that to implement the provisions under Article 111 and Article 185 letter b of Law Number 11 of 2020 concerning Job Creation, it is necessary to enact a Government Regulation concerning the Tax Treatment to Support Ease of Doing Business;

 

 

 

 

 

1.

Article 5 paragraph (2) of the 1945 Constitution of the Republic of Indonesia;

2.

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 concerning the Stipulation of Government Regulation in Lieu of Law Number 5 of 2008 concerning the Fourth Amendment to Law Number 6 of 1983 concerning General Provisions and Tax Procedures into a Law (State Gazette of the Republic of Indonesia of 2009 Number 62, Supplement to the State Gazette of the Republic of Indonesia Number 4999);

3.

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 36 of 2008 concerning the Fourth Amendment to Law Number 7 of 1983 concerning Income Tax (State Gazette of the Republic of Indonesia of 2008 Number 133, Supplement to the State Gazette of the Republic of Indonesia Number 4893);

4.

Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 1983 Number 51, Supplement to the State Gazette of the Republic of Indonesia Number 3264) as amended several times, last amended by Law Number 42 of 2009 concerning the Third Amendment to Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 2009 Number 150, Supplement to the State Gazette of the Republic of Indonesia Number 5069);

5.

Law Number 11 of 2020 concerning Job Creation (State Gazette of the Republic of Indonesia of 2020 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6573);

6.

Government Regulation Number 16 of 2009 concerning Income Tax on Income in the Form of Bond Interest (State Gazette of the Republic of Indonesia of 2009 Number 33, Supplement to the State Gazette of the Republic of Indonesia Number 4982) as amended several times, last amended by Government Regulation Number 55 of 2019 concerning the Second Amendment to Government Regulation Number 16 of 2009 concerning Income Tax on Income in the Form of Bond Interest (State Gazette of the Republic of Indonesia of 2019 Number 147, Supplement to the State Gazette of the Republic of Indonesia Number 6373);

7.

Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2010 Number 161, Supplement to the State Gazette of the Republic of Indonesia Number 5183) as amended by Government Regulation Number 45 of 2019 concerning the Amendment to Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2019 Number 119, Supplement to the State Gazette of the Republic of Indonesia Number 6361);

8.

Government Regulation Number 74 of 2011 concerning Procedures for the Exercise of Tax Rights and Fulfilment of Tax Obligations (State Gazette of the Republic of Indonesia of 2011 Number 162, Supplement to the State Gazette of the Republic of Indonesia Number 5268);

9.

Government Regulation Number 1 of 2012 concerning the Implementation of Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 42 of 2009 concerning the Third Amendment to Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 2012 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 5271);

 

 

 

 

 

GOVERNMENT REGULATION CONCERNING THE TAX TREATMENT TO SUPPORT EASE OF DOING BUSINESS.

 

 

 

 

 

 

Referred to herein this Government Regulation:

1.

Job Creation Law is Law Number 11 of 2020 concerning Job Creation.

2.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

3.

General Provisions and Tax Procedures Law is Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

4.

Value Added Tax Law is Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

5.

Bonds are debentures, government securities and local government bonds with a maturity of more than 12 (twelve) months issued by the government and non-government, including securities issued based on sharia principles (sharia bonds).

6.

Bond Interest is the remuneration received or accrued by Bondholders in the form of interest, ujrah/fees, profit sharing, margin, other similar income and/or discounts.

 

 

 

 

 

The tax treatment to support ease of doing business under this Government Regulation covers the fields of Income Tax, Value Added Tax and General Provisions and Tax Procedures.

 

 

 

 

 

 

(1)

Interest income, including premiums, discounts and remuneration in connection with compensation for loan repayment guarantee received or accrued by non-resident Taxpayers other than permanent establishments shall be subject to  Withholding Tax of 20% (twenty per cent) as referred to in Article 26 of the Income Tax Law.

(2)

The withholding rate of 20% (twenty per cent) referred to in paragraph (1) may be reduced as referred to in Article 26 paragraph (1b) of the Income Tax Law.

(3)

The withholding tax rate referred to in paragraph (2) is reduced to 10% (ten per cent) or according to the rate based on the tax treaty.

(4)

Interest income referred to in paragraph (1) given a rate reduction referred to in paragraph (3) is income from Bond Interest received or accrued by non-resident Taxpayers other than permanent establishments.

(5)

Bond Interest referred to in paragraph (4) includes:

 

a.

interest from interest-bearing Bonds amounting to the gross amount of interest according to the holding period of the Bonds;

 

b.

discounts from interest-bearing Bonds amounting to the difference between the selling price or the nominal value and the acquisition price of the Bonds, excluding accrued interest; and

 

c.

discounts from zero-coupon bonds in the amount of the difference between the selling price or the nominal value and the acquisition price of the Bonds.

(6)

Income Tax referred to in paragraph (3) is withheld by:

 

a.

the Bond issuer or custodian as the appointed payment agent, for the interest and/or discount received by the interest-bearing Bonds holders at the maturity date of the Bond Interest and discounts received by the zero-coupon Bonds holders at the maturity date of the Bonds; and/or

 

b.

the securities company, dealer or bank, acting as brokers and/or buyers, for the interest and discount received by the seller of the Bonds during the transaction.

