a.

that the adjustments to the amount of Personal Tax Relief as of 1 January 2016 have been stipulated under the Minister of Finance Regulation Number 101/PMK.010/2016 concerning Adjustments to the Amount of Personal Tax Relief;

b.

that the fraction of income in connection with the employment of daily and weekly employees as well as other non-permanent employees not subject to Withholding Tax has been stipulated under the Minister of Finance Regulation Number 102/PMK.010/2016 concerning the Determination of the Fraction of Income in Respect of the Employment of Daily and Weekly Employees and Other Non-Permanent Employees Not Subject to Withholding Tax;

c.

that based on the considerations referred to in letter a and letter b as well as to implement the provisions under Article 24 of the Minister of Finance Regulation Number 252/PMK.03/2008 concerning Instructions for the Implementation of Withholding Tax on Income in Respect of Employment, Services and Activities of Individuals and the provisions under Article 4 of the Minister of Finance Regulation Number 102/PMK.010/2016 concerning the Determination of the Fraction of Income in Respect of the Employment of Daily and Weekly Employees and Other Non-Permanent Employees Not Subject to Withholding Tax, it is necessary to enact a Director General of Taxes Regulation concerning Technical Guidelines for Procedures for the Withholding, Remittance and Filing of Article 21 Income Tax and/or Article 26 Income Tax in Respect of the Employment, Services and Activities of Individuals;

 

 

 

 

1.

Law Number 6 of 1983 concerning General Provisions and Tax Procedures (State Gazette of the Republic of Indonesia of 1983 Number 49, Supplement to the State Gazette of the Republic of Indonesia Number 3262) as amended several times, last amended by Law Number 16 of 2009 (State Gazette of the Republic of Indonesia of 2009 Number 62, Supplement to the State Gazette of the Republic of Indonesia Number 4999);

2.

Law Number 7 of 1983 concerning Income Tax (State Gazette of the Republic of Indonesia of 1983 Number 50, Supplement to the State Gazette Number 3263) as amended several times, last amended by Law Number 36 of 2008 (State Gazette of the Republic of Indonesia of 2008 Number 133, Supplement to the State Gazette Number 4893);

3.

Minister of Finance Regulation Number 250/PMK.03/2008 concerning the Amount of Occupational Tax Relief or Pension Expenses Constituting Deductible Expenses for Permanent Employees or Pensioners;

4.

Minister of Finance Regulation Number 252/PMK.03/2008 concerning Instructions for the Implementation of Withholding Tax on Income in Respect of Employment, Services and Activities of Individuals;

5.

Minister of Finance Regulation Number 242/PMK.03/2014 concerning Procedures for the Payment and Remittance of Taxes;

6.

Minister of Finance Regulation Number 101/PMK.010/2016 concerning Adjustments to the Amount of Personal Tax Relief;

7.

Minister of Finance Regulation Number 102/PMK.010/2016 concerning the Determination of the Fraction of Income in Respect of the Employment of Daily and Weekly Employees and Other Non-Permanent Employees Not Subject to Withholding Tax;

 

 

 

 

DIRECTOR GENERAL OF TAXES REGULATION CONCERNING TECHNICAL GUIDELINES ON PROCEDURES FOR THE WITHHOLDING, REMITTANCE AND FILING OF ARTICLE 21 AND/OR ARTICLE 26 INCOME TAX IN RELATION TO EMPLOYMENT, SERVICES AND ACTIVITIES OF INDIVIDUALS.

 

 

 

 

 

Referred to herein this Director General Regulation:

1.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 36 of 2008.

2.

Income tax in respect of employment, services and activities carried out by individual Taxpayers as resident individuals, hereinafter referred to as Article 21 PPh, is a tax on income in the form of salaries, wages, honoraria, allowances and other payments in whatever name and form in connection with employment or position, services and activities carried out by individual residents, referred to in Article 21 of the Income Tax Law.

3.

Income Tax in respect of employment, services and activities carried out by individual Taxpayers as non-resident individuals, hereinafter referred to as Article 26 PPh, is a tax on income in the form of salaries, wages, honoraria, allowances and other payments in whatever name and form in connection with employment or position, services and activities carried out by non-resident individuals, referred to in Article 26 of the Income Tax Law.

4.

Article 21 and/or Article 26 Withholding Agent is an individual Taxpayer or corporate Taxpayer, including a permanent establishment, obliged to withhold taxes on income in connection with employment, services and activities of individuals referred to in Article 21 and Article 26 of the Income Tax Law.

5.

Entity is the entity referred to in Article 1 number 3 of Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last amended by Law Number 16 of 2009.

6.

Event Organiser is an individual or entity as an event organiser that pays remunerations in whatever name and form to individuals in connection with the implementation of these activities.

7.

