 6% 35. Pedagang eceran meubel 8%
12. Hotel / penginapan 18 % 36. Pedagang obat-obatan 8%
13. Industri barang perhiasan, tukang emas 10 % 37. Pedagang pakaian jadi 8%
38. Pekerjaan bebas bidang medis 27 %
14. Industri Es 15 % 39. Penggilingan padi 8,5 %
15. Industri Meubel 12,5 % 40. Percetakan 12 %
16. Industri Semen 15,5 % 41. Peternakan 9%
17. Industri Tekstil / Pakaian Jadi 12,5 % 42. Rumah makan 18 %
18. Jasa binatu 42,5 % 43. Selepan padi, dsb (pengupasan hasil 8,5 %
19. Jasa foto copy 35,5 % pertanian)
20. Jasa foto studio 35 % 44. Service elektro 17,5 %
21. Jasa hiburan dan kebudayaan 31,5 % 45. Tambak 26 %
22. Jasa hukum, notaris 63,5 % 46. Tanah (jual) 5%
23. Jasa kebersihan 42,5 % 47. Tanah (sewa) 10 %
24. Jasa kesehatan 35 %

31
31
31
Special Provision – Small Business Owner –MSMEs -
2022
• Taxpayers who have a certain gross sales (less than or equal to <=
4.8 Billion a year) are not subject to Income Tax on the gross
circulation portion up to Rp500,000,000.00 (five hundred million
rupiah) in 1 (one) tax year.
 Sales below 500 million is not taxable
 If the sales is above 500 million then it is deducted first 500
million so that the rest is only taxed.
• There are no official rules yet.

32
32
32
 Ilustrasi Norma
• Individual Taxpayer Andi TK(0) has a gold store business with a sales
of 4,500 million in 2022. Andi chose to use the norm in calculating
net income. The norm for Andi’s business according to Ministry of
Finance Regulation is 10%..
Sales 4.500.000.000
Non Taxable Gross sales 500.000.000
Taxable Sales 4.000.000.000
Deemed Profit % 10%

Net Income 400.000.000

Non Taxable Income 54.000.000

Taxable Income 346.000.000

Tax Payable –normal tax rate Article 17 55.500.000

33
33
33
 SPT 1770

Net income:
1. Bookkeeping –
fiscal
reconciiation
(Bag A)
2. Record keeping
– calculation
norms (Bag B)

34
34
SPT 1770

35
35
SPT 1770

36
36
 SPT 1770

 Use the numbers in the audited financial statements (if audited) and make sure the numbers
match.
 Net income is equal to pre-tax earnings.
 The differences in accounting and tax will be explained in the existing fiscal reconciliation
described in the next column both positive fiscal reconciliation (adding to taxable income) and
negative fiscal reconciliation.

37
37
 SPT 1770
Penghasilan Neto dari Pembukuan

 The entire difference

between pre-tax
earnings and taxable
income must be
explained from
components 2 and 3.
 Such
differences/adjustments
should also be disclosed
in the entity’s FS but are
based on the type of
permanent and
temporary correction.

38
38
 SPT 1770
Penghasilan Neto dari Pencatatan

 Calculated from the value of business circulation obtained from the company's recording
process
 Norms are based on KEP 536/PJ/2000 on Calculation Norms for Calculating Net Income.
 WP must make a letter to the Head of KPP explaining the list of codes and Classification of
Business Fields (KLU) used, this form is submitted separately from reporting SPT.
39
39
SPT 1770

40
40
SPT 1770

41
41
SPT 1770

42
42
SPT 1770

43
SPT 1770

44
44
 SPT 1770

 The calculation of husband and

wife who agree to split the
property or want to perform
their own tax obligations, the
taxes will be calculated in
combination first, and then
propagated based on their
respective net income.
 This method makes each family
member will be charged layering
tariffs once.

45
45
SPT 1770

46
46
 SPT 1770

 People who own retail merchant

businesses and do not do bookkeeping
can choose to calculate income from
retail trading based on deemed profit
percentage (norm)
 Retail traders make installments of ITA
25 of 0.75% of gross circulation per
month and will be taken into account
as tax credits.
 If using the final tax provision of 0.5%
then this provision does not apply.

