a.

that to provide greater legal certainty, convenience and simplicity in the implementation of withholding tax on income in connection with employment, services and activities of individuals, it is necessary to improve the provisions on the calculation and withholding tax on the said income;

b.

that the Minister of Finance Regulation Number 252/PMK.03/2008 concerning Instructions for the Implementation of Withholding Tax on Income in Connection with Employment, Services and Activities of Individuals does not yet accommodate the need for adjustments to withholding rates and the calculation of Article 21 income tax on income in connection with employment, services and activities of individuals, thereby, needs to be replaced;

c.

that based on the reimbursements referred to in letter a and letter b, as well as to implement the provisions under Article 21 paragraph (8) of Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations, it is necessary to enact a Minister of Finance Regulation concerning Instructions for the Implementation of Withholding Tax on Income in Connection with Employment, Services and Activities of Individuals;

 

 

 

 

 

1.

Article 17 paragraph (3) of the 1945 Constitution of the Republic of Indonesia;

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 of the Republic of Indonesia Number 3263) as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations (State Gazette of the Republic of Indonesia of 2021 Number 246, Supplement to the State Gazette of the Republic of Indonesia Number 6736);

3.

Law Number 39 of 2008 concerning State Ministries (State Gazette of the Republic of Indonesia of 2008 Number 166, Supplement to the State Gazette of the Republic of Indonesia Number 4916);

4.

Government Regulation Number 58 of 2023 concerning Article 21 Withholding Tax Rates on Income in Connection with Employment, Services or Activities of Individual Taxpayers (State Gazette of the Republic of Indonesia of 2023 Number 163, Supplement to the State Gazette of the Republic of Indonesia Number 6904);

5.

Presidential Regulation Number 57 of 2020 concerning the Ministry of Finance (State Gazette of the Republic of Indonesia of 2020 Number 98);

6.

Minister of Finance Regulation Number 118/PMK.01/2021 concerning the Organisation and Employment Procedures of the Ministry of Finance (Official Gazette of the Republic of Indonesia of 2021 Number 1031) as amended several times, last amended by the Minister of Finance Regulation Number 135 of 2023 concerning the Second Amendment to the Minister of Finance Regulation Number 118/PMK.01/2021 concerning the Organisation and Employment Procedures of the Ministry of Finance (Official Gazette of the Republic of Indonesia of 2022 Number 954);

 

 

 

 

 

MINISTER OF FINANCE REGULATION CONCERNING INSTRUCTIONS FOR THE IMPLEMENTATION OF WITHHOLDING TAX ON INCOME RELATED TO EMPLOYMENT, SERVICES AND ACTIVITIES OF INDIVIDUALS.

 

 

 

 

 

CHAPTER I
GENERAL PROVISIONS
 

Referred to herein this Ministerial Regulation:

1.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations.

2.

Article 21 Income Tax is a tax on income in the form of salaries, wages, honoraria, allowances and other payments in whatever name and form in respect of employment or position, services and activities conducted by resident individual taxpayers, referred to in Article 21 of the Income Tax Law.

3.

Article 26 Income Tax in Connection with Employment, Services and Activities is a tax on income in the form of salaries, wages, honoraria, allowances and other payments in whatever name and form in respect of employment or position, services and activities conducted by non-resident individual taxpayers, referred to in Article 26 of the Income Tax Law.

4.

Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities Withholding Agents are individual taxpayers, government agencies or corporate taxpayers, including permanent establishments, obliged to withhold tax 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.

Entities are the entities 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 7 of 2021 concerning the Harmonisation of Tax Regulations.

6.

Government Agencies are central government agencies, local government agencies, including village government agencies, which carry out government activities and have the authority and responsibility for the use of the budget.

7.

Event Organiser is an individual taxpayer or corporate taxpayer as the organiser of certain activities that pays remunerations in whatever name and form to individuals in connection with the implementation of the said activities.

8.

Independent Personal Services are employment carried out by individuals with special skills as a business to earn income that is not bound by an employment relationship.

9.

Employees are individuals who employment for an employer, either as permanent employees or non-permanent employees based on a employment agreement or contract, either written or unwritten, to perform employment in certain positions or activities by accruing remunerations received or accrued based on a certain period, completion of employment or other conditions determined by the employer, including individuals who perform employment in Government Agencies.

10.

Permanent Employees are Employees receiving or accruing income in a certain amount on a regular basis, including members of the board of commissioners and members of the supervisory board as well as Employees who employment based on a contract for a certain period insofar as the Employees concerned employment full time in their jobs.

11.

Non-Permanent Employees are Employees, including freelancers, who only receive income if the Employees concerned employment, based on the number of working days, the number of produced employment units or the completion of a type of employment requested by the employer.

12.

Non-Employees are individuals other than Permanent Employees and Non-Permanent Employees who accrue income in whatever name and form as remunerations for Independent Personal Services or services performed based on orders or requests from the income providers.