(7)

Provisions on Bond Interest on Bonds issued based on sharia principles apply mutatis mutandis to the provisions under this Government Regulation.

(8)

The Article 26 Income Tax rate of the Income Tax Law referred to in paragraph (3) comes into force after 6 (six) months from the enactment of this Government Regulation.

 

 

 

 

 

 

Several provisions under Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2010 Number 161, Supplement to the State Gazette of the Republic of Indonesia Number 5183) as amended by Government Regulation Number 45 of 2019 concerning the Amendment to Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year (State Gazette of the Republic of Indonesia of 2019 Number 119, Supplement to the State Gazette of the Republic of Indonesia Number 6361) are amended as follows:

 

 

 

 

 

1.

The provisions of Article 1 are amended, thereby, it reads as follows:

 

 

 

 

 

 

 

Referred to herein this Government Regulation:

 

1.

General Provisions and Tax Procedures Law is Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

2.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

3.

Value Added Tax Law is Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

 

 

 

 

2.

Between Article 2 and Article 3, 1 (one) article is inserted, namely Article 2A, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

The exclusion of income in the form of dividends or other income from Income Tax objects referred to in Article 4 paragraph (3) subparagraph f of the Income Tax Law applies to dividends or other income received or accrued by resident individual and corporate Taxpayers since the promulgation of Law Number 11 of 2020 concerning Job Creation.

 

(2)

Dividends that are excluded from Income Tax objects referred to in paragraph (1) are dividends distributed based on a general meeting of shareholders or interim dividends pursuant to statutory provisions.

 

(3)

The general meeting of shareholders or interim dividends referred to in paragraph (2) includes similar meetings and similar mechanisms for the distribution of dividends.

 

(4)

Other income referred to in paragraph (1) is income after tax of a permanent establishment overseas and active foreign-sourced income not through a permanent establishment.

 

(5)

Domestically-sourced dividends received or accrued by resident individual Taxpayers or resident corporate taxpayers referred to in Article 4 paragraph (3) subparagraph f number 1 of the Income Tax Law, are not subject to Withholding Tax.

 

(6)

If a resident individual Taxpayer does not fulfil the provisions on investments referred to in Article 4 paragraph (3) subparagraph f number 1 point a) of the Income Tax Law, domestically-sourced dividends received or accrued by resident individual Taxpayers are subject to Income Tax payable when the dividends are received or accrued.

 

(7)

Income Tax payable referred to in paragraph (6) must be self-remitted by resident individual Taxpayers.

 

(8)

Further provisions on procedures for the self-remittance by individual Taxpayers referred to in paragraph (7) are stipulated in a Minister of Finance Regulation.

 

 

 

 

 

 

Several provisions under Government Regulation Number 1 of 2012 concerning the Implementation of Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 42 of 2009 concerning the Third Amendment to Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (State Gazette of the Republic of Indonesia of 2012 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 5271) are amended as follows:

 

 

 

 

 

1.

The provisions of number 1 of Article 1 are amended and between number 1 and number 2 of Article 1, 5 (five) numbers are inserted, namely number 1a, number 1b, number 1c, number 1d and number 1e, thereby, Article 1 reads as follows:

 

 

 

 

 

 

 

Referred to herein this Government Regulation:

 

1.

Value Added Tax Law is Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

1a.

Income Tax Law is Law Number 7 of 1983 concerning Income Tax as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

1b.

General Provisions and Tax Procedures Law is Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

1c.

Customs Territory is the territory of the Republic of Indonesia which includes land, waters and airspace above it as well as certain places in the Exclusive Economic Zone and the continental shelf in which the Law stipulating customs is applicable.

 

1d.

Taxable Goods are goods subject to tax pursuant to the Value Added Tax Law.

 

1e.

Taxable Services are services subject to tax pursuant to the Value Added Tax Law.

 

2.

Entrepreneur is any individual or entity in whatever form that in the course of business or work produces goods, imports goods, exports goods, conducts trading business, utilises intangible goods from outside the Customs Territory, conducts service business, including exporting services or utilises services from outside the Customs Territory.

 

3.

Taxable Persons are Entrepreneurs supplying Taxable Goods and/or supplying Taxable Services subject to tax pursuant to the Value Added Tax Law.

 

4.

Selling Price is the value in money, including all costs requested or should be requested by the seller due to a supply of Taxable Goods, excluding Value Added Tax collected pursuant to the Value Added Tax Law and discounts included in the Tax Invoice.

 

5.

Consideration is the value in money, including all costs charged or which should be charged by an Entrepreneur due to supplies of Taxable Services, exports of Taxable Services or exports of Intangible Taxable Goods but excluding Value Added Tax that is collected pursuant to the Value Added Tax Law and price discounts listed in the Tax Invoice or the value in money that is paid or should be paid by the service recipient due to utilisation of Taxable Services and/or by the beneficiary of Intangible Taxable Goods due to utilisation of Intangible Taxable Goods from outside the Customs Territory within the Customs Territory.