47
47
 SPT 1770

 The incomes subject to final tax

regulations are reported on the
separate attachment
 The imposition of a final tax of
0.5% of turnover for WP OP PT
UMKM (gross circulation < =
4.8m) in accordance with PP No.
23/2018.
 The provisions have a term limit
for Individual taxpayer of 7 years

48
48
 FISCAL
RECONCILIATION

49
 Tax vs Accounting
INCOME TAX
IFRS / PSAK
LAW

ACCOUNTING TAXABLE
INCOME INCOME
Fiscal
DIFFERENCE Reconciliation

PERMANENT TEMPORARY

Deferred Tax: PSAK 46

Research:  Asset / Liability Income Tax
Book tax Gap  Expense/Revenue
Eff Tax Rate

50
 Fiscal Reconciliation / Fiscal Correction
Taxable Income

* Pre-tax profit figures as preliminary figures

* Deducted by non-tax object and income subject to final tax
* Correction of expenses/income that according to taxes is different compared to
accounting.
Fiscal Correction

SPT describes the group of components that must be corrected based on positive
and negative corrections
* Items corrected to be part of the top notes of financial statements, separated by
temporary and permanent corrections

Profit Before Tax

51
51
 Type of Corrections
Negative
• Reduce taxable income.
• The taxes paid will be smaller.
• It can occur due to temporary and permanent differences.
Negative • The impact of this correction makes the effective tax rate will be
smaller than the tax rate in accordance with regulatory provisions.

CORRECTIONS
Positive
•
•
Increase taxable income. Positive
The taxes paid will be higher.
• It can occur due to temporary and permanent differences.
• The impact of this correction makes the effective tax rate will be
greater than the tax rate in accordance with regulatory provisions.

52
52
 Type of Differences

Permanent Temporary

Corrections that occur due to differences in accounting
and tax substance
Examples: 1) income is subject to final tax, 2) expenses
unrelated to obtaining, obtaining and maintaining
income, 3) donations, inheritances and grants
Correction occurs due to differences in revenue
recognition time and expense
Examples: 1) depreciation and amortization because
there are special provisions of taxation; 2) recognition of
income when cash is received 3) loading when it occurs
not by estimate; warranty, decrease in value

Not recognized as a deferred tax Recognized as a deferred tax

Affect effective tax rates Affect effective tax rates

53
53
 Permanent Different Identification:
Identifying Non Taxable Income (ITA 4(3))

1. Mandatory religious assistance or donations

2. Grants received by families, religious bodies, education, social.
3. Inheritance.
4. Assets as a substitute for equity participation.
5. Natura (Benefit in kinds).
6. Insurance claims accepted by WP OP.
7. Dividends from retained earnings on ownership> 25%.
8. Contribution received by the Pension Fund.
9. Investment income by the Pension Fund.
10. Share of profit received by members of the partnership.
11. Share of profits received by venture capital companies.
12. Scholarship.
13. The rest is reinvested by non-profit education / R&D agencies.
14. Assistance paid by BPJS

54
54
 Permanent Different Identification:
Identifying Income subject to Final Income Tax (ITA 4(2))
Deposit interest, Interest on
savings, bonds and cooperative savings Lottery prize;
government bonds. received by WP OP.

Income from
Income from
transactions in shares, Transfer of land and /
construction and real
securities and other or building income
estate services
equity investments.

Land and / or building Other certain income

rental income. is regulated by PP.

55
 Permanent Different Identification:
Identifying Non Deductible Expenses – Article 6 and 9
The expense of business activities is the burden associated with earning, collecting and
maintaining (3M) income. Focus on a burden that can't be a reduction.

1. Expenses unrelated to 3M e.g., recreational expenses, expenses for personal

interests/corporate stewards, entertainment costs unrelated to marketing activities and
no nominative list.
2. An amount that exceeds the reasonableness (normal-fair) received by shareholders for
the services rendered. –arm’s length transaction basis
3. Donations except in accordance with the provisions of taxation: assistance of social
activities
4. Reserves except those permitted by tax: reserves decreased in inventory value,
allowance of receivables (except certain industries and in accordance with tax
provisions).