Income recipient subject to Article 21 Withholding Tax is an individual of resident individual status receiving or accruing income in whatever name and form, provided that it is not excluded under this Director General of Taxes Regulation, from Article 21 and/or Article 26 Withholding Agent as the remuneration in connection with employment, services or activities, including pension recipients.

8.

Income recipient subject to Article 26 Withholding Tax is an individual of non-resident individual status receiving or accruing income in whatever name and form, provided that it is not excluded under this Director General of Taxes Regulation, from Article 21 and/or Article 26 Withholding Agent as the remuneration in connection with employment, services or activities, including pension recipients.

9.

Employee is an individual who employments for an employer, based on a employment agreement or contract, either written or unwritten, to carry out employment in a certain position or activities by deriving remuneration paid based on a certain period, completion of work or other conditions determined by the employer, including an individual who employments in a public position.

10.

Permanent Employees are employees receiving or accruing a certain amount of income on a regular basis, including members of the board of commissioners and members of the supervisory board as well as employees working under a contract for a certain period receiving or accruing a certain amount of income on a regular basis.

11.

Non-Permanent Employee/Freelancer is an employee who only receives income if the employee concerned employments, based on the number of working days, the number of employment units produced or the completion of a type of employment requested by the employer.

12.

Non-Employee income recipient is an individual other than a Permanent Employee and Non-Permanent Employee/Freelancer who accrues income in whatever name and form from Article 21 and/or Article 26 Withholding Agent as the remuneration for services performed based on orders or requests from the provider of income.

13.

Activity participants are individuals involved in certain activities, including attending meetings, sessions, seminars, workshops, education, performances, sports or other activities and receiving or accruing remunerations in connection with their participation in these activities.

14.

Pension recipients are individuals or their heirs/heiresses receiving or accruing remunerations for employment performed in the past, including individuals or their heirs/heiresses who receive old age allowances or old age security.

15.

Regular Income of Permanent Employees is income for Permanent Employees in the form of salaries or wages, all kinds of allowances and remunerations in whatever name given periodically based on conditions determined by the employer, including overtime pay.

16.

Irregular Income of Permanent Employees is income for Permanent Employees other than regular income, which is received once in a year or other periods, including in the form of bonuses, Religious Holiday Allowances (THR), production services, tantième, gratuities or other similar remunerations in whatever name.

17.

Daily wages are wages or remunerations received or accrued by employees that are payable or paid daily.

18.

Weekly wages are wages or remunerations received or accrued by employees that are payable or paid weekly.

19.

Piece rates are wages or remunerations received or accrued by employees that are payable or paid based on the number of employment units produced.

20.

Lump sump payments are wages or remunerations received or accrued by employees that are payable or paid based on the completion of a certain type of employment.

21.

Remunerations for Non-Employees are income in whatever name and form that is payable or given to Non-Employees in connection with performed employment, services or activities, including in the form of honoraria, commissions, fees and other similar income.

22.

Continuous remunerations for Non-Employees are remunerations for Non-Employees that are paid or payable more than once in one calendar year in connection with employment, services or activities.

23.

Remunerations for activity participants are income in whatever name and form that is payable or given to participants in certain activities, including in the form of pocket money, representation money, meeting money, honoraria, gifts or awards and other similar income.

24.

The last Taxable Period is December or a certain Taxable Period in which a Permanent Employee stops working.

 

(1)

Article 21 and/or Article 26 Withholding Agents include:

 

a.

employers consisting of:

 

 

1)

individuals;

 

 

2)

entities; or

 

 

3)

branches, representatives or units, if the party performing part of all of the administration related to the payment of salaries, wages, honoraria, allowances and other payments is the branch, representative or unit.

 

b.

government treasurers or treasurers, including treasurers or treasurers at the Central Government, including the Indonesian National Armed Forces/the Indonesian National Police, Local Governments, government agencies or institutions, other state institutions and Embassies of the Republic of Indonesia overseas, that pay salaries, wages, honoraria, allowances and other payments in whatever name and form in connection with employment or position, services and activities;

 

c.

pension funds, employment social security organising body and other agencies that periodically pay pensions and old age allowances or old age security;

 

d.

individuals conducting business or independent personal services as well as entities that pay:

 

 

1.

honoraria, commission, fees or other payments as the consideration in connection with services performed by resident individuals, including the services of professionals who perform independent personal services and act for and on their own behalf, not for and on behalf of their partnership;

 

 

2.

honoraria, commission, fees or other payments as the consideration in connection with services performed by non-resident individuals;

 

 

3.

honoraria, commission, fees or other remunerations for education and trainees and interns;

 

e.

event organisers, including government agencies, national and international organisations, associations, individuals and other institutions that organise activities, that pay honoraria, gifts or awards in whatever form to individual Taxpayers in connection with an activity.

