The Ministry of Finance has released a new regulation to simplify the procedures for the registration, reporting, and data collection of land and building tax (Pajak Bumi dan Bangunan/PBB) objects in the plantation, forestry, mining, and other sectors (Perkebunan, Perhutanan, Pertambangan, dan Sektor Lainnya/P3L).
The simplification of registration and reporting procedures is outlined in the Minister of Finance Regulation No. 48/PMK.03/2021 concerning Procedures for the Registration, Reporting, and Data Collection of Land and Building Tax Objects (MoF Reg. 48/2021). This regulation has been released to promote the ease of doing business in Indonesia.
Promulgated on 17 May 2021, MoF Reg. 48/2021 takes effect 60 days thereafter. The enactment of MoF Reg. 48/2021 simultaneously revokes the Minister of Finance Regulation No. 254/PMK.03/2014 concerning Procedures for the Registration and Data Collection of Tax Objects and Tax Subjects or Taxpayers of Land and Building Tax (MoF Reg. 254/2014).
This regulation comprises six chapters and 29 articles. The stipulated scope includes registration of tax objects, reporting of registered tax objects, data collection of registered tax objects, and transitional provisions.
In terms of the registration of tax objects, this regulation requires every taxpayer to register at the Directorate General of Taxes (Direktorat Jenderal Pajak/DJP) through the Tax Office (Kantor Pelayanan Pajak/KPP) to be given a Land and Building Tax Certificate of Registration (Surat Keterangan Terdaftar PBB/SKT PBB).
SKT PBB refers to a certificate issued by the Head of KPP as notification that the tax object and taxpayer have been registered in the DGT’s tax administration system. SKT PBB constitutes a new administrative tool that was not available in the previous provisions.
Registration to obtain SKT PBB shall be carried out no later than one month after the fulfillment of the subjective requirements as per PBB-related statutory provisions. There are 6 types of subjective requirement fulfillment as indicated in Table 1.
Table 1 The Fulfillment of Subjective Requirements of PBB P3L
Source: MoF Reg. 48/2021.
KPP, as the place of registration, covers the following four scopes of KPP: (i) Small Tax Offices whose working area includes the location of the tax object; (ii) Small Tax Offices whose working area includes the taxpayer’s residence or domicile; (iii) Oil and Gas KPP; and (iv) KPP stipulated by the Director General of Taxes. Each scope of this KPP depends on the type of PBB tax objects and administers PBB under its responsibility.
Registration to obtain SKT PBB may be performed by applying electronically or in writing. Electronic registration applications can be made through the DGT’s website or other channels as stipulated by the Director General of Taxes. A written application for registration, on the other hand, can be submitted in person, by post with proof of postage, or through a forwarding company or courier service with proof of postage.
The application for registration shall be attached with taxpayer documents in the form of an ID card and Taxpayer Identification Number (Nomor Pokok Wajib Pajak/NPWP) for individuals. For corporates, on the other hand, the application must be attached with taxpayer documents in the form of a deed of establishment and/or amendments thereof as well as an identity card and NPWP of one of the management. On another note, the application must be attached with 5 types of tax object documents as listed in Table 2.
Table 2 Document Attachments of SKT PBB Registration
Source: MoF Reg. 48/2021.
Based on the registration application submitted by the taxpayer, the Head of the Tax Office conducts administrative research. Based on the administrative research, the Head of KPP issues a decision no later than 10 working days after the application is received in full.
The decision may take the form of accepting the application by issuing SKT PBB or rejecting the application by issuing a letter of rejection of the application for tax object registration. In the event that the Head of KPP does not issue a decision within 10 working days, the application is deemed granted and the Head of KPP shall issue SKT PBB no later than one working day after the period for issuing the decision ends.
If the taxpayer fails to register, the Head of the KPP is authorized to perform audits or administrative research and issue SKT PBB ex officio. SKT PBB, issued ex officio, is sent to the taxpayer no later than three working days from the issuance date of SKT PBB.
The head of KPP, based on the taxpayer’s application or his ex officio authority, may change the data contained in SKT PBB and revoke SKT PBB. For tax objects that no longer meet the subjective requirements as per PBB-related statutory provisions, SKT PBB may be revoked.
In addition to the subjective requirements, SKT PBB may be revoked if the taxpayer does not have PBB tax liability, is under PBB-related law enforcement measures, is currently filing legal remedies in the field of PBB taxation, and/or is in the process of completing a case review in the PBB taxation sector.
Tax objects and taxpayers that have been administrated in the DGT’s administration system prior to the enactment of MoF Reg. 48/2021 are not required to register. DGT, through the Tax Office where the tax object is registered, shall issue SKT PBB ex officio through administrative research.
In addition to registering to obtain SKT PBB, taxpayers must report registered tax objects using Notification of Tax Objects (Surat Pemberitahuan Objek Pajak/SPOP) submitted by the DGT. The registered tax objects are reported in each tax year. The submission date of SOP by the DGT is the date SPOP is received by the taxpayer and covers:
1 February in the tax year PBB becomes payable, for the tax objects of PBB for the plantation sector, the oil and gas mining sector, and the mining for geothermal exploitation sector;
31 March in the tax year PBB becomes payable, for the tax objects of PBB for the forestry sector, mineral or coal mining sector, and other sectors; or
the date of the tax object is registered as stated in SKT PBB, in the event that SKT PBB is issued for the tax object registration after 1 February in the tax year PBB becomes payable or after 31 March 31 in the tax year PBB becomes payable, and the condition when PBB becomes payable is met according to the condition of the tax object on 1 January in the tax year PBB becomes payable.
SPOP, the media for reporting tax objects, is an electronic SPOP submitted through the DGT’s website or certain channels as stipulated by the Director General of Taxes. However, in the event of interference to these certain channels and/or force majeure, the DGT through the Tax Office where the tax object and/or the taxpayer is registered will not submit SPOP electronically.
SPOP, either submitted electronically or not, must be filled in clearly, correctly, and completely and signed by the taxpayer or taxpayer’s proxy. The clearly, correctly, and completely filled SPOP is submitted to the DGT through the Tax Office where the tax object is registered no later than 30 days after the date SPOP is received. In the event that the 30 day period is not fulfilled, the taxpayer may submit a notification letter of the postponement of SOP submission to the KPP where the tax object is registered.
MoF Reg. 48/2021 also outlines the procedures for data collection of registered tax objects. Data is collected by data collection officers using two types of data collection methods, i.e. office data collection and/or field data collection. Office data collection is carried out by processing tax object data reported by taxpayers through SPOP and/or processing data and information in the DGT’s information system. Field data collection, on the other hand, is carried out by inspecting the physical location of the tax object and/or other locations other than the physical location of the tax object, on the tax object data that should be reported in SPOP.