The Director General of Taxes has issued provisions on the procedures for tax withholding and collection as well as the filing of periodic tax returns for government agencies. The policy is outlined in the Director General of Taxes Regulation No. Per-17/PJ/2021 concerning the Format and Procedures for the Preparation of Tax Withholding and/or Collection Receipts, as well as the Format, Contents, Procedures for the Completion and Filing of Periodic Tax Returns for Government Agencies (PER-17/2021).

This regulation has been issued to provide legal certainty and improve services and convenience for government agency taxpayers in preparing withholding and collection receipts and filing periodic Article 21 and/or Article 26 Income Tax Returns as well as unification periodic tax returns for government agencies.

As per Article 2 paragraph (1) of PER-17/2019, the withholding agent/tax collector withholding and/or collecting taxes on government expenditures must produce tax withholding/collection receipts and submit these receipts to the party subject to withholding/collection. In addition, the withholding agent/collector is also required to file tax withholding/collection receipts to the DGT using periodic tax returns for government agencies.

Withholding/collection receipts may include 21/26 withholding receipts for government agencies, unification withholding/collecting receipts for government agencies, and VAT/STLGs collection receipts. Periodic tax returns for government agencies, on the other hand, consists of 21/26 tax returns for government agencies and unification tax returns for government agencies. Further, unification tax returns for government agencies include several types of taxes, i.e. Article 4 paragraph (2) Income Tax, Article 15 Income Tax, Article 22 Income Tax, Article 23 Income Tax, Article 26 Income Tax, and VAT/STLGs.

21/26 withholding receipts for government agencies need not be prepared if there is no income tax withholding. 21/26 withholding receipts for government agencies may continue to be prepared with the following conditions:

i.	Article 21 Income Tax is not withheld as the amount of received income does not exceed the personal allowance (Penghasilan Tidak Kena Pajak/PTKP), daily income threshold, or monthly income threshold as stipulated in applicable regulations;
ii.	the amount of withheld Article 21 Income Tax is nil due to a withholding exemption certificate (Surat Keterangan Bebas/SKB) or is subject to a 0% rate;
iii.	withheld Article 21 income tax is borne by the government as per applicable regulations;
iv.	withheld Article 21 income tax is provided with income tax facilities as per the provisions of applicable regulations; and/or
v.	the amount of withheld Article 26 Income Tax is nil based on the provisions of the tax treaty (Perjanjian Penghindaran Pajak Berganda/P3B) indicated by a certificate of domicile and/or receipt of a certificate of domicile for non-resident taxpayers (Wajib Pajak Luar Negeri/WPLN).

Unification withholding/collection receipts for government agencies consist of withholding/collection receipts of Article 4 paragraph (2), Article 15, Article 22, Article 23 Income Taxes, and withholding receipts of Article 26 Income Tax. In the event that in a taxable period there are two or more income tax withholding/collection transactions on the same parties and taxable object code, the tax withholding agent/collector may prepare one unification withholding/collection receipt for government agencies for these transactions.

Moreover, unification withholding/collection receipts for government agencies do not need to be made in the event that there is no income tax withholding or collection. However, unification withholding/collection receipts for government agencies continue to be prepared in the following cases:

i.	the amount of withheld/collected income tax is nil due to a SKB;
ii.	transactions are carried out with taxpayers who have confirmed Gov. Reg. No. 23 of 2018 certificates;
iii.	the amount of withheld Article 26 Income Tax is nil based on the provisions of the tax treaty indicated by a certificate of domicile and/or receipt of a certificate of domicile for non-resident taxpayers;
iv.	withheld/collected income taxes are borne by the government as per statutory provisions in the field of taxation;
v.	withheld/collected income taxes are provided with income tax facilities as per statutory provisions in the field of taxation; and/or
vi.	income tax withholding/collection is carried out using a Tax Payment Slip (Surat Setoran Pajak/SSP), state revenue proof (Bukti Penerimaan Negara/BPN), or other administrative means equivalent to the SSP.

VAT/STLGs collection receipts may take the form of tax invoices or certain documents equivalent to tax invoices and SSP, BPN, or other administrative means equivalent to SSP.

In preparing 21/26 withholding receipts for government agencies and unification withholding/collection receipts for government agencies, the withheld and/or collected party must provide information on identity for resident taxpayers or non-resident taxpayers to the withholding agent/collector. In the event that a resident taxpayer wishes to apply the provisions of a tax treaty, the non-resident taxpayer must provide a certificate of domicile and/or receipt of a certificate of domicile.

Tax withholding/collection receipts and periodic tax returns for government agencies in the form of electronic documents are prepared and filed through the e-bupot application for government agencies. With regard to tax withholding/collection receipts that have been filed in periodic tax returns for government agencies, three measures may be undertaken by the withholding agent/collector as follows.

i.	rectification of 21/26 withholding receipts for government agencies and unification withholding/collection receipts for government agencies in the event of errors in the completion of tax withholding/collection receipts or a return transaction;
ii.	replacement of VAT/STLGs collection receipts in the event of errors in the completion of VAT/STLGs collection receipts or a return transaction; or
iii.	cancellation of 21/26 withholding receipts for government agencies, unification withholding/collection receipts for government agencies, and VAT/STLGs collection receipts in the event of a cancelled transaction.

Tax withholding agents/collectors may produce 21/26 withholding receipts for government agencies and additional unification withholding/collection receipts for government agencies for taxable objects that have not been filed in periodic tax returns for government agencies.

Rectification, cancellation, or replacement of tax withholding/collection receipts and/or preparation of additional tax withholding/collection receipts may be performed on condition that the Director General of Taxes has not conducted an audit or open preliminary investigation for the taxable period concerned. Rectification, cancellation, replacement, and addition of tax withholding/collection receipts shall be filed in the rectified periodic tax returns for government agencies.

Periodic tax returns for government agencies are rectified by providing marks on the space provided in the periodic tax returns for government agencies. Periodic tax returns for government agencies may be rectified on the condition that the Director General of Taxes has not conducted an audit or open preliminary investigation for the taxable period concerned.

In the event that the rectification of period tax returns for government agencies results in tax underpayment, the tax withholding agent/collector must first pay the tax underpayment. The amount of tax underpayment due to rectifications submitted after the due date of remittance is subject to administrative penalties in the form of interests.

Next, if the rectification of periodic tax returns for government agencies results in tax overpayment, the tax overpayment may be carried forward to the next taxable period by the tax withholding agent/collector. If the rectification results in tax overpayment in the unification tax returns for government agencies, the tax withholding agent/collector may apply for overbooking.

21/26 withholding receipts for government agencies and unification withholding/collection receipts for government agencies are prepared through the e-bupot application for government agencies. Periodic tax returns for government agencies are also electronically signed with an electronic signature and filed through the e-bupot application for government agencies. Tax withholding/collection receipts are filed using periodic tax returns for government agencies no later than 20 days after the taxable period ends.

When this regulation comes into effect, the obligation to file periodic income tax returns and periodic VAT returns for taxable periods before the September 2021 taxable period shall be carried out based on PER-147/PJ/2006, PER-53/PJ/2009, PER-14/PJ/2013, or PER-04/PJ/2017. This Director General of Taxes Regulation comes into effect from the September 2021 taxable period.

Procedures for Tax Withholding and Collection and Filing of Periodic Tax Returns for Government Agencies