 

6.

Tax Invoice is a tax collection receipt prepared by Taxable Persons supplying Taxable Goods or supplying Taxable Services.

 

7.

Input VAT is Value Added Tax that should have been paid by a Taxable Person due to an acquisition of Taxable Goods and/or acquisition of Taxable Services and/or utilisation of Taxable Goods from outside the Customs Territory and/or utilisation of Taxable Services from outside the Customs Territory and/or an import of Taxable Goods.

 

 

 

 

 

2.

Between Article 5 and Article 6, 1 (one) article is inserted, namely Article 5A, thereby, it reads as follows:

 

 

 

 

 

 

 

The transfer of Taxable Goods for paid-up capital referred to in Article 1A paragraph (2) subparagraph d of the Value Added Tax Law includes the transfer of Taxable Goods for paid-up capital to entities referred to in Value Added Tax Law.

 

 

 

 

 

3.

The provisions of Article 16 are deleted.

 

 

 

 

 

4.

The provisions of paragraph (1), paragraph (2), paragraph (3), paragraph (6) and paragraph (7) of Article 17 are amended and the elucidation of paragraph (5) of Article 17 is amended as listed in the elucidation of article by article, thereby, Article 17 reads as follows:

 

 

 

 

 

 

 

(1)

Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods become payable upon:

 

 

a.

a supply of Taxable Goods within the Customs Territory;

 

 

b.

an import of Taxable Goods;

 

 

c.

a supply of Taxable Services within the Customs Territory;

 

 

d.

utilisation of Intangible Taxable Goods from outside the Customs Territory within the Customs Territory;

 

 

e.

utilisation of Taxable Services from outside the Customs Territory within the Customs Territory

 

 

f.

an export of Tangible Taxable Goods;

 

 

g.

an export of Intangible Taxable Goods; or

 

 

h.

an export of Taxable Services.

 

(2)

If payment is received before a supply of Taxable Goods or before a supply of Taxable Services or if payment is performed before the start of utilisation of Intangible Taxable Goods or Taxable Services from outside the Customs Territory within the Customs Territory, the time of supply is at the time of payment.

 

(3)

Supplies of Taxable Goods referred to in paragraph (1) subparagraph a for:

 

 

a.

supplies of Tangible Taxable Goods that, according to their nature or law, are in the form of movable property other than supplies by the owner of the goods or referred to as the consignor to the recipient of the goods or referred to as the consignee on a consignment basis, occur when:

 

 

 

1.

the Tangible Taxable Goods are supplied directly to buyers or third parties for and on behalf of the buyers;

 

 

 

2.

the Tangible Taxable Goods are supplied directly to the consignee for free-of-charge provision, personal use and supplies from the head office to branches or vice versa and/or supplies between branches;

 

 

 

3.

the Tangible Taxable Goods are supplied to the forwarder or freight forwarder; or

 

 

 

4.

the price for the supplies of Tangible Taxable Goods is recognised as a receivable or income or when an invoice is issued by the Taxable Person, according to generally applicable and consistently applied accounting principles;

 

 

b.

supplies of Tangible Taxable Goods that, according to their nature or law, are in the form of immovable property occur upon the supplies of the right to use or control the said Tangible Taxable Goods, legally or actually, to the buying party;

 

 

c.

supplies of Intangible Taxable Goods, occur when:

 

 

 

1.

the price for the supplies of Tangible Taxable Goods is recognised as a receivable or income or when an invoice is issued by the Taxable Person, according to generally applicable and consistently applied accounting principles; or

 

 

 

2.

the contract or agreement is signed or when the facility or convenience is actually used, in part or in whole if the times referred to in number 1 are not known;

 

 

d.

Taxable Goods in the form of inventories and/or assets that, according to their original purpose, are not for sale, remaining when the company is dissolved, namely the earliest of:

 

 

 

1.

the deed of dissolution is signed by a notary;

 

 

 

2.

the period of establishment of the company stipulated in the articles of association ends;

 

 

 

3.

the date of the court decision declaring that the company is dissolved; or

 

 

 

4.

it is known that the company in fact no longer conducts business or has been dissolved, based on audit findings or existing data or documents;

 

 

 

and

 

 

e.

the transfer of Taxable Goods in the context of a merger, consolidation, spin-off, split-off and acquisition as well as the transfer of Taxable Goods for paid-up capital referred to in Article 5A, that does not fulfil the provisions under Article 1A paragraph (2) subparagraph d of the Value Added Tax Law or change of form of business, occurs when:

 

 

 

1.

a merger, consolidation, spin-off, split-off, acquisition or change of business form is agreed or stipulated according to the results of the general meeting of shareholders stated in the merger, consolidation, spin-off, split-off, acquisition or change of business form agreement;

 

 

 

2.

the deed concerning the merger, consolidation, spin-off, split-off or acquisition or change of business form is signed by a notary;

 

 

 

3.

the transfer of Taxable Goods for paid-up capital referred to in Article 5A is agreed or stipulated as stated in the transfer of Taxable Goods for paid-up capital agreement; or

 

 

 

4.

the deed concerning the transfer of Taxable Goods for paid-up capital referred to in Article 5A is signed by a notary.