(2)

Not included as employers obliged to withhold taxes referred to in paragraph (1) subparagraph a or subparagraph b are:

 

a.

embassies;

 

b.

international organisations referred to in the Minister of Finance Regulation stipulating the determination of international organisations not included as Income Tax subjects;

 

c.

international organisations whose Income Tax provisions are based on the provisions under international agreements in which the withholding tax obligation is excluded and these organisations are stipulated by the Minister of Finance;

 

d.

individual employers that do not conduct business or independent personal services and solely employ individuals to perform household employment or employment not in the context of conducting business or independent personal services.

(3)

If an international organisation does not fulfil the provisions referred to in paragraph (2) subparagraph b, the said international organisation constitutes an employer obliged to withhold taxes.

 

 

 

 

 

 

Income recipients subject to Article 21 and/or Article 26 Withholding Tax are individuals who constitute:

a.

Employees;

b.

recipients of severance pay, pension or pension benefits, old age allowances or old age security, including their heirs/heiresses;

c.

Non-Employees receiving or accruing income in connection with the provision of services, including:

 

1.

professionals who perform independent personal services, consisting of lawyers, accountants, architects, doctors, consultants, notaries, appraisers and actuaries;

 

2.

musicians, presenters, singers, comedians, film stars, soap opera stars, commercial stars, directors, film crews, photo models, models, actors/actresses, dancers, sculptors, painters and other artists;

 

3.

sportsmen;

 

4.

advisors, teachers, trainers, public speakers, extension employmenters and moderators;

 

5.

authors, researchers and translators;

 

6.

service providers in all fields, including engineering, computers and application systems, telecommunications, electronics, photography, economics and social affairs as well as service providers to a committee;

 

7.

advertising agencies;

 

8.

project supervisors or managers;

 

9.

couriers or brokers or intermediaries;

 

10.

salespeople;

 

11.

insurance agents; and/or

 

12.

distributors of multilevel marketing or direct selling companies and other similar activities;

d.

members of the board of commissioners or supervisory board who do not also serve as Permanent Employees in the same company;

e.

former employees; and/or

f.

activity participants receiving or accruing income in connection with their participation in an activity, among others:

 

1.

participants in competition in all fields, including sports, arts, agility, science, technology and other competitions;

 

2.

participants in meetings, conferences, sessions, gatherings or employment visits;

 

3.

participants in members in a committee as organisers of certain activities;

 

4.

students and trainees;

 

5.

participants in other activities.

Not included in the definition of income recipients subject to Article 21 Withholding Tax and/or Article 26 Income Tax, referred to in Article 3 are:

a.

diplomatic and consular representatives or other officials from foreign countries and persons seconded to those who employment for and reside with them, provided that they are not Indonesian Citizens and do not receive or accrue other income outside the position or employment in Indonesia as well as the country concerned provides reciprocal treatment;

b.

the representatives to international organisations referred to in Article 3 paragraph (1) subparagraph c of the Income Tax Law, stipulated by the Minister of Finance, provided that they are not Indonesian citizens and do not conduct business or other activities or employment to earn income from Indonesia.

 

 

 

 

 

 

(1)

Income subject to Article 21 and/or Article 26 Withholding Tax is:

 

a.

income received or accrued by Permanent Employees, either in the form of Regular or Irregular Income;

 

b.

income received or accrued regularly by pension recipients in the form of pension or similar income;

 

c.

income in the form of severance pay, pension benefits, old age allowances or old age security that are paid in a lump sum, the payment of which has passed a period of 2 years since the employee stops working;

 

d.

income for Non-Permanent Employees or Freelancers, in the form of daily wages, weekly wages, piece rates, lump sump payments or wages paid on a monthly basis;

 

e.

remunerations for Non-Employees, among others, in the form of honoraria commission, fees and similar remunerations in whatever name and form as remunerations for performed services;

 

f.

remunerations for participants in activities, among others, in the form of pocket money, representation money, meeting money, honoraria, gifts or remunerations in whatever name and form and similar remunerations in whatever name;

 

g.

income in the form of honoraria or irregular remunerations received or accrued by members of the board of commissioners or supervisory board who do not also serve as Permanent Employees in the same company;

 

h.

income in the form of production services, tantième, gratuities, bonuses or other irregular remunerations received or accrued by former employees; or

 

i.

income in the form of withdrawal of pension funds by pension program participants who are still employees, from pension funds whose establishment has been approved by the Minister of Finance.

(2)

Income subject to Article 21 and/or Article 26 Withholding Tax referred to in paragraph (1) also includes revenues in kind and/or other fringe benefits in whatever name and form given by:

 

a.

Taxpayers subject to final Income Tax; or

 

b.

Taxpayers subject to Income Tax based on deemed profit.

 

 

 

 

(1)

Income referred to in Article 5 received or accrued by a resident individual is income subject to Article 21 Withholding Tax.