13.

Pensioners are individuals or their heirs/heiresses, including widows, widowers and/or other heirs/heiresses, who receive or accrue remunerations periodically in the form of pension, pension benefits, old age allowances or old age security, for employment performed in the past.

14.

Event Participants are individuals who receive or accrue remunerations in connection with their participation in an activity, other than that received by Permanent Employees from the employer.

15.

Former Employees are individuals formerly constituting Employees of an employer, but no longer employment for the employer.

16.

Personal Tax Relief is the threshold of an individual taxpayer’s income not subject to taxes.

17.

Taxable Period is 1 (one) calendar month or a fraction of 1 (one) calendar month.

18.

Last Taxable Period is the December period or a certain Taxable Period in which Permanent Employees stop working, or a certain Taxable Period where Pensioners stop receiving pension-related money.

19.

Tax Year is a period of 1 (one) calendar year.

20.

State Officials are state officials stipulated under the State Civil Apparatus Law.

21.

Civil Servants, hereinafter abbreviated to PNS, are Civil Servants stipulated under the Law that stipulates the State Civil Apparatus.

22.

Members of the Indonesian National Armed Forces, hereinafter referred to as TNI Members, are soldiers stipulated under the Law stipulating the Indonesian National Armed Forces.

23.

Members of the Indonesian National Police, hereinafter referred to as POLRI Members, are members of the Indonesian National Police stipulated under the Law stipulating the Indonesian National Police.

24.

State Budget, hereinafter abbreviated to APBN, is the annual financial plan of the state government approved by the House of Representatives.

25.

Local Government Budget, hereinafter abbreviated to APBD, is the annual financial plan of the local governance approved by the Regional Legislative Council.

26.

Minister is the minister who administers governmental affairs in the field of state finances.

 

 

 

 

 

CHAPTER II
WITHHOLDING AGENTS AND INCOME RECIPIENTS
 

(1)

Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities must be withheld by Withholding Agents.

(2)

The Withholding Agents referred to in paragraph (1) consist of:

 

a.

employers, namely individuals and Entities, including head offices and branches, representatives or units that pay salaries, wages, honoraria, allowances and other payments in whatever name and form, including remunerations in the form of in-kind and/or fringe benefits, as remunerations in connection with employment;

 

b.

Government Agencies, including non-ministerial government institutions, secretariats of state institutions, secretariats of non-structural institutions and representatives of the Republic of Indonesia overseas, that pay salaries, wages, honoraria, allowances and other payments in whatever name and form in connection with employment, services and activities;

 

c.

pension funds, worker social security programme administering agencies and other agencies that pay pensions and old age allowances, old age security and/or other payments with whatever name related to pension programmes, established pursuant to statutory provisions;

 

d.

individuals and Entities, that pay honoraria or other payments as remunerations in connection with services performed by individuals, including the services of professionals conducting Independent Personal Services and acting for and on their own behalf, not for and on behalf of their partnership; and

 

e.

Event Organisers, including Entities, Government Agencies, national and international organisations, associations, individuals and other institutions that organise activities, which pay honoraria, gifts or awards in whatever form in connection with an activity.

(3)

Not included in the employers obliged to withhold taxes referred to in paragraph (2) subparagraph a, are:

 

a.

embassies;

 

b.

international organisations:

 

 

1.

as referred to in Article 3 paragraph (1) subparagraph c of the Income Tax Law provided that:

 

 

 

a)

Indonesia is a member of the aforementioned organisations; and

 

 

 

b)

they do not conduct business or other activities to derive income from Indonesia, except providing the government with loans funded by the members’ contributions; and

 

 

2.

are specifically stipulated based on international agreements referred to in the Ministerial regulations stipulating the implementation of the income tax treatment pursuant to the provisions under the international agreements, 

 

 

that have been determined by the Minister; and

 

c.

individuals who:

 

 

1.

do not conduct business or Independent Personal Services; or

 

 

2.

conduct business or Independent Personal Services and employ individuals who:

 

 

 

a)

solely perform household employment; or

 

 

 

b)

conduct business or services that are not related to the business or Independent Personal Services of the employers.

 

 

 

 

 

(1)

Income recipients subject to the Article 21 and/or Article 26 Withholding Tax in Connection with Employment, Services and Activities are individual taxpayers, including:

 

a.

Permanent Employees;

 

b.

Pensioners;

 

c.

members of the board of commissioners or members of the supervisory board who receive remunerations irregularly;

 

d.

Non-Permanent Employees;

 

e.

Non-Employees;

 

f.

Event Participants;

 

g.

participants of pension programmes who are of Employee status; and

 

h.

Former Employees.