 

(4)

The import of Taxable Goods referred to in paragraph (1) subparagraph b occurs when the Taxable Goods are admitted into the Customs Territory.

 

(5)

A supply of Taxable Services referred to in paragraph (1) subparagraph c occurs when:

 

 

a.

the price for the supply of Tangible Taxable Goods is recognised as a receivable or income or when an invoice is issued by the Taxable Person, according to generally applicable and consistently applied accounting principles;

 

 

b.

the contract or agreement is signed if the time referred to in subparagraph a is unknown; or

 

 

c.

the facilities or conveniences are available for actual use, either partially or completely, in the event of free-of-charge provision or personal use of Taxable Services.

 

(6)

Utilisation of Intangible Taxable Goods and/or Taxable Services from outside the Customs Territory within the Customs Territory referred to in paragraph (1) subparagraph d and subparagraph e, occurs at the earliest of:

 

 

a.

the acquisition price of Intangible Taxable Goods and/or Taxable Services is stated as a liability by the utlising party;

 

 

b.

the Consideration for the Intangible Taxable Goods and/or Taxable Services is collected by the supplying party; or

 

 

c.

the acquisition price of Intangible Taxable Goods and/or Taxable Services is paid, either in part or in whole, by the utilising party.

 

(7)

Utilisation of Intangible Taxable Goods and/or Taxable Services from outside the Customs Territory within the Customs Territory occurs on the date the contract or agreement is signed if the time of utilisation of Intangible Taxable Goods and/or Taxable Services from outside the Customs Territory within the Customs Territory referred to in paragraph (6) is unknown.

 

(8)

The export of Tangible Taxable Goods referred to in paragraph (1) subparagraph f occurs when the Taxable Goods are released from the Customs Territory.

 

(9)

The export of Intangible Taxable Goods referred to in paragraph (1) subparagraph g occurs when the Consideration for the exported Intangible Taxable Goods is recorded or recognised as a receivable or income.

 

(10)

The export of taxable services referred to in paragraph (1) subparagraph h occurs when the Consideration for the exported services is recorded or recognised as a receivable or income.

 

 

 

 

 

5.

Between Article 17 and Article 18, 1 (one) article is inserted, namely Article 17A, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

Supplies of Taxable Goods referred to in Article 17 paragraph (1) subparagraph a for supplies of Tangible Taxable Goods that according to their nature or law are movable property carried out on a consignment basis, for the consignor, occurs when the price for the supplies of Taxable Goods Tax is recognised as a receivable or income or when an invoice is issued by the consignor Taxable Person, according to generally accepted and consistently applied accounting principles.

 

(2)

Supplies of Taxable Goods referred to in Article 17 paragraph (1) subparagraph a for supplies of Tangible Taxable Goods that, according to their nature or law are movable property carried out on a consignment basis, for the consignee, occurs when:

 

 

a.

the Tangible Taxable Goods are supplied directly to buyers or third parties for and on behalf of the buyers;

 

 

b.

the Tangible Taxable Goods are supplied directly to the consignee for free-of-charge provision, personal use and supplies from the head office to branches or vice versa and/or supplies between branches;

 

 

c.

the Tangible Taxable Goods are supplied to the forwarder or the freight forwarder; or

 

 

d.

the price for the supplies of Tangible Taxable Goods is recognised as a receivable or income or when an invoice is issued by the Taxable Person, according to generally applicable and consistently applied accounting principles.

 

 

 

 

 

6.

The provisions of paragraph (1), paragraph (3), paragraph (4) and paragraph (5) of Article 19 are amended and paragraph (2) of Article 19 is deleted, thereby, Article 19 reads as follows:

 

 

 

 

 

 

 

(1)

Tax Invoices must be prepared by Taxable Persons upon a supply of or export of Taxable Goods and/or Taxable Services pursuant to the provisions stipulated under Article 17 paragraph (3), paragraph (5), paragraph (8), paragraph (9) and paragraph (10) as well as Article 17A.

 

(2)

Deleted.

 

(3)

Tax Invoices prepared by Taxable Persons after a period of 3 (three) months from the time the Tax Invoices should be prepared shall not be treated as Tax Invoices.

 

(4)

Taxable Persons that prepare Tax Invoices referred to in paragraph (3) are deemed not to prepare Tax Invoices.

 

(5)

The Value Added Tax listed in the Tax Invoice referred to in paragraph (3) constitutes non-creditable Input VAT.

 

 

 

 

 

7.

Between Article 19 and Article 20, 1 (one) article is inserted, namely Article 19A, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

The Tax Invoice referred to in Article 19 paragraph (1) must contain information on the supply of Taxable Goods and/or supply of Taxable Services.