(2)

Income referred to in Article 5 received or accrued by a non-resident individual is income subject to Article 26 Withholding Tax.

 

 

 

 

 

(1)

If the income referred to in Article 5 paragraph (1) is received or accrued in a foreign currency, the calculation of Article 21 Income Tax and/or Article 26 Income Tax is based on the exchange rate determined by the Minister of Finance applicable when the income is paid or expensed.

(2)

The calculation of Article 21 Income Tax and/or Article 26 Income Tax on income in the form of revenues in kind and/or other fringe benefits referred to in Article 5 paragraph (2) is based on the market price of the given goods or the fair value of the in kind and/or fringe benefit.

 

 

 

 

(1)

Not included in the definition of income subject to Article 21 Withholding Tax is:

 

a.

payment of insurance benefits or remunerations from insurance companies in connection with health insurance, accident insurance, life insurance, endowment insurance and scholarship insurance;

 

b.

revenues in the form of in-kind and/or fringe benefits in whatever form given by the Taxpayer or the Government, except for income referred to in Article 5 paragraph (2)

 

c.

pension contributions paid to a pension fund whose establishment has been approved by the Minister of Finance, contributions of old age allowances or old age security to an old age allowance organising body or administering agencies of employmenter social securities paid by the employer;

 

d.

zakat received by entitled individuals from amil zakat board or institutions established or approved by the government or compulsory religious donations for the followers of acknowledged religions in Indonesia received by entitled individuals of religious institutions established or approved by the Government insofar as there is no business, employment, ownership or control relationship between the parties concerned;

 

e.

scholarships referred to in Article 4 paragraph (3) subparagraph l of the Income Tax Law.

(2)

Income Tax borne by employers, including that borne by the Government, constitutes revenues in the form of fringe benefits referred to in paragraph (1) subparagraph b.

 

 

 

 

 

 

(1)

Article 21 Income Tax base and withholding is as follows:

 

a.

Taxable Income, which applies to:

 

 

1.

Permanent Employees;

 

 

2.

periodic pension recipients;

 

 

3.

Non-Permanent Employees whose income is paid monthly or the cumulative amount of income received in 1 (one) calendar month exceeds IDR4,500,000.00 (four million and five hundred thousand rupiah); and

 

 

4.

Non-Employees referred to in Article 3 letter c who receive continuous consideration.

 

b.

The amount of income that exceeds IDR450,000.00 (four hundred and fifty thousand rupiah) per day, which applies to Non-Permanent Employees or Freelancers who receive daily wages, weekly wages, piece rates or lump sump payments, insofar as the cumulative income received within 1 (one) calendar month has not exceeded IDR4,500,000.00 (four million and five hundred thousand rupiah);

 

c.

50% (fifty per cent) of the amount of gross income, which applies to Non-Employees referred to in Article 3 letter c who receive non-continuous remuneration;

 

d.

Total gross income, which applies to income recipients other than the income recipients referred to in subparagraph a, b and subparagraph c.

(2)

Article 26 Income Tax base and withholding is the amount of gross income.

 

 

 

 

(1)

The total gross income received or accrued by an income recipient subject to Article 21 Withholding Tax and/or Article 26 Income Tax is the entire amount of income referred to in Article 5 received or accrued in a period or when it is paid.

(2)

Taxable Income referred to in Article 9 paragraph (1) subparagraph a is as follows:

 

a.

for Permanent Employees and periodic pension recipients, net income less Personal Tax Relief;

 

b.

for Non-Permanent Employees, the amount of gross income less Personal Tax Relief; and

 

c.

for Non-Employees referred to in Article 3 letter c, 50% (fifty per cent) of the amount of gross income less Personal Tax Relief per month.

(3)

The amount of net income for Permanent Employees subject to Article 21 Withholding Tax is the total gross income less:

 

a.

occupational tax relief, amounting to 5% (five per cent) of gross income, a maximum of IDR500,000.00 (five hundred thousand rupiah) a month or IDR6,000,000.00 (six million rupiah) a year;

 

b.

contributions related to the salary paid by employees to a pension fund whose establishment has been approved by the Minister of Finance or an old-age allowance or old-age benefit organising body equivalent to a pension fund whose establishment has been approved by the Minister of Finance.

(4)

The amount of net income for periodic pension recipients subject to Article 21 Withholding Tax is the entire amount of gross income less pension costs, amounting to 5% (five per cent) of gross income, a maximum of IDR200,000.00 (two hundred thousand rupiah) a month or IDR2,400,000.00 (two million and four hundred thousand rupiah) a year.