(2)

The Non-Employees referred to in paragraph (1) subparagraph e, include:

 

a.

professionals who perform Independent Personal Services, consisting of lawyers, accountants, architects, doctors, consultants, notaries, appraisers, conveyancers and actuaries;

 

b.

musicians, presenters, singers, comedians, film stars, soap opera stars, commercial stars, directors, film crew, photo models, models, actors/actresses, dancers, sculptors, painters, content creators in online media (influencers, celebgrams, bloggers, vloggers and the like) and other artists;

 

c.

sportsmen;

 

d.

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

 

e.

authors, researchers and translators;

 

f.

service providers in all fields;

 

g.

advertising agents;

 

h.

project supervisors or managers;

 

i.

couriers or brokers or intermediaries;

 

j.

salespeople;

 

k.

insurance agents;

 

l.

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

(3)

Event Participants referred to in paragraph (1) subparagraph f, include:

 

a.

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

 

b.

participants in meetings, conferences, sessions, employment visits, seminars, workshops or shows or other certain activities;

 

c.

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

 

d.

students, trainees and interns;

 

 

 

 

 

Not included in income recipients subject to the Article 21 and/or Article 26 Withholding Tax in Connection with Employment, Services and Activities, 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 as stipulated under Article 3 paragraph (1) subparagraph b of the Income Tax Law, provided that:

 

1.

they are not Indonesian citizens and do not receive or accrue other income outside their position or employment; and

 

2.

the country concerned provides reciprocal treatment; and

b.

the representatives to international organisations referred to in Article 2 paragraph (3) subparagraph b provided that

 

1.

they are not Indonesian citizens and do not conduct business or other activities or employment to earn income from Indonesia; or

 

2.

specifically stipulated based on international agreements referred to in Ministerial regulations stipulating the implementation of the income tax treatment pursuant to the provisions under the international agreements.

 

 

 

 

 

CHAPTER III
INCOME SUBJECT TO ARTICLE 21 AND/OR ARTICLE 26 WITHHOLDING TAX IN CONNECTION WITH EMPLOYMENT, SERVICES AND ACTIVITIES
 

(1)

Income subject to the Article 21 and/or Article 26 Withholding Tax in Connection with Employment, Services and Activities, consists of:

 

a.

income received or accrued by Permanent Employees, either regularly or irregularly;

 

b.

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

 

c.

remunerations for members of the board of commissioners or members of the supervisory board received or accrued irregularly;

 

d.

the income of Non-Permanent Employees, that may be in the form of:

 

 

1.

daily wages;

 

 

2.

weekly wages;

 

 

3.

piece rates;

 

 

4.

lump sump payment; and

 

 

5.

wages received or accrued monthly;

 

e.

reimbursements for Non-Employees as reimbursements in connection with Independent Personal Services or services performed, that may be in the form of:

 

 

1.

honoraria;

 

 

2.

commission;

 

 

3.

fees; and

 

 

4.

similar reimbursements;

 

f.

reimbursements for Event Participants, that may be in the form of:

 

 

1.

pocket money;

 

 

2.

representation money;

 

 

3.

meeting money;

 

 

4.

honoraria;

 

 

5.

prizes or awards; and

 

 

6.

similar reimbursements;

 

g.

pension benefits or similar income partly withdrawn by participants of pension programmes who are of Employee status; and

 

h.

income or reimbursements received or accrued by Former Employees, that may be in the form of:

 

 

1.

production services;

 

 

2.

tantiem̀e;

 

 

3.

gratuities stipulated under the Income Tax Law;

 

 

4.

bonuses; and

 

 

5.

other irregular reimbursements.

(2)

The income referred to in paragraph (1) may be given in whatever name and form, including revenues in the form of in-kind and/or fringe benefits.

(3)

The income received or accrued by Permanent Employees, either regular or irregular referred to in paragraph (1) subparagraph a, may be in the form of:

 

a.

all salaries, all types of allowances and other similar income, including overtime and similar income;

 

b.

bonuses, religious holiday allowances, production services, tantiem̀e, gratuities, premiums, and other irregular income;

 

c.

remunerations in connection with the activities organised by the employer;

 

d.

payments of employment injury security contributions and death security contributions to employment social health insurance administration body, paid by the employer;

 

e.

payments of health care social security contributions to the social health insurance administration body paid by the employer; and

 

f.

payments of premiums for health insurance, work-related accident insurance, life insurance, endowment insurance and scholarship insurance, paid by the employer.

(4)

If the income referred to in paragraph (1) is received or accrued in a foreign currency, the calculation of Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities is based on the exchange rate determined by the Minister of Finance applicable upon payment of such income or when the income becomes payable, according to whichever event occurs first.

 

 

 

 

 

(1)

The income referred to in Article 5 paragraph (1) received or accrued by resident individual taxpayers constitutes income subject to Article 21 Withholding Tax.

(2)

The income referred to in Article 5 paragraph (1) received or accrued by non-resident individual taxpayers constitutes income subject to the Article 26 Withholding Tax in Connection with Employment, Services and Activities.