 

(2)

The information referred to in paragraph (1) at least contains:

 

 

a.

the name, address and Identification Number of the Taxpayer supplying the Taxable Goods or Taxable Services;

 

 

b.

the identity of the buyer of Taxable Goods or the recipient of Taxable Services which includes:

 

 

 

1.

the name, address and Taxpayer Identification Number, for resident corporate Taxpayers and government agencies;

 

 

 

2.

the name, address and Taxpayer Identification Number or national identification number, for resident individual tax subjects pursuant to statutory provisions;

 

 

 

3.

the name, address and passport number, for non-resident individual tax subjects; or

 

 

 

4.

the name and address, for non-resident corporate tax subjects or non-tax subjects referred to in Article 3 of the Income Tax Law;

 

 

c.

the types of goods or services, the amount of the Selling Price or Consideration and discount;

 

 

d.

collected Value Added Tax;

 

 

e.

collected Sales Tax on Luxury Goods;

 

 

f.

the code, serial number and date of preparation of the Tax Invoice; and

 

 

g.

the name and signature of the party entitled to sign the Tax Invoice.

(3)

The national identification number referred to in paragraph (2) subparagraph b number 2 has the same status as the Taxpayer Identification Number in the context of the preparation of a Tax Invoice and Input VAT crediting.

(4)

Tax Invoices prepared by including the identity of the buyer of Taxable Goods or the recipient of Taxable Services in the form of the name, address and national identification number for resident individual tax subjects pursuant to statutory provisions are Tax Invoices that fulfil the provisions under Article 13 paragraph (5) subparagraph b number 1 of the Value Added Tax Law.

(5)

The Value Added Tax listed in the Tax Invoice referred to in paragraph (4) constitutes Input VAT which can be credited by the buyer of Taxable Goods or recipient of Taxable Services Taxable Person insofar as the provisions on Input VAT crediting pursuant to statutory provisions in the field of taxation are fulfilled.

 

 

 

 

 

8.

The provisions of paragraph (1) of Article 20 are amended, paragraph (2) and paragraph (3) of Article 20 are deleted, and 1 (one) paragraph is added to Article 20, namely paragraph (4), thereby, Article 20 reads as follows:

 

 

 

 

 

 

 

(1)

Taxable Persons supplying Taxable Goods and/or Taxable Services to buyers of Taxable Goods and/or recipients of Taxable Services with end consumer characteristics, including those performed through Electronic Commerce, constitute retailer Taxable Persons.

 

(2)

Deleted.

 

(3)

Deleted.

 

(4)

Further provisions on procedures for the collection, remitance and filing Value Added Tax, by Taxable Persons supplying Taxable Goods and/or Taxable Services to buyers of Taxable Goods and/or recipients of Taxable Services with end consumer characteristics referred to in paragraph (1) through third parties and the appointment of third parties as Value Added Tax Withholding Agent are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

 

Several provisions under Government Regulation Number 74 of 2011 concerning Procedures for the Exercise of Tax Rights and Fulfilment of Tax Obligations (State Gazette of the Republic of Indonesia of 2011 Number 162, Supplement to the State Gazette of the Republic of Indonesia Number 5268) are amended as follows:

 

 

 

 

 

1.

The provisions of number 1 of Article 1 are amended, thereby, Article 1 reads as follows:

 

 

 

 

 

 

 

Referred to herein this Government Regulation:

 

1.

General Provisions and Tax Procedures Law is Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation.

 

2.

Taxpayer is any individual or entity, comprising a taxpayer and a withholding agent having tax rights and obligations pursuant to statutory provisions in the field of taxation.

 

3.

Examination is a series of activities carried out to assess the completeness of the completion of Tax Returns and the attachments thereto, including an assessment of the correctness of the writing and calculation.

 

4.

Verification is a series of assessments of the fulfilment of subjective and objective obligations or tax calculation and payment, based on a Taxpayer’s application or tax data and information held or obtained by the Director General of Taxes, in the context of issuing notices of tax assessment, issuing/deregistering Taxpayer Identification Numbers and/or registering/deregistering Taxable Persons.

 

5.

Verification Closing Conference is a discussion between the Taxpayer and the Verification officers on the Verification results outlined in the Official Report of Verification Closing Conference signed by both parties and contains corrections, either approved or not approved.

 

6.

Audit is a series of activities to collect and process data, information and/or evidence conducted in an objective and professional manner based on auditing standards to assess tax compliance in fulfilling tax obligations and/or for other purposes to implement statutory provisions in the field of taxation.

 

7.

Closing Conference is a discussion between a Taxpayer and tax auditors on audit findings, the results of which are stated in the Official Report of Closing Conference, which are signed by both parties and contain corrections to the principal tax payable, either approved or disapproved.

 

8.

Preliminary Audit is an Audit conducted to find preliminary evidence of whether an alleged tax crime has occurred.

 

9.

Tax Crime Investigation is a series of activities conducted by an investigator to find and collect evidence to uncover a tax crime and find the suspect.

 

10.