56
Identification of Different Treatment for Certain Expenses

The following expenses or income are allowed but the time of recognition is
different so that the burden / income according to taxes is different from
according to accounting.
• Income that has been received in return but the goods / services have not
been given taxes applying the concept of income has been received.
• Expenses estimated according to accounting while in tax recognition such
as warranty expense, pension expense.
• Depreciation expense, calculated depreciation expense according to taxes
and accounting, the difference is corrected.
• Profits and losses of sales or elimination of assets must be calculated
according to the provisions of taxation, the difference must be corrected.

57
57
 Loss Compensation (Loss Carryforward)
Pasal 6 Ayat (2)

Losses can be compensated by income starting the following tax year,

consecutively up to 5 years.

On investments in certain fields of business or in certain areas,

compensation for losses can be provided up to a maximum of 10
years.
• Compensation losses are calculated from fiscal profit (taxable
income).
• Compensation benefits of only 5 years, more than that time period
can no longer be utilized
• This compensation will accountingly give rise to Deferred Tax
Assets and Benefits (Income) of Deferred Taxes, which is a
number of potential compensation that can be utilized by the
58
58
 Illustration

CV.
CV.Sumbing
Sumbingcompany
companyestablished
establishedinin2016.
2016.AtAtthe
thebeginning
beginningof ofthe
theoperation
operationitit
faced
facedthetheups
upsandanddowns
downsofofthe
thebusiness.
business.Here's
Here'sthe
thefiscal
fiscalprofit
profitand
andloss
losssince
sinceitit
was
wasfirst
firstestablished.
established.
Year
Year Profit/Loss
Profit/Loss Amount
Amount
2016
2016 Loss
Loss Rp
Rp1.750.000.000,00
1.750.000.000,00
2017
2017 Loss
Loss Rp
Rp 825.000.000,00
825.000.000,00
2018
2018 Profit
Profit Rp
Rp 215.000.000,00
215.000.000,00
2019
2019 Loss
Loss Rp
Rp 65.000.000,00
65.000.000,00
2020
2020 Profit
Profit Rp
Rp 765.000.000,00
765.000.000,00
2021
2021 Loss
Loss Rp
Rp 12.500.000,00
12.500.000,00
IfIfthe
thecompany
companyearnsearnsaaprofit
profitof
ofRp
Rp1,975,000,000.00
1,975,000,000.00inin2022,
2022,what
whatisisCV
CVTaxable
Taxable
Income.
Income.Cleft
Cleftinin2022?
2022?
??

59
59
 Illustration

Answer
Answer : :
Loss
Losscompensated
compensatedinin 2018
2018 ==215.000.000,00
215.000.000,00(From
(FromLosses
Lossesinin2016)
2016)
Loss
Losscompensated
compensatedinin2020
2020 ==765.000.000,00
765.000.000,00(From
(FromLosses
Lossesinin2016)
2016)
Loss
Losscompensated
compensatedinin2022
2022 ==From
FromLosses
Lossesinin2017
2017++Losses
Lossesin2019
in2019++Losses
Lossesinin2021
2021
==825.000.000
825.000.000 ++65.000.000
65.000.000 ++12.500.000
12.500.000
==Rp
Rp902.500.000,00
902.500.000,00
As
As for
for losses
losses inin 2016
2016 that
that has
has not
not been
been compensated
compensated yet,
yet, for
for Rp
Rp 770.000.000,00
770.000.000,00
(1.750.000.000
(1.750.000.000--215.000.000
215.000.000--765.000.000),
765.000.000),cannot
cannotbe
becompensated
compensatedinin 2022,
2022,asasitithas
has
passed
passed55years.
years.
Taxable
TaxableIncome
Incomeinin 2022
2022 ==1.975.000.000
1.975.000.000--902.500.000
902.500.000
==Rp
Rp1.072.500.000,00
1.072.500.000,00
902.500.000
902.500.000==825.000.000
825.000.000 ++65.000.000
65.000.000++12.500.000
12.500.000

60
60
 Ilustration

Ali – an entrepreneur in 2020 suffered losses for 500M. During 2021 to 2026 the profit and losses data are as follows:

Tahun Laba (rugi)

In 2026: Taxable Income =0
2021 100 Loss Compensation
2022 (400) 2020 – 200M expired
2022 – 400 used in 2026
2023 (200)