 

 

 

 

 

Income subject to Article 21 Withholding Tax referred to in Article 6 paragraph (1), excludes:

a.

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

b.

reimbursements or remunerations in connection with employment or services received or accrued in the form of in-kind and/or fringe benefits excluded from income tax objects referred to in statutory provisions in the field of income tax;

c.

contributions related to pension and old age programmes paid to pension funds whose establishment has been approved by the Minister or have obtained the permit from the Financial Services Authority, worker social health insurance administration body or old age security organising agencies established pursuant to statutory provisions, paid by the employer;

d.

aid, donations, zakat, infaq, sadaqah and compulsory religious donations for the followers of acknowledged religions in Indonesia received by entitled individuals, provided that there is no business or employment relationship between the parties concerned;

e.

grants received by relatives within a lineage of one degree or any individual conducting micro and small business provided that there is no business or employment relationship between the parties concerned;

f.

scholarships that fulfil certain requirements stipulated under Article 4 paragraph (3) subparagraph l of the Income Tax Law;

g.

surplus given to members of partnerships, firms or limited partnerships without share capital; and

h.

government-borne income tax.

 

 

 

 

 

CHAPTER IV
THE TAX BASE AND ARTICLE 21 AND/OR ARTICLE 26 WITHHOLDING TAX IN CONNECTION WITH EMPLOYMENT, SERVICES, OR ACTIVITIES AND DEDUCTIBLE EXPENSES
 

(1)

The tax base and Article 21 Withholding Tax for Permanent Employees and Pensioners, shall be:

 

a.

gross income in 1 (one) Taxable Period; or

 

b.

taxable income.

(2)

The gross income referred to in paragraph (1) subparagraph a is as follows:

 

a.

for Permanent Employees, includes all income referred to in Article 5 paragraph (1) subparagraph a received or accrued from the employer; and

 

b.

for Pensioners, includes all income referred to in Article 5 paragraph (1) subparagraph b.

(3)

The taxable income referred to in paragraph (1) subparagraph b amounts to net income deducted by Personal Tax Relief.

(4)

The amount of taxable income referred to in paragraph (3) shall be rounded down to full thousands.

(5)

The net income referred to in paragraph (3) is the entire amount of gross income referred to in paragraph (2) in 1 (one) Tax Year or a fraction of a Tax Year deducted by deductible expenses.

 

 

 

 

 

(1)

The amount of Personal Tax Relief referred to in Article 8 paragraph (3) is stipulated under Article 7 paragraph (1) and paragraph (3) of the Income Tax Law.

(2)

To the 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 family members related by blood and/or marriage in a lineage and adopted children constituting full dependants.

(3)

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 family members related by blood and/or marriage in a lineage and adopted children constituting full dependants.

(4)

The Personal Tax Relief referred to in paragraph (1) is determined based on the circumstances at the beginning of the calendar year.

(5)

Excluded from the provisions referred to in paragraph (4), the amount of Personal Tax Relief for employees who have just arrived and settled in Indonesia in a fraction of a calendar year is determined based on circumstances at the beginning of the month of the fraction of the calendar year concerned.

 

 

 

 

 

(1)

Deductible expenses referred to in Article 8 paragraph (5) for Permanent Employees, are:

 

a.

occupational tax relief, stipulated under Article 21 paragraph (3) of the Income Tax Law;

 

b.

contributions related to pension and old age programmes, that are related to salaries, paid by the Employees through the employer to:

 

 

1.

pension funds whose establishment has been approved by the Minister or have obtained a permit from the Financial Services Authority;

 

 

2.

employment social health insurance administration body; and

 

 

3.

old age security organising agencies established pursuant to statutory provisions; and

 

c.

zakat or compulsory religious donations for the followers of acknowledged religions in Indonesia, paid through the employer to amil zakat board, amil zakat institutions and

(2)

The amount of occupational tax relief referred to in paragraph (1) subparagraph a is set at 5% (five per cent) of gross income, a maximum of IDR6,000,000.00 (six million rupiah) a year or a maximum of IDR500,000.00 (five hundred thousand rupiah) a month.

(3)

If Permanent Employees receive or accrue income from more than one employer, the occupational tax relief referred to in paragraph (1) subparagraph a shall be calculated for each employer.

(4)

If Permanent Employees receive or accrue income from the employers not constituting Withholding Agents, the occupational tax relief referred to in paragraph (1) subparagraph a and pension contributions that are self-paid shall constitute deductible expenses for Permanent Employees in the calculation of Income Tax in the Annual Income Tax Return of the individual taxpayers concerned.

 

 

 

 

 

(1)

The deductible expenses referred to in Article 8 paragraph (5) for Pensioners, are:

 

a.

pension expenses referred to in Article 21 paragraph (3) of the Income Tax Law; and

 

b.

zakat or compulsory religious donations for the followers of acknowledged religions in Indonesia paid through periodic pension payers to the amil zakat board, amil zakat institutions and religious institutions established or approved by the government.