Tax Treaty, hereinafter referred to as P3B, is an agreement between the Government of Indonesia and the government of a treaty partner or partner jurisdiction to prevent double taxation and tax evasion.

 

11.

Mutual Agreement Procedure, hereinafter referred to as MAP, is an administrative procedure regulated in a Tax Treaty to resolve issues arising in the application of the Tax Treaty.

 

12.

Mutual Agreement is the results agreed upon in the application of a Tax Treaty by the competent authority of the Government of Indonesia and the government of a Tax Treaty partner or jurisdiction in connection with the implemented MAP.

 

13.

Advance Pricing Agreement, hereinafter referred to as APA, is a written agreement between:

 

 

a.

the Director General of Taxes and a Taxpayer; or

 

 

b.

the Director General of Taxes and the tax authorities of a Tax Treaty partner or partner jurisdiction involving a Taxpayer,

 

 

referred to in Article 18 paragraph (3a) of the Income Tax Law to agree on the criteria and/or to determine the arm’s length price or advance arm’s length profit.

 

 

 

 

 

2.

The provisions of paragraph (1), paragraph (2) and paragraph (5) of Article 7 are amended, between paragraph (2) and paragraph (3) of Article 7, 1 (one) paragraph is inserted, namely paragraph (2a) and the elucidation of paragraph (3) of Article 7 is amended as listed in the elucidation of article by article, thereby, Article 7 reads as follows:

 

 

 

 

 

 

 

(1)

Taxpayers may voluntarily disclose using a written statement the untruth of their actions, if:

 

 

a.

not filing Tax Returns or

 

 

b.

filing a Tax Return whose contents are incorrect or incomplete or attaching statements whose contents are incorrect,

 

 

as referred to in Article 38 or Article 39 paragraph (1) subparagraph c and subparagraph d of the General Provisions and Tax Procedures Law, insofar as the commencement of the Investigation has not been notified to the Public Prosecutor through official investigators of the Indonesian National Police.

 

(2)

The written statement referred to in paragraph (1) must be signed by the Taxpayer and attached with:

 

 

a.

the calculation of the tax underpayment actually payable;

 

 

b.

the Tax Payment Slip as proof of settlement of the tax underpayment actually payable; and

 

 

c.

the Tax Payment Slip as payment for administrative penalties in the form of a fine of 100% (one hundred per cent).

 

(2a)

Payment of the amount of tax actually payable referred to in paragraph (2) subparagraph b and payment of administrative penalties in the form of fines referred to in paragraph (2) subparagraph c constitutes recovery of losses to state revenues.

 

(3)

If the disclosure of the untruth of actions by the Taxpayers referred to in paragraph (1) conforms to the actual situation, the Taxpayers shall not be subject to a Tax Crime Investigation.

 

(4)

If after the Taxpayers have disclosed the untruth of actions as referred to in paragraph (3) action, data is found that states otherwise than the disclosure of the untruth of actions, the Taxpayers may remain subject to a Preliminary Audit.

 

(5)

Further provisions on procedures for the disclosure of the untruth of actions by Taxpayers are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

3.

The provisions of paragraph (1), paragraph (2), paragraph (6) and paragraph (8) of Article 8 are amended and paragraph (7) of Article 8 is deleted, thereby, Article 8 reads as follows:

 

 

 

 

 

 

 

(1)

Taxpayers may disclose in a separate report in writing regarding the incorrect completion of Tax Returns that have been filed according to the actual situation referred to in Article 8 paragraph (4) of the General Provisions and Tax Procedures Law, insofar as the tax auditors have not submitted the notice of Audit findings.

 

(2)

The separate written report referred to in paragraph (1) must be signed by the Taxpayer and attached with:

 

 

a.

the calculation of underpaid tax according to the actual situation in the Tax Return format;

 

 

b.

the Tax Payment Slip for the settlement of underpaid taxes; and

 

 

c.

the Tax Payment Slip for administrative penalties in the form of interest referred to in Article 8 paragraph (5) of the General Provisions and Tax Procedures Law.

 

(3)

To prove the correctness of the disclosure of incorrectness of the completion of Tax Returns referred to in paragraph (1), the Audit is continued and for the Audit findings, a notice of tax assessment is issued considering the separate report and taking into account the principal tax that has been paid.

 

(4)

If the Audit findings referred to in paragraph (3) prove that the disclosure of incorrect completion of Tax Returns by the Taxpayers does not reflect the actual situation, a notice of tax assessment is issued according to the actual situation.

 

(5)

The Tax Payment Slip referred to in paragraph (2) subparagraph b is taken into account as a tax credit in the notice of tax assessment issued based on the Audit finding referred to in paragraph (3) and paragraph (4).

 

(6)

The Tax Payment Slip referred to in paragraph (2) subparagraph c is proof of payment of administrative penalties related to the disclosure of incorrect completion of Tax Returns.

 

(7)

Deleted.

 

(8)

Further provisions on procedures for the disclosure of the incorrect completion of Tax Returns in a separate report are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

4.