2024 200 In 2027: Taxable Income 200M,

2025 (100) 500 minus Losses in 2023 and 2025
2026 400

2027 500

61
61
 ILUSTRATION LOSS CARRIED FORWARD

Loss carryfwd 2020 2021 2022 2023 2024 2025 2026 2027
-500 100 -400 -200 200 -100 400 500
2020 -100 -200 loss 2020 expired
2022 -400
2023 -200
2025 -100
PKP/Taxable Income -500 0 -400 -200 0 -100 0 200

62
62
 Spousal Combined Income
Indonesian Income Tax concept: Family is an economic unity. Income or loss of all
family members combined as a single entity that is taxed and the fulfillment of its
tax obligations is carried out by the head of the family. (Article 8 of the Income Tax
Law)

Combined income method does not apply if the income is not an object of tax; or
income that has been subject to final Income tax

The wife's income does not need to be combined with the husband's income
(special treatment – as if FINAL – TAXED INCOME), in the case of:
- the wife's income is obtained solely from one employer, and
- The wife's income comes from work that has nothing to do with the business or
free work of the husband or other family members.

63
63
 Separation of Tax Obligation in a Family
Pasal 8 Ayat (2), dan (3)

Husband and Wife are Taxable Income and Income

divorced Tax are calculated separately

Husband and Wife

made a pre-nuptial
agreement
Taxable Income and Income
Tax are calculated collectively
(combined)  each person’s
Husband and Wife
tax obligation is calculated
agreed to do their own
based on their income
tax obligation
proportion
separately
64
64
64
 Marital Status for Income Tax Calculation
• KK (Kepala Keluarga / Head of Family)  Husband and Wife in a family conduct their tax obligation
together as a single economic unit (one TIN). If the wife works for one employer (not related to her
husband business), wife’s income will be treated as income subject to Final Tax. But, if the wife
receive income from more than 1 employers , the income tax calculation is based on total income
received by husband and wife, reported by husband only.
• MT (Memilih Terpisah / Choose to do Tax Obligation Separately)  Husband and Wife have their
own TIN and choose to keep their own TIN and conduct their Tax Obligation separately  The
income tax calculation : combined all income and calculate the income tax payable combined  Tax
Payable for each Husband and Wife is calculated based on the proportion of their gross income.
Husband and Wife submit their own Tax Return based on their proportionate income and assets.
• PH (Pisah Harta / Asset Segregation Agreement)  Husband and Wife have a pre-nuptial agreement
on asset segregation so that their tax obligation are also done separately. Tax calculation and
obligation settlement is the same with MT.
• HB (Hidup Berpisah / Divorced)  Widow / Widower conduct his/her tax obligation as single
individual (TK – tidak kawin / Not married).