(5)

If Non-Employees referred to in Article 3 letter c that provide services to Article 21 and/or Article 26 Withholding Agent:

 

a.

employ another person as an employee, the amount of gross income referred to in paragraph (1) amounts to the payment after deducted by the fraction of the salary or wages of the said employee, unless under the contract/agreement, the fraction of the salary or wages of the said employee cannot be separated, the gross income amounts to the paid amount; or

 

b.

supply material or goods delivery, the amount of gross income referred to in paragraph (1) is only for the provision of services, unless under the contract/agreement, the provision of services and material or goods cannot be separated, the amount of gross income includes the provision of services and materials or goods.

(6)

If the amount of gross income referred to in paragraph (1) is paid to a doctor who practices in hospitals and/or clinics, gross income amounts to the doctor’s services paid by patients through hospitals and/or clinics before deducted by expenses or profit sharing by the hospitals and/or clinics.

 

 

 

 

(1)

The amount of Personal Tax Relief per year is as follows:

 

a.

IDR54,000,000,000 (fifty-four million rupiah) for an individual Taxpayer;

 

b.

additional IDR4,500,000.00 (four million and five hundred thousand rupiah) for a married Taxpayer;

 

c.

additional IDR4,500,000.00 (four million and five hundred thousand rupiah) for each family member related by blood and marriage in a lineage and adopted children, constituting full dependants, a maximum of 3 people for each family.

(2)

Personal Tax Relief per month referred to in Article 10 paragraph (2) subparagraph c is Personal Tax Relief per year referred to in paragraph (1) divided by 12 (twelve), of:

 

a.

IDR4,500,000.00 (four million and five hundred thousand rupiah) for an individual Taxpayer;

 

b.

additional IDR375,000.00 (three hundred and seventy-five thousand rupiah) for a married Taxpayer;

 

c.

additional IDR375,000.00 (three hundred and seventy-five thousand rupiah) for each family member related by blood and marriage in a lineage and adopted children, constituting full dependants, a maximum of 3 people for each family.

(3)

To the amount of Personal Tax Relief for female employees, the following provisions shall apply:

 

a.

for married female employees, amounts to Personal Tax Relief for themselves;

 

b.

for unmarried female employees, amounts to Personal Tax Relief for themselves plus the Personal Tax Relief for their fully dependent members of the family.

(4)

If a married female employee is able to show a written statement from the Local Government at the lowest level of subdistrict level that her husband does not receive or accrue income, Personal Tax Relief amounts to Personal Tax Relief for herself plus Personal Tax Relief for her status of being married and Personal Tax Relief for full dependant members of the family.

(5)

The amount of Personal Tax Relief is determined based on the conditions at the beginning of the calendar year.

(6)

Excluded from the provisions referred to in paragraph (5), the amount of Personal Tax Relief for employees who have just arrived and resided in Indonesia in a fraction of a calendar year is determined based on the conditions at the beginning of the month of the fraction of the calendar year concerned.

 

 

 

 

(1)

To income of Non-Permanent Employees or Freelancers who are not paid monthly or the cumulative amount in 1 (one) calendar month does not exceed IDR4,500,000.00 (four million and five hundred thousand rupiah), the following provisions apply:

 

a.

Article 21 Income Tax is not withheld, if the daily income or average daily income does not exceed IDR450,000.00 (four hundred and fifty thousand rupiah);

 

b.

Article 21 Income Tax is withheld, if the daily income or average daily income exceeds IDR450,000.00 (four hundred and fifty thousand rupiah) and the amount of IDR450,000.00 (four hundred and fifty thousand rupiah) constitutes deductible expenses.

(2)

The average daily income referred to in paragraph (1) is the average weekly wage, piece rate or lump sump payment for each working day.

(3)

If a Non-Permanent Employee has accrued a cumulative income in 1 (one) calendar month exceeding IDR4,500,000.00 (four million and five hundred thousand rupiah), the amount that may constitute deductible expenses is the actual Personal Tax Relief.

(4)

The actual Personal Tax Relief referred to in paragraph (3) amounts to the Personal Tax Relief for the actual number of working days.

(5)

Personal Tax Relief per day as the basis for determining the actual Personal Tax Relief amounts to Personal Tax Relief per year referred to in Article 11 paragraph (1) divided by 360 (three hundred and sixty) days.

(6)

If the provisions in the field of manpower stipulate the obligation to include Non-Permanent Employees or Freelancers in the old-age benefit or old-age allowance program, the old-age benefit contributions or old-age allowance contributions self-paid by the Non-Permanent Employees to an employment social security organising body or old-age allowance organising body, constitute deductible expenses.

 

 

 

 

(1)

Non-Employee income recipients referred to in Article 9 paragraph (1) subparagraph a number 4 may obtain a reduction in the form of Personal Tax Relief insofar as the person concerned already has a Tax Identification Number and only accrues income from an employment relationship with one Article 21 and/or Article 26 Withholding Agent and does not receive other income.

