The tax authorities adjust the place of registration for taxpayers and business reporting for certain Taxable Persons for VAT Purposes (Pengusaha Kena Pajak/PKP) in several Tax Offices (Kantor Pelayanan Pajak/KPP). The adjustments of the places of registration and reporting are outlined in the Director General of Taxes Regulation No. PER-05/PJ/2021 concerning Amendments to the Director General of Taxes Regulation No. PER-07/PJ/2020 concerning the Places of Registration for Taxpayers and Business Players through Electronic Systems and/or Places of Business Reporting for Taxable Persons for VAT Purposes at Tax Offices in the Regional Large Tax Office, Jakarta Special Regional Tax Office, and Medium Tax Offices (PER-05/2021).
Coming into force as of 16 March 2021, this regulation has been released in connection with changes in the working areas at several Tax Offices. The changes to the working areas of several Tax Offices were previously stipulated in the Minister of Finance Regulation No. 184/PMK.01/2020 concerning Amendments to the Minister of Finance Regulation No. 210/PMK.01/2017 concerning the Organization and Work Procedures of Vertical Agencies of the Directorate General of Taxes (MoF Reg. 184/2020).
PER-05/2021 is also intended to provide legal certainty, ease of administration, and increase supervision in the exercise of rights and fulfillment of tax obligations for certain taxpayers and/or Taxable Persons for VAT Purposes (Pengusaha Kena Pajak/PKP).
Through PER-05/2021, the authorities amend the provisions under Article 5 and Article 6 of PER-07/2020. Article 5, in essence, outlines the implementation of rights and fulfillment of Value Added Tax (VAT) or VAT and Sales Tax on Luxury Goods (STLGs) for central and branch taxpayers registered at Tax Offices within the Regional Large Tax Office and Jakarta Special Regional Tax Office, as well as Medium Tax Offices (KPP BKM).
The provisions include the designated tax offices to meet reporting obligations if a taxpayer with a central Taxpayer Identification Number (Nomor Pokok Wajib Pajak/NPWP) is registered at a Small Tax Office, whereas a branch NPWP that has been confirmed as a PKP is registered at a Medium Tax Office.
Next, Article 6 outlines the provisions on the exercise of rights and/or fulfillment of the obligation to withhold and collect income tax. The scope of said obligation includes Article 21/26, Article 4 paragraph (2), Article 23/26, Article 15, and Article 22 Income Tax.
The provisions described in Article 6, in essence, concern the implementation of rights and/or fulfillment of income obligations for the central and branch taxpayers that are registered at KPP BKM and domiciled in the areas listed in Appendix B of PER-05/2021, or those that only fulfill one of these criteria.
Moreover, through PER-05/2021, the authorities also add Article 20A. This additional article stipulates the use of Periodic Article 21/26 Income Tax Returns reporting application to report the fulfillment of the obligation of Article 21/26 Income Tax payable by the central and all branch taxpayers.
The application is utilized to report the obligation to withhold/collect and remit Article 21/26 Income Tax using the central NPWP. This obligation applies to taxpayers whose centers and/or branches are registered at Medium Tax Offices with administrative areas other than DKI Jakarta Province as per Appendix B of PER-05/2021.
However, if the Periodic Article 21/26 Income Tax Returns reporting application is not yet available, the remittance and reporting of the Article 21/26 Income Tax withholding obligation shall be carried out using the respective central and branch NPWPs.