(2)

The amount of pension expenses referred to in paragraph (1) subparagraph a is set at 5% (five per cent) of gross income, a maximum of IDR2,400,000.00 (two million and four hundred thousand rupiah) a year or a maximum of IDR200,000.00 (two hundred thousand rupiah) a month.

(3)

If Pensioners receive or accrue income from more than one pension fund or other Entities that pay pension money, the pension expenses referred to in paragraph (1) subparagraph a are calculated for each pension fund or other Entities that pay pension money.

 

 

 

 

 

(1)

The tax base and Article 21 Withholding Tax for members of the board of commissioners or members of the supervisory board who receive remunerations irregularly shall amount to the gross income referred to in Article 5 paragraph (1) subparagraph c.

(2)

The tax base and Article 21 Withholding Tax for Non-Permanent Employees, shall be, if the gross income referred to in Article 5 paragraph (1) subparagraph d:

 

a.

is not received or accrued monthly and the amount of daily gross income is up to IDR 2,500,000.00 (two million five hundred thousand rupiah), amounts to:

 

 

1.

daily gross income if income is received or accrued daily; or

 

 

2.

average daily gross income if income is received or accrued other than daily.

 

b.

is not received or accrued monthly and the total gross income per day is more than IDR2,500,000.00 (two million five hundred thousand rupiah, amounts to 50% (fifty per cent) of the total gross income; or

 

c.

is received or accrued monthly, amounts to the total gross income.

(3)

The tax base and Article 21 Withholding Tax for Non-Employees amounts to 50% (fifty per cent) of the total gross income referred to in Article 5 paragraph (1) subparagraph e.

(4)

The total gross income for Non-Employees referred to in paragraph (3):

 

a.

for catering services is the entire amount of income in whatever name and form received or accrued by Non-Employees from Withholding Agents; or

 

b.

for services other than catering services is the total income in whatever name and form received or accrued by Non-Employees from Withholding Agents, excluding:

 

 

1.

payments of salaries, wages, honoraria, allowances and other payments as remunerations in connection with employment received or accrued by workers employed by Non-Employees;

 

 

2.

payments for the procurement or purchase of goods or materials, received or accrued by providers of goods or materials from Non-Employees, related to services provided by Non- Employees; and/or

 

 

3.

payments received or accrued by third parties from Non-Employees for the services provided by such third parties,

 

 

based on contracts or agreements with Withholding Agents, unless the contracts/agreements cannot be separated, the amount of gross income is the amount received or accrued by Non- Employees.

(5)

The payments referred to in paragraph (4) subparagraph b number 1, number 2, and number 3 are not included in the gross amount as the basis for the Withholding Tax referred to in paragraph (3) insofar as they can be proven by:

 

a.

employment contracts and list of payments of salaries, wages, honoraria, allowances and other gifts as remunerations in connection with employment referred to in paragraph (4) subparagraph b number 1;

 

b.

invoices for the procurement/purchase of goods or materials referred to in paragraph (4) subparagraph b number 2; and/or

 

c.

invoices from third parties are attached with a written agreement, including the proof of the provision of income to the third parties, referred to in paragraph (4) subparagraph b number 3.

(6)

The tax base and Article 21 Withholding Tax for Event Participants shall amount to the gross income referred to in Article 5 paragraph (1) subparagraph f paid in full and does not constitute a split amount.

(7)

The tax base and Article 21 Withholding Tax for participants of pension programmes who are of Employee status shall amount to the gross income referred to in Article 5 paragraph (1) subparagraph g.

(8)

The tax base and Article 21 Withholding Tax for Former Employees shall amount to the gross income referred to in Article 5 paragraph (1) subparagraph h.

(9)

The tax base and Article 26 Withholding Tax in Connection with Employment, Services and Activities for non-resident individual taxpayers shall amount to the gross income referred to in Article 5 paragraph (1).

 

 

 

 

 

CHAPTER V
WITHHOLDING RATES
 

(1)

Article 21 Withholding Tax rates consist of:

 

a.

Article 21 Withholding Tax rates; and

 

b.

the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law.

(2)

The Article 21 Withholding Tax rates referred to in paragraph (1) subparagraph a consist of:

 

a.

monthly effective tax rates; or

 

b.

daily effective tax rates,

 

stipulated under the government regulation stipulating Article 21 Withholding Tax rates on income in connection with employment, services and activities of individual taxpayers.

(3)

Article 21 Withholding Tax rates pursuant to the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law referred to in paragraph (1) subparagraph b are used on income from employment, services or activities of individual taxpayers.

 

 

 

 

 

(1)

The Article 26 Withholding Tax rate in Connection with Employment, Services and Activities amounts to 20% (twenty per cent) and is final or pursuant to the provisions of the applicable tax treaty between the Republic of Indonesia and the country or jurisdiction of domicile of the non-resident taxpayer.