(2)

To obtain a reduction in the form of Personal Tax Relief referred to in paragraph (1), Non-Eemployee income recipients must submit a photocopy of the Tax Identification Number card and married women must submit a photocopy of the husband’s Tax Identification Number card and a photocopy of the marriage certificate and family card.

 

 

 

 

 

(1)

Rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law are applied to the Taxable Income of:

 

a.

Permanent Employees;

 

b.

Periodic Pension Recipients paid monthly;

 

c.

Non-Permanent Employees or Freelancers paid monthly.

(2)

For the calculation of Article 21 Income Tax that must be withheld every Taxable Period, except for the last Taxable Period, the rates are applied to the estimated income to be accrued in 1 (one) year, with the following provisions:

 

a.

estimated regular income is the amount of regular income in 1 (one) month multiplied by 12 (twelve);

 

b.

if there is an additional irregular income, the estimated income to be accrued in 1 (one) year is the amount in subparagraph a plus the amount of irregular income.

(3)

The amount of Article 21 Income Tax that must be withheld for each Taxable Period referred to in paragraph (2) is:

 

a.

for regular income is the amount of Income Tax payable on the amount of income referred to in paragraph (2) subparagraph a divided by 12 (twelve);

 

b.

for irregular income is the difference between Income Tax payable on the total income referred to in paragraph (2) subparagraph b and Income Tax payable on the total income referred to in paragraph (2) subparagraph a.

(4)

If Permanent Employees’ subjective tax obligations start from the beginning of the calendar year and they start working after January, including employees who formerly employmented for other employers, the number of months constituting the multiplier factor referred to in paragraph (2) or the dividing factor referred to in paragraph (3) is the remaining number of months in the calendar year since the person concerned starts working.

(5)

The amount of Article 21 Income Tax that must be withheld for the last Taxable Period is the difference between Income Tax payable on all taxable income for 1 (one) tax year or a fraction of the tax year and Article 21 Income Tax that has been withheld in the previous periods in the tax year concerned.

(6)

If Permanent Employees’ subjective tax obligations only include a fraction of the tax year, Article 21 Income Tax payable for that fraction of the tax year is calculated based on the annualised Taxable Income, in proportion to the number of months in the fraction of the tax year concerned.

(7)

If Permanent Employees stop working before December and the amount of Article 21 Income Tax that has been withheld in the calendar year concerned is greater than Article 21 Income Tax payable for 1 (one) tax year, the overpayment of Article 21 Income Tax that has been withheld is refunded to the Permanent Employees concerned together with the provision of Article 21 Withholding receipt, no later than the end of the following month after they stop working.

(8)

The amount of Taxable Income as the basis for applying the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law referred to in paragraph (1) is rounded down to a full thousand.

 

 

 

 

(1)

For income received or accrued by Non-Permanent Employees or Freelancers in the form of daily wages, weekly wages, piece rates, lump sump payments and daily pocket money, insofar as the income is not paid monthly, the first bracket rate referred to in Article 17 paragraph (1) subparagraph a of the Income Tax Law is applied to:

 

a.

the amount of daily gross income which exceeds IDR450,000.00 (four hundred and fifty thousand rupiah); or

 

b.

the amount of gross income less the actual Personal Tax Relief, if the total cumulative income in 1 (one) calendar month exceeds IDR4,500,000.00 (four million and five hundred thousand rupiah).

(2)

If the total cumulative income in one calendar month exceeds IDR10,200,000.00 (ten million and two hundred thousand rupiah), Article 21 Income Tax is calculated by applying the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law to the amount of annualised Taxable Income.

 

 

 

 

(1)

The rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law are applied to the accumulative amount of:

 

a.

Taxable Income, by 50% (fifty per cent) of the amount of gross income less Personal Tax Relief per month, received or accrued by Non-Employees referred to in Article 9 paragraph (1) subparagraph a number 4 that fulfil the provisions referred to in Article 13 paragraph (1);

 

b.

50% (fifty per cent) of the amount of gross income for every payment of continuous remunerations for Non-Employees referred to in Article 3 subparagraph c that do not fulfil the provisions referred to in Article 13 paragraph (1);

 

c.

the amount of gross income in the form of honoraria or irregular remunerations received or accrued by members of the board of commissioners or supervisory board who do not also serve as Permanent Employees in the same company;

 

d.

the amount of gross income in the form of production services, tantième, gratuities, bonuses or other irregular remunerations received or accrued by former employees; or

 

e.

the amount of gross income in the form of the withdrawal of pension funds by pension program participants who are still employees, from pension funds whose establishment has been approved by the Minister of Finance.

(2)

The rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law are applied to:

 

a.

50% (fifty per cent) of the amount of gross income for every payment of non-continuous remunerations for Non-Employees;

 

b.

the amount of gross income for each full and undivided payment received by activity participants.