Between Article 10 and Article 11, 1 (one) article is inserted, namely Article 10A, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

Individual Taxpayers conducting business or independent personal services and corporate Taxpayers in Indonesia are required to maintain bookkeeping.

 

(2)

Excluded from the obligation to maintain bookkeeping referred to in paragraph (1), but obliged to maintain recording are:

 

 

a.

individual Taxpayers conducting business or independent personal services who pursuant to statutory provisions in the field of taxation, are permitted to calculate net income using deemed profit;

 

 

b.

individual Taxpayers not conducting business or independent personal services; and

 

 

c.

individual Taxpayers who fulfil certain criteria.

 

(3)

Bookkeeping referred to in paragraph (1) must be maintained based on the applicable financial accounting standards in Indonesia unless statutory tax laws and regulations stipulate otherwise.

 

(4)

The determination of individual Taxpayers who fulfil certain criteria referred to in paragraph (2) subparagraph c at least considers business capital, gross turnover and year of establishment of the Taxpayer’s business.

 

(5)

If a Taxpayer does not fulfil the bookkeeping obligation referred to in paragraph (1) and the recording obligation referred to in paragraph (2), the Taxpayer shall be subject to penalties referred to in General Provisions and Tax Procedures Law.

 

(6)

Provisions on procedures for recording and certain criteria referred to in paragraph (2) and/or procedures for maintaining bookkeeping referred to in paragraph (3), are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

5.

The provisions of paragraph (2), paragraph (3), paragraph (4) and paragraph (5) of Article 12 are amended, between paragraph (4) and paragraph (5) of Article 12, 1 (one) paragraph is inserted, namely paragraph (4a) and the elucidation of paragraph (1) Article 12 is amended as listed in the elucidation of article by article, thereby, Article 12 reads as follows:

 

 

 

 

 

 

 

(1)

If during the Audit, an indication of a tax crime is found, the Audit is followed up with a Preliminary Audit.

 

(2)

If the Audit is followed up with a Preliminary Audit referred to in paragraph (1), the Audit is suspended until:

 

 

a.

the Preliminary Audit is completed because the Taxpayer discloses the untruth of actions as referred to in Article 8 paragraph (3) General Provisions and Tax Procedures Law;

 

 

b.

the Preliminary Audit is terminated because the individual Taxpayer subject to the Preliminary Audit passes away;

 

 

c.

the Preliminary Audit is terminated because no preliminary evidence of a tax crime is found;

 

 

d.

the Investigation is terminated pursuant to the provisions under Article 44A of the General Provisions and Tax Procedures Law or Article 44B of the General Provisions and Tax Procedures Law; or

 

 

e.

the Court’s decision on a tax crime with permanent legal force and a copy of the Court’s decision have been received by the Director General of Taxes.

 

(3)

The suspended Audit referred to in paragraph (2) is continued if:

 

 

a.

the Preliminary Audit is terminated because the individual Taxpayer subject to the Preliminary Audit passes away;

 

 

b.

the Preliminary Audit is terminated because no preliminary evidence of a tax crime is found;

 

 

c.

the Investigation is terminated because there is insufficient evidence or the event is not a tax crime or the suspect passes away as referred to in Article 44A of the General Provisions and Tax Procedures Law; or

 

 

e.

the Court’s decision with permanent legal force where the verdict is not guilty or released from all charges and a copy of the Court’s decision has been received by the Director General of Taxes.

 

(4)

The suspended Audit referred to in paragraph (2) is terminated if:

 

 

a.

the Preliminary Audit is completed because the Taxpayer discloses the untruth of actions as referred to in Article 8 paragraph (3) of the General Provisions and Tax Procedures Law;

 

 

b.

the Investigation is terminated due to Article 44B of the General Provisions and Tax Procedures Law;

 

 

c.

the Investigation is terminated because the statute of limitation of the event referred to in Article 44A General Provisions and Tax Procedures Law has elapsed; and

 

 

d.

the Court’s decision on a tax crime with permanent legal force other than those referred to in paragraph (3) subparagraph d and a copy of the Court’s decision has been received by the Director General of Taxes.

 

(4a)

Excluded from the provisions referred to in paragraph (4) subparagraph a and subparagraph b, the suspended Audit referred to in paragraph (2) is continued if there remains a tax overpayment based on Preliminary Audit results or Investigation results.

 

(5)

The Director General of Taxes may continue to conduct an Audit if after the Audit is terminated as referred to in paragraph (4), there are data other than those disclosed in Article 8 paragraph (3) or Article 44B of the General Provisions and Tax Procedures Law.

 

 

 

 

 

6.

The provisions of paragraph (1) of Article 14 are amended and paragraph (2) and paragraph (3) of Article 14 are deleted, thereby, Article 14 reads as follows:

 

 

 

 

 

 

 

(1)

In a period of 5 (five) years after the time of supply or the end of a Taxable Period, a Fraction of a Tax Year or a Tax Year, the Director General of Taxes may issue a Notice of Tax Underpayment Assessment based on Audit findings if:

 

 

a.

tax payable is not paid or underpaid;

 

 

b.

the Tax Return is not filed within the period referred to in Article 3 paragraph (3) of the General Provisions and Tax Procedures Law and after a written reprimand, it is not filed at the time specified in the Reprimand Letter;

 

 

c.