65
 Ilustrasi
Penghasilan Suami – Istri
Income – Husband and Wife
Permadi
Permadi isis aa notary
notary who
who has has his
his own
own office
office with
with net
net income
income inin 2019
2019 ofof Rp
Rp
135,000,000.00.
135,000,000.00. Permadi's
Permadi's wifewife isis aa secretary
secretary whowho works
works inin Permadi's
Permadi's
office.
office. On
On the
the basis
basis of
of professionalism,
professionalism, Permadi
Permadi treated
treated his
his wife
wife like
like any
any
other
other employee
employee with
with aa salary
salary of
of Rp
Rp 9,000,000.00
9,000,000.00 per per month.
month. Permadi
Permadi and
and
his
his wife
wife have
have two
two children
children andand live
live with
with Permadi’s
Permadi’s father
father and
and mother
mother (both
(both
retired
retired civil
civil servants)
servants) inin Permadi’s
Permadi’s House.
House. Required:
Required:
a.a. How
How muchmuch isis the
the income
income taxtax should
should Permadi
Permadi and
and his
his wife
wife pay
pay in
in
2019?
2019?
b.
b. What
What ifif then
then in in 2019
2019 Permadi
Permadi and and hishis wife
wife live
live separately
separately //
divorced?
divorced?
c.c. What
What ifif Permadi
Permadi and and his
his wife
wife are
are still
still together
together but
but his
his wife
wife wants
wants toto
do
do her
her tax
tax obligations
obligations separately?
separately? 66
66
66
 Ilustration Income: Husband and Wife
Jawaban
Jawaban ::
a.a. IT
ITCalculation
Calculationisisdone
doneby
bycombining
combiningPermadi
Permadiand
andWife’s
Wife’sIncome
Income
Net income of Husband 135,000,000
Net income of wife 108,000,000
Combine net income (wife's income combined) 243,000,000
Non Taxable Income (K/I/2)
Taxpaer -54,000,000
M arried status -4,500,000
2 dependants -9,000,000
Combined W ife's Income -54,000,000 -121,500,000
Taxable Income 121,500,000
Income Tax Payable in a year
5% x 50,000,000 2,500,000
15% x 10,725,000 Rp13,225,000
Permadi's
Permadi's wife's
wife's income
income isis not
not final
final and
and the
the withholding
withholding of
of her
her PPh
PPh 21
21
can
canbe
becredited
creditedin
inthe
theyear-end
year-endtaxtaxreturn
returncalculation.
calculation.
67
67
67
 Ilustrasi Penghasilan Suami – Istri
Answer:
Answer:
b.b. Income
Income tax
tax calculation
calculation isis done
done separately
separately between
between Permadi
Permadi and
and his
his
wife
wife(suppose
(supposeititisisassumed
assumedthat
thatthe
thechildren
childrenlive
livewith
withPermadi).
Permadi).
Net income of Husband 135,000,000
Non Taxable Income (TK/2)
Taxpayer -54,000,000
2 dependants -9,000,000 -63,000,000
Taxable Income 72,000,000
Tax Payable in a year -husband
5% x 50,000,000 2,500,000
15% x 3,300,000 Rp5,800,000

Net income of W ife 108,000,000

Non Taxable Income (TK/0)
Taxpayer -54,000,000 -54,000,000
Taxable income 54,000,000
Tax Payable in a year -wife
5% x 50,000,000 2,500,000
15% x 6,000,000 600,000 Rp3,100,000

68
68
68
c. The Income Tax calculation is based on combined income, but
then propagated based on net income proportion:

Permadi:
= ______135.000.000 _______ x 13.225.000
135.000.000+108.000000
= 7,347,222

Wife:
=_______108.000.000 ____ x 13.225.000
135.000.000+108.000000
= 5,877,778

69
69
 Children’s Income Tax
Art 8 par (4)
Income received or earned by immature children is combined with
the income of their parents.

The incorporation mechanism is generally accepted regardless of

which source of income the child is.

Age restrictions and conditions for immature children are children

who are not yet 18 years old and have never been married.

70
70
70
 GOVERNMENT
REGULATION NO
23 / 2018

71
 Government Regulation No 23 / 2018
• Government Regulation (PP) Number 23 of 2018, Income Tax on Income from
Businesses Received or Obtained by Taxpayers Who Have Certain Gross Circulation
replaces Government Regulation (PP) Number 46 of 2013.
• Certain gross circulation is income from businesses received or obtained by
taxpayers with gross circulation (turnover) that does not exceed Rp4.8 billion in 1
tax year. Gross circulation (turnover) is the amount of gross circulation (turnover)
of all outlets / counter / outlets or the like both central and branch.
• Taxes owed and to be paid are final taxes.
• Effective July 1, 2018
• Difference in terms
• The imposition of the final tax rate changed from 1% to 0.5%.
• Improvement of other provisions
• The final 0.5% imposition is optional

72
 TAX RATE
• The government sets the Final Income Tax rate to 0.5%, optional
• Taxpayers can choose to follow the rate with a final scheme of 0.5%, or use the normal
scheme which refers to article 17 of Law No. 36 of 2008 on Income Tax.
• This optional nature benefits taxpayers because:
• For Individual Taxpayer and entities that have not been able to organize bookkeeping in
an orderly manner, the implementation of the Final Income Tax of 0.5% provides
convenience for them to carry out tax obligations.
• The tax calculation becomes simple, which is 0.5% of gross circulation / turnover. .
• The implementation of final Income tax has consequences, that is Taxpayer still has to
pay taxes even in a state of loss.
• WP bodies that have done bookkeeping well can choose to be subject to Income Tax
based on article 17 of Law No. 36. Consequently, the calculation of the Income Tax rate
will refer to the taxable income layer. Taxpayer is also free from Income tax if it suffers a
fiscal loss.