(2)

The provisions of the tax treaty referred to in paragraph (1) shall be applied pursuant to statutory provisions stipulating procedures for the application of tax treaties.

(3)

If non-resident individual taxpayers change status to resident individual taxpayers, Article 26 Income Tax in Connection with Employment, Services and Activities which has been withheld referred to in paragraph (1) is non-final and may be credited against the Individual Income Tax payable for the Tax Year or fraction of the Tax Year concerned in the Annual Income Tax Return for Individual Taxpayers.

 

 

 

 

 

CHAPTER VI
THE CALCULATION OF ARTICLE 21 INCOME TAX AND/OR ARTICLE 26 INCOME TAX IN CONNECTION WITH EMPLOYMENT, SERVICES OR ACTIVITIES
 

(1)

Article 21 Income Tax that must be withheld for Permanent Employees referred to in Article 3 paragraph (1) subparagraph a and Pensioners referred to in Article 3 paragraph (1) subparagraph b in:

 

a.

every Taxable Period other than the Last Taxable Period is calculated using monthly effective tax rates referred to in Article 13 paragraph (2) subparagraph a multiplied by the tax base and withholding referred to in Article 8 paragraph (1) subparagraph a; and

 

b.

the Last Taxable Period is the difference between Article 21 Income Tax payable for 1 (one) Tax Year or a fraction of a Tax Year and Article 21 Income Tax which has been withheld in a Taxable Period other than the Last Taxable Period referred to in subparagraph a.

(2)

Article 21 Income Tax payable in 1 (one) Tax Year or a fraction of a Tax Year referred to in paragraph (1) subparagraph b is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 8 paragraph (1) subparagraph b in 1 (one) Tax Year or a fraction of a Tax Year.

(3)

If the subjective tax obligations of Permanent Employees and/or Pensioners commence after January or end before December, Article 21 Income Tax payable is calculated based on annualised net income and the tax is calculated proportionally to the number of months in the fraction of a Tax Year concerned.

 

 

 

 

 

(1)

Article 21 Income Tax that must be withheld for members of the board of commissioners or members of the supervisory board who receive or accrue income irregularly referred to in Article 3 paragraph (1) subparagraph c shall amount to monthly effective tax rates referred to in Article 13 paragraph (2) subparagraph a multiplied by the tax base and withholding referred to in Article 12 paragraph (1).

(2)

Article 21 Income Tax that must be withheld for Non-Permanent Employees referred to in Article 3 paragraph (1) subparagraph d is calculated using:

 

a.

the daily effective tax rates referred to in Article 13 paragraph (2) subparagraph b multiplied by the tax base and withholding referred to in Article 12 paragraph (2) subparagraph a;

 

b.

the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 12 paragraph (2) subparagraph b; or

 

c.

the monthly effective tax rates referred to in Article 13 paragraph (2) subparagraph a multiplied by the tax base and withholding referred to in Article 12 paragraph (2) subparagraph c.

(3)

Article 21 Income Tax that must be withheld for Non-Employees referred to in Article 3 paragraph (1) subparagraph e is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 12 paragraph (3).

(4)

Article 21 Income Tax that must be withheld for Event Participants referred to in Article 3 paragraph (1) subparagraph f is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 12 paragraph (6).

(5)

Article 21 Income Tax that must be withheld for participants of pension programmes who are of Employee status referred to in Article 3 paragraph (1) subparagraph g is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 12 paragraph (7).

(6)

Article 21 Income Tax that must be withheld for Former Employees referred to in Article 3 paragraph (1) subparagraph h is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 12 paragraph (8).

(7)

Article 26 Income Tax that must be withheld for non-resident individual taxpayers is calculated using the Article 26 Withholding Tax rate in Connection with Employment, Services and Activities referred to in Article 14 paragraph (1) multiplied by the tax base and withholding referred to in Article 12 paragraph (9).

 

 

 

 

 

CHAPTER VII
INCOME AND ARTICLE 21 WITHHOLDING TAX ON STATE OFFICIALS, PNS, TNI MEMBERS, POLRI MEMBERS AND THE PENSIONERS
 

(1)

Daily fixed and regular income borne by the APBN or APBD includes fixed and regular income for:

 

a.

State Officials, for:

 

 

1.

monthly fixed and regular salaries and other allowances; or

 

 

2.

other fixed remunerations, stipulated pursuant to statutory provisions;

 

b.

PNS, TNI Members and POLRI Members, for monthly fixed and regular salaries and other allowances stipulated pursuant to statutory provisions; and

 

c.

Pensioners, for pensions and other monthly fixed and regular allowances stipulated pursuant to statutory provisions.

(2)

The tax base of Article 21 Income Tax on fixed and regular income referred to in paragraph (1), is:

 

a.

gross income in 1 (one) Taxable Period; or

 

b.

taxable income.