 

 

 

 

The imposition of Article 21 Income Tax on state officials, civil servants, members of the Indonesian National Armed Forces, members of the Indonesian National Police as well as their pensioners on income borne by the State Budget or the Local Government Budget, is regulated based on specifically stipulated provisions concerning this matter.

 

 

 

 

The imposition of Article 21 Income Tax on employees on severance pay, pension benefits, old age allowances or old age security paid in a lump sum, is regulated based on specifically stipulated provisions concerning this matter.

 

 

 

 

(1)

The final Article 26 Income Tax rate of 20% (twenty per cent) is applied to the gross income received or accrued by as the remuneration for employment, services and activities carried out by individuals of non-resident individual status taking into account the provisions under the Tax Treaty that applies between the Republic of Indonesia and the non-resident individual’s country of domicile.

(2)

Article 26 Income Tax referred to in paragraph (1) is non-final if the status of the individual as a non-resident Taxpayer changes to a resident Taxpayer.

 

 

 

 

 

 

(1)

For income recipients subject to Article 21 Withholding Tax that do not have a Tax Identification Number, Article 21 Income Tax is imposed with a rate of 20% (twenty per cent) higher than the rate applied to Taxpayers that have a Tax Identification Number.

(2)

The amount of Article 21 Income Tax that must be withheld referred to in paragraph (1) is 120% (one hundred and twenty per cent) of the total Article 21 Income Tax that should be withheld if the person concerned has a Tax Identification Number.

(3)

Article 21 Withholding Tax referred to in paragraph (1) only applies to non-final Article 21 Withholding Tax.

(4)

If Permanent Employees or periodic pension recipients as income recipients that have been subject to Article 21 Withholding Tax at a higher rate as referred to in paragraph (1) register themselves to obtain a Tax Identification Number in the calendar year concerned no later than Article 21 Withholding Tax for the December Taxable Period, Article 21 Income Tax which has been withheld on the difference in the imposition of a rate of 20% (twenty per cent) higher is set off against Article 21 Income Tax payable for the following months after having a Tax Identification Number.

 

 

 

 

 

 

(1)

Article 21 Income Tax and/or Article 26 Income Tax become payable for Income Recipients when payment is made or when the income concerned becomes payable.

(2)

Article 21 Income Tax and/or Article 26 Income Tax become payable for Article 21 and/or Article 26 Withholding Agent for each Taxable Period.

(3)

When the tax becomes payable for each Taxable Period referred to in paragraph (2) is at the end of the month the payment is made or at the end of the month the income concerned becomes payable.

 

 

 

 

 

 

(1)

Article 21 and/or Article 26 Withholding Agents and income recipients subject to Article 21 Withholding Tax must register with the Tax Office pursuant to statutory tax provisions.

(2)

Employees, periodic pension recipients and Non-Employees referred to in Article 9 paragraph (1) subparagraph a number 4 are required to prepare a statement letter containing the number of family dependants at the beginning of the calendar year or when starting to become a resident individual as the basis for the determination of Personal Tax Relief and must submit it to the Article 21 and/or Article 26 Withholding Agent when starting employment or starting retirement.

(3)

In the event of changes to family dependants, employees, periodic pensioners and Non-Employees referred to in Article 9 paragraph (1) subparagraph a number 4 are required to prepare a new statement letter and submit it to the Article 21 and/or Article 26 Withholding Agent no later than the start of the next calendar year.

(4)

Article 21 and/or Article 26 Withholding Agents must calculate, withhold, remit and file Article 21 Income Tax and/or Article 26 Income Tax payable for each calendar month.

(5)

Article 21 and/or Article 26 Withholding Agents must prepare notes or working papers for the calculation of Article 21 Income Tax and/or Article 26 Income Tax for each income recipient, which becomes the basis for filing Article 21 Income Tax and /or Article 26 Income Tax payable for each Taxable Period and must retain records or working papers for the calculation pursuant to statutory tax provisions.

(6)

Provisions on the obligation to file Article 21 and/or Article 26 Withholding Tax for each calendar month referred to in paragraph (4) remain applicable, if the amount of tax withheld in the month concerned is nil.

(7)

If in a month, there is a tax overpayment of Article 21 Income Tax and/or Article 26 Income Tax payable by the Article 21 and/or Article 26 Withholding Agents, the overpayment may be set off against Article 21 Income Tax and/or Article 26 Income Tax payable in the following month through Periodic Article 21 Income Tax and/or Article 26 Income Tax Returns.

 

 

 

 

(1)

Article 21 and/or Article 26 Withholding Agents must provide Article 21 Withholding receipt for income received or accrued by Permanent Employees or periodic pension recipients no later than 1 (one) month after the calendar year ends.

(2)

If Permanent Employees stop working before December, the Article 21 Withholding receipt referred to in paragraph (1) must be given no later than 1 (one) month after the person concerned stops working.