73
73
 TIME LIMITATION

• The imposition of a Final Tax rate of 0.5% has a time limit

(grace period).
• The time limit given by the government for WP who
wants to take advantage of the Final Tax rate of 0.5% is:
• 7 years of taxes for private WP.
• 4 tax years for WP cooperative body, CV, or firm.
• 3 tax years for WP entities in the form of PT.
• After the deadline expires, WP will return to using the
normal scheme as stipulated by article 17 of Law No.36.
This is intended to encourage taxpayers to organize
bookkeeping and business development..

74
 TAXPAYERS CRITERIA WHO ARE ENTITLED

• WP Subject to Final Income Tax if they Earns Below Rp 4.8 Billion a year
• The threshold of taxpayer income subject to final PPh worth Rp 4.8 billion.
• The value limit explicitly targets Micro Small and Medium Enterprises (MSMEs) as
tax targets.
• Who can take advantage of the Final Income Tax of 0.5%?
• Taxpayers who have a certain gross sales subject to a Final Income Tax of 0.5% are:
• Individual Taxpayers
• Entity Taxpayers of cooperatives, CVs, firms, or Limited Liability Company
(PT) that receive or earn income with gross circulation below Rp 4.8 billion.

75
75
TAXPAYERS WHO ARE NOT ENTITLED

• Unable to Take Advantage of Final IT of 0.5%

• Individual Taxpayer with income earned from services in
connection with free employment. This includes fellowships
or firms consisting of wp similarly skilled individuals such as
law firms, accounting firms and so on.
• Taxpayers with income earned abroad whose taxes are
owed or have been paid abroad.
• Taxpayers whose income has been subject to a final IT with
the provisions of their own tax laws and regulations.
• Taxpayers with income excluded as tax objects.

76
 The Use of Normal Rates Option

• If Taxpayers who entitled to use PP 23 choose to use normal

scheme rates, taxpayers need to apply
• Apply to the Directorate General of Taxes, then The
taxpayers will get confirmation as a taxpayer subject to
IT which refers to article 17 of Law No. 36 of 2008 on
Income Tax
• However, taxpayers who have already chosen to be
subject to Income Tax under the normal scheme cannot
choose to be subject to a Final Tax of 0.5% later.

77
77
ILLUSTRATIONS

78
ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION

During 2022, Mr. Heru received income from his trading business – (he managed this business with his
wife, Mrs. Hana who also work as a non-permanent lecturer)
Mr. Heru, besides having a business, is also a commissioner in a Company and is often asked to be
a trainer or speaker because he has published a book that is a best seller in the financial sector.

The following is information on Mr. Heru's business results and income during 2022. Information on Mr.
Heru's dependents as of December 31, 2022:
1. Mrs. Hana (wife)
2. Herman (son) Highschool student
3. Hamida (daughter) works in PT. Mawar
4. Mr. Hakim (Father in Law) pensioner (receiving pension fund monthly)
5. Hendra (foster child) University student

79
ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION
The following is information on Mr. Heru's income for 2022
a. Income from the business of procurement of goods and services as shown in the
following table (in rupiah)

Income 60.000.000.000
Cost of Good Sold 40.000.000.000
Gross Income 20.000.000.000
Expenses
Administrative and Marketing Expenses 10.000.000.000
Other Expenses 3.900.000.000
Total Expenses 13.900.000.000
Net Income 6.100.000.000

80
ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION
Additional information related to the business:
1) Included in the administrative and marketing costs are the following costs :
a. Depreciation Expenses of IDR 200,000,000. According to the fiscal law, the
depreciation value is IDR 300,000,000
b. Maintenance costs for 2 private vehicles IDR 200,000,000. The car was used by Mr.
Heru and Bu Hana for office and daily activities.
c. The cost of water, electricity and internet for Mr. Heru's family is IDR 40,000,000.
The cost of pulses for Mr. Heru and Mrs. Hana, which is used for business and
family purposes, is IDR 20,000,000
d. Transportation costs for family recreation are IDR 200,000,000 for employee family
recreation IDR 300,000,000 for employee recreation
e. The entertainment expenses for customers of IDR 100,000,000 is not on a
nominative list

81
ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION
2) Included in other costs are the following costs:
a. Contribution of political parties in the context of the General Election of Rp.
200,000,000.
b. Education donation IDR 100,000,000
c. Assistance for the construction of public roads Rp 100,000,000
d. Infrastructure development due to the national disaster Rp 100,000,000,
e. Social activity assistance of IDR 240,000,000
f. Land and building tax IDR 20,000,000 for Mr. Heru's private house.