(3)

The gross income referred to in paragraph (2) subparagraph a is all fixed and regular income received or accrued by State Officials, PNS, TNI Members, POLRI Members and the Pensioners.

(4)

The taxable income referred to in paragraph (2) subparagraph b is determined based on net income deducted by Personal Tax Relief.

(5)

(6)

The net income referred to in paragraph (4) for State Officials, PNS, TNI Members or POLRI Members is determined based on the total gross income referred to in paragraph (3) in 1 (one) Tax Year deducted by:

 

a.

occupational tax relief referred to in Article 10 paragraph (2);

 

b.

contributions related to pension and old age programmes, which are related to salaries, paid by State Officials, PNS, TNI Members or POLRI Members through the employers to:

 

 

1.

pension funds whose establishment has been approved by the Minister or have obtained a permit from the Financial Services Authority;

 

 

2.

employment social health insurance administration body; and

 

 

3.

old age benefit organising agencies whose establishment is stipulated pursuant to statutory provisions; and

 

c.

zakat or compulsory religious donations for the followers of acknowledged religions in Indonesia, paid through the employer to amil zakat board, amil zakat institutions and religious institutions established or approved by the government.

(7)

The amount of the net income referred to in paragraph (4) for Pensioners is determined based on all fixed and regular income deducted by:

 

a.

the pension expenses referred to in Article 11 paragraph (2); and

 

b.

zakat or compulsory religious donations for the followers of acknowledged religions in Indonesia paid through periodic pension payers to the amil zakat board, amil zakat institutions and religious institutions established or approved by the government

 

 

 

 

 

(1)

The calculation of Article 21 Income Tax that must be withheld for State Officials, PNS, TNI Members, POLRI Members and the Pensioners in:

 

a.

every Taxable Period other than the Last Taxable Period is calculated using monthly effective tax rates referred to in Article 13 paragraph (2) subparagraph a multiplied by the tax base and withholding referred to in Article 17 paragraph (1) subparagraph a; and

 

b.

the Last Taxable Period is the difference between Article 21 Income Tax payable for 1 (one) Tax Year or a fraction of a Tax Year and Article 21 Income Tax which has been withheld in a Taxable Period other than the Last Taxable Period referred to in subparagraph a.

(2)

Article 21 Income Tax payable for 1 (one) Tax Year or a fraction of a Tax Year referred to in paragraph (1) subparagraph b is calculated using the rates under Article 17 paragraph (1) subparagraph a of the Income Tax Law multiplied by the tax base and withholding referred to in Article 17 paragraph (2) subparagraph b in 1 (one) Tax Year or a fraction of a Tax Year.

(3)

If the subjective tax obligations of State Officials, PNS, TNI Members, POLRI Members or Pensioners commence after January or end before December, Article 21 Income Tax payable is calculated based on annualised net income and the tax is calculated proportionally to the number of months in the fraction of a Tax Year concerned.

(4)

If State Officials, PNS, TNI Members, POLRI Members or Pensioners receive income from 2 (two) employers and Article 21 Income Tax on all income is borne by the government, Article 21 Income Tax in the Last Taxable Period is calculated by other than the Employer that pays the basic salary must take into account the total of all fixed and regular income received or accrued by State Officials, PNS, TNI Members, POLRI Members or Pensioners, including income in the calculation of Article 21 Income Tax for the employer that pays the basic salary.

(5)

The calculation referred to in paragraph (4) is performed if:

 

a.

the employer that pays the basic salary has issued the withholding receipt of Article 21 Income Tax to be calculated using the withholding receipts of Article 21 Income Tax of other employers;

 

b.

the income recipient submits the withholding receipt referred to in subparagraph a to the other employers; and

 

c.

the income recipient prepares a statement letter stating the list of employers and the intent of other employers to take into account income from the employer referred to in subparagraph a.

(6)

The statement letter referred to in paragraph (5) subparagraph c shall be prepared as per the sample format listed in Appendix letter A which constitutes an integral part of this Ministerial Regulation.

 

 

 

 

 

CHAPTER VIII
WHEN TAX BECOMES PAYABLE AND PROCEDURES FOR THE ARTICLE 21 AND/OR ARTICLE 26 WITHHOLDING TAX IN CONNECTION WITH EMPLOYMENT, SERVICES AND ACTIVITIES
 

(1)

Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities shall become payable for the income recipient when:

 

a.

the income concerned is paid or becomes payable, according to whichever event occurs first;

 

b.

the income concerned is transferred or becomes payable, according to whichever event occurs first for reimbursements or remunerations in the form of in-kind; or

 

c.

the rights or part of the rights to use a facility and/or service is transferred by the provider for reimbursement or remuneration in the form of fringe benefits.

(2)

Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities shall be withheld by Withholding Agents for every Taxable Period.

(3)

The withholding for every Taxable Period referred to in paragraph (2) shall be performed no later than the end of the month when the tax becomes payable referred to in paragraph (1).