(3)

Article 21 and/or Article 26 Withholding Agents must provide Article 21 Withholding receipt for Article 21 Withholding Tax other than Permanent Employees and periodic pension recipients referred to in paragraph (1) as well as Article 26 Withholding receipt every time Article 26 Income Tax is withheld.

(4)

If in 1 (one) calendar month, more than 1 (one) income payment is made to one income recipient, the Article 21 and/or Article 26 Withholding receipt referred to in paragraph (3) may be prepared once for 1 (one) calendar month.

(5)

The format of Article 21 and/or Article 26 Withholding Tax form shall be stipulated by a separate Director General of Taxes Regulation.

 

 

 

 

(1)

Article 21 Income Tax and/or Article 26 Income Tax withheld by Article 21 and/or Article 26 Withholding Agents for each Taxable Period must be remitted to the post office or bank appointed by the Minister of Finance, no later than 10 (ten) days after the Taxable Period ends.

(2)

Article 21 and/or Article 26 Withholding Agents must file the withholding and remittance of Article 21 Income Tax and/or Article 26 Income Tax for each Taxable Period by filing Periodic Article 21 Income Tax and/or Article 26 Income Tax Returns to the Tax Office where the Article 21 and/or Article 26 Withholding Agents are registered, no later than 20 (twenty) days after the Taxable Period ends.

(3)

If the remittance due date for Article 21 Income Tax and/or Article 26 Income Tax referred to in paragraph (1) and the filing deadline for Article 21 Income Tax and/or Article 26 Income Tax referred to in paragraph (2) fall on a holiday, including Saturdays or national holidays, the remittance and filing of Article 21 Income Tax and/or Article 26 Income Tax may be carried out on the following working day.

 

 

 

 

(1)

The amount of withheld Article 21 Income Tax constitutes a tax credit for income recipients subject to withholding for the tax year concerned, except for final Article 21 Income Tax.

(2)

The amount of Article 21 Withholding Tax on the difference in the application of a rate of 20% (twenty per cent) higher for Permanent Employees or periodic pension recipients before having a Tax Identification Number that has been set off against Article 21 Income Tax is payable for the following months in the following calendar year referred to in Article 20 paragraph (4), excluding the tax credit referred to in paragraph (1).

(3)

If a Taxpayer that has been subject to Article 21 Withholding Tax at a higher rate as referred to in Article 20 paragraph (1) registers to obtain a Tax Identification Number, Article 21 Income Tax that has been withheld may be credited in the Annual Income Tax Return for Individual Taxpayers for the tax year concerned.

(4)

If the Taxpayer referred to in paragraph (3) files the Annual Income Tax Return stating an overpayment, the filing must be performed within a maximum period of 3 (three) years after the end of the tax year concerned.

(5)

If the Annual Income Tax Return stating the amount of overpayment referred to in paragraph (4) is filed after 3 (three) years after the end of the tax year concerned and the Taxpayer has been reprimanded in writing, it is not considered the Annual Income Tax Return.

 

 

 

 

General instructions and examples of the calculation of Article 21 and/or Article 26 Withholding Tax are listed in the Appendix which constitutes an integral part of this Director General of Taxes Regulation.

 

 

 

 

 

With the enactment of the Minister of Finance Regulation Number 101/PMK.010/2016 concerning Adjustments to the Amount of Personal Tax Relief, to the calculation of Article 21 Income Tax for the 2016 Tax Year, the following provisions apply:

a.

the calculation and remittance of Article 21 Income Tax and filing of Periodic Article 21 Income Tax Returns for the 2016 Tax Year are calculated using Personal Tax Relief pursuant to the provisions under the Minister of Finance Regulation Number 101/PMK.010/2016;

b.

Article 21 Income Tax for the January to June Taxable Periods that has been calculated, remitted and filed using Personal Tax Relief pursuant to the provisions under the Minister of Finance Regulation Number 122/PMK.010/2015, Periodic Article 21 Income Tax Returns are amended and in the event of an overpayment, it may be carried forward starting from the July 2016 Taxable Period; and

c.

Article 21 Income Tax payable on the amendment to Periodic Article 21 Income Tax Returns for the January to June 2016 Taxable Periods referred to in letter b is calculated pursuant to this Director General of Taxes Regulation.

 

 

 

 

 

 

When this Director General of Taxes Regulation comes into force, the Director General of Taxes Regulation Number PER-32/PJ/2015 concerning Technical Guidelines for the Withholding, Remittance and Filing of Article 21 Income Tax and/or Article 26 Income Tax in Respect of Employment, Services and Activities of Individuals is revoked and declared invalid.

 

 

 

 

This Director General of Taxes Regulation shall come into force on the date of enactment.

 

 

 

 

 

Enacted in Jakarta
on 29 December 2016
DIRECTOR GENERAL OF TAXES,
signed
KEN DWIJUGIASTEADI