82
 ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION

Mr. Heru's other income is:

• The profit from selling the land is Rp. 2,400,000,000. The land for sale is worth 4,000,000,000,
at the cost of buying it for Rp.1,600,000,000 5% tax is deducted from the sale of this land.
This income is irregular income.
• Mr. Heru's honorarium as a trainer is 400,000,000, with a tax of IDR 10,000,000.
The trainer's income of Rp. 300 million is irregular income because there is a special project from
the Ministry of Industry.
• Mrs. Hana's honorarium as a non-permanent lecturer is 100 million per year.
The tax that has been withheld according to Withholding Tax receipt Form A1 is IDR 2,300,000.
• Income as an Independent Commissioner at PT. Pelangi with a monthly salary of 50 million
and a one-month THR which has been deducted by taxes of 140,000,000
• Income from royalties from Mr. Heru's book amounting to Rp 200,000,000 is deducted by 15% ITA 23.
• The interest on deposit received is IDR 20,000,000 with a 20% tax deducted by the bank.

83
 ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION
• Tax on Mr. Heru's family income has been deducted by other parties as informed in the question.
• A recognized zakat payment to LAZ is IDR 100,000,000.
• Mr. Heru paid ITA 21 on the salary paid to employees of 200 million.
• For income in a year, there is ITA 22 which has been deducted by another party amounting to
Rp.400,000,000. Income has been recorded at the amount of gross income and prepaid tax is recorded
• Mr. Heru installs ITA 25 every month. During 2022, the amount of tax installments that have
been paid is IDR 1,500,000,000.

Requested:
a. Prepare a fiscal reconciliation on Mr. Heru's income from his business in 2022.
b. Calculate Mr. Heru's total taxable income in 2022?
c. Calculate all tax credits for calculating Mr. Heru’s Income Tax in 2022!
d. Calculate the tax under or overpayment for Mr. Heru in 2022!

84
ILUSTRATION: INDIVIDUAL TAXPAYER CALCULATION
Fiscal Reconciliation / Correction
Income
Total Income before Income Tax 6.100.000.000
Negative Correction
Depreciation 100.000.000
Positive Correction 100.000.000
Vehicle Maintenance Expense 100.000.000
Pulses Expense 10.000.000
Utilities Expenses (water, electricity,
internet) 60.000.000
Family outing expenses 200.000.000
Employee outing expenses 300.000.000
Entertainment Expenses 100.000.000
Political Party Donation 200.000.000
Social Activity Expenses 240.000.000
Land and Building Tax – Private home 20.000.000
1.230.000.000
Income after Fiscal Correction 7.230.000.000

85
 Income after Fiscal Correction 7.230.000.000
ILUSTRATION: Other Income:
Honorarium (Trainer) 400.000.000
INDIVIDUAL Royalty 200.000.000
TAXPAYER Lecturer salary 100.000.000
Commissioner’s income 650.000.000
CALCULATION Total Other Income 1.350.000.000
Zakat paid 100.000.000
Total Net Income 8.480.000.000
Non Taxable Income 117.000.000
Taxable Income 8.363.000.000

86
Taxable Income 8,363,000,000
Tax Payable
5% 60,000,000 3,000,000
15% 190,000,000 28,500,000
25% 250,000,000 62,500,000
30% 4,500,000,000 1,350,000,000
35% 3,363,000,000 1,177,050,000
2,621,050,000
Tax Credit
PPh/ITA 21 10,000,000
2,300,000
140,000,000
PPh/ITA 22 400,000,000
PPh/ITA 23 30,000,000
PPh/ITA 25 1,500,000,000
2,082,300,000
PPh/ITA 29 (Kurang Bayar/Underpaid) 538,750,000

87
Slide: Dwi Martani – dan Tim Perpajakan FEB UI

88
88