(4)

The reimbursements or remunerations in the form of in-kind and/or fringe benefits shall be withheld pursuant to the provisions under the Ministerial regulation stipulating the income tax treatment of reimbursements or remunerations in connection with employment or services received or accrued in the form of in-kind and/or fringe benefits.

 

 

 

 

 

(1)

Withholding Agents must:

 

a.

calculate, withhold, remit and file Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities payable for each Taxable Period;

 

b.

prepare the withholding receipt of Article 21 Income Tax and/or Article 26 Income Tax and provide the withholding receipt to the income recipients subject to the withholding tax;

 

c.

prepare records or working paper for the calculation of Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities for each income recipient; and

 

d.

retain records or working papers for the calculation referred to in subparagraph c pursuant to statutory provisions.

(2)

The records or working paper for the calculation of Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities for each income recipient referred to in paragraph (1) subparagraph c shall constitute the basis for the filing of Article 21 Income Tax and /or Article 26 Income Tax in Connection with Employment, Services and Activities payable for each Taxable Period.

(3)

The provisions on the obligations referred to in paragraph (1) remain valid if there is income provided, including if the tax withheld in the relevant month amounts to nil.

(4)

If there is no provision of income in connection with employment, services and activities of individuals in the relevant month, the provisions on the obligations referred to in paragraph (1) do not apply.

(5)

The format of the withholding receipt form of Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities referred to in paragraph (1) subparagraph b is determined by the Director General of Taxes.

 

 

 

 

 

(1)

If the amount of Article 21 Income Tax that has been withheld in a Taxable Period other than the Last Taxable Period in the relevant Tax Year is greater than Article 21 Income Tax payable in 1 (one) Tax Year or a fraction of a Tax Year, the overpayment of the Article 21 Income Tax that has been withheld must be refunded by the Withholding Agents to the Permanent Employees and Pensioners concerned as well as providing the withholding receipt of Article 21 Income Tax, no later than the end of the following month after the Last Taxable Period.

(2)

Not included in the refunded Article 21 Income Tax referred to in paragraph (1), is government-borne Article 21 Income Tax.

(3)

If in a Taxable Period, there is an over-remittance of tax payable by Withholding Agents, the over- remittance may be set off against Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities payable in the following month via Periodic Tax Returns.

(4)

If there is a tax over-remittance in the amendment of Periodic Tax Returns, the overpayment may be set off against Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities payable in the following months, without having to be consecutive.

 

 

 

 

 

(1)

Income recipients are entitled to receive the withholding receipt from Withholding Agents.

(2)

Income recipients are entitled to receive refunds of the overpayment of Article 21 Income Tax which has been withheld referred to in Article 21 paragraph (1), except for government-borne Article 21 Income Tax.

(3)

The amount of withheld Article 21 Income Tax, other than final Article 21 Income Tax, constitutes a tax credit for income recipients for the Tax Year or a fraction of a Tax Year the income becomes payable.

(4)

Income recipients must file all income that has been received or accrued, whether that that has been subject to withholding tax or not subject to withholding tax, which is final or non-final and not constituting income tax objects, in the Annual Income Tax Return for Individual Taxpayers.

 

 

 

 

 

Procedures for the calculation of Article 21 Income Tax and/or Article 26 Income Tax in Connection with Employment, Services and Activities shall comply with the general instructions and samples listed in Appendix letter B and letter C which constitute an integral part of this Ministerial Regulation.

 

 

 

 

 

CHAPTER IX
CLOSING PROVISIONS
 

When this Ministerial Regulation comes into force:

a.

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;

b.

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

c.

Minister of Finance Regulation Number 102/PMK.010/2016 concerning the Determination of 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 (Official Gazette of the Republic of Indonesia of 2016 Number 951); and

d.

Article 5, Article 8, Section One number I and Section Two number I of the Appendix of the Minister of Finance Regulation Number 262/PMK.03/2010 concerning Procedures for Article 21 Withholding Tax for State Officials, PNS, TNI Members, POLRI Members and the Pensioners on Income Borne by the State Budget or Local Government Budget (Official Gazette of the Republic of Indonesia of 2010 Number 601),

are revoked and declared invalid.

 

 

 

 

 

This Ministerial Regulation shall come into force on 1 January 2024.

 

 

 

 

 

For public cognisance, this Ministerial Regulation shall be promulgated by placement in the Official Gazette of the Republic of Indonesia.

 

 

 

 

 

Enacted in Jakarta
on 29 December 2023
MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,
signed
SRI MULYANI INDRAWATI

Promulgated in Jakarta

on 29 December 2023
DIRECTOR GENERAL OF LEGISLATION  

MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,
signed
ASEP N. MULYANA

OFFICIAL GAZETTE OF THE REPUBLIC OF INDONESIA OF 2023 NUMBER1112