Value Added Tax and Sales Tax on Luxury Goods should not be set off against the difference in tax overpayment or should not be subject to a 0% (zero per cent) rate;

 

 

d.

the obligations referred to in Article 28 or Article 29 of the General Provisions and Tax Procedures Law are not fulfilled, thereby, the amount of tax payable cannot be known;

 

 

e.

for the Taxpayers, Taxpayer Identification Numbers are issued and/or are registered as Taxable Persons ex officio as referred to in Article 2 paragraph (4a) of the General Provisions and Tax Procedures Law; or

 

 

f.

Taxable Persons do not supply Taxable Goods and/or Taxable Services and/or export of Taxable Goods and/or Taxable Services and have been given a refund of Input VAT or have credited Input VAT as referred to in Article 9 paragraph (6e) of the Value Added Tax Law.

 

(2)

Deleted.

 

(3)

Deleted.

 

 

 

 

 

7.

The provisions of Article 15 are amended, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

The Director General of Taxes may issue a Notice of Additional Tax Underpayment Assessment based on the re-Audit findings of:

 

 

a.

new data resulting in an increase in the amount of tax payable, including data that was not formerly disclosed; or

 

 

b.

voluntary written statement from the Taxpayer referred to in Article 15 paragraph (3) of the General Provisions and Tax Procedures Law.

 

(2)

The Notice of Additional Tax Underpayment Assessment based on the re-Audit findings referred to in paragraph (1) shall be issued within a period of 5 (five) years after the the time of supply or the end of a Taxable Period, a Fraction of a Tax Year or a Tax Year.

 

 

 

 

 

8.

The provisions of paragraph (1) of Article 16 are amended and paragraph (2) of Article 16 is deleted, thereby, Article 16 reads as follows:

 

 

 

 

 

 

 

(1)

The amount of unpaid or underpaid taxes in the Notice of Additional Tax Underpayment Assessment referred to in Article 15 paragraph (1) subparagraph a plus administrative penalties in the form of a surcharge of 100% (one hundred per cent) of the unpaid or underpaid taxes.

 

(2)

Deleted.

 

 

 

 

 

9.

The provisions of paragraph (1) and paragraph (2) of Article 20 are amended, thereby, Article 20 reads as follows:

 

 

 

 

 

 

 

(1)

Audit findings or re-Audit findings referred to in Article 14, Article 15, Article 17 and Article 18, are outlined in the Tax Audit report or re-Tax Audit report.

 

(2)

Based on the Tax Audit report or re-Tax Audit report referred to in paragraph (1), a tax calculation memo is prepared.

 

(3)

The tax calculation memo referred to in paragraph (2) must be followed up with the issuance of a notice of tax assessment.

 

 

 

 

 

10.

The provisions of paragraph (3) and paragraph (4) of Article 24 are amended, and the elucidation of paragraph (1) and paragraph (2) of Article 24 is amended as listed in the elucidation of article by article, thereby, Article 24 reads as follows:

 

 

 

 

 

 

 

(1)

The Director General of Taxes may issue a notice of tax assessment and/or Notice of Tax Collection for a Taxable Period, a Fraction of a Tax Year or a Tax Year before a Taxpayer is given or issued a Taxpayer Identification Number and/or registered as a Taxable Person if data and/or information is obtained showing that there are tax obligations that have not been fulfilled by the Taxpayer.

 

(2)

The Director General of Taxes may issue a notice of tax assessment and/or Notice of Tax Collection for a Taxable Period, a Fraction of a Tax Year or a Tax Year before and/or after the deregistration of the Taxpayer Identification Number or VAT deregistration if after the deregistration of the Taxpayer Identification Number or VAT deregistration, data and/or information is obtained indicating that there are tax obligations that have not been fulfilled by the Taxpayer.

 

(3)

The notice of tax assessment and/or Notice of Tax Collection referred to in paragraph (1) and/or paragraph (2) shall be issued within a period of 5 (five) years after the time of supply or the end of a Taxable Period, a Fraction of a Tax Year or a Tax Year.

 

(4)

Further provisions on procedures for the issuance of notices of tax assessment and/or Notices of Tax Collection referred to in paragraph (1), paragraph (2) and paragraph (3) are stipulated in a Minister of Finance Regulation.

 

 

 

 

 

11.

The provisions of Article 29 are deleted.

 

 

 

 

 

12.

The provisions of Article 43 are deleted.

 

 

 

 

 

13.

The provisions of Article 44 are deleted.

 

 

 

 

 

14.

The provisions of Article 45 are deleted.

 

 

 

 

 

15.

Between Article 45 and Article 46, 1 (one) article is inserted, namely Article 45A, thereby, it reads as follows:

 

 

 

 

 

 

 

(1)

Taxpayers are given interest compensation if the filing of an objection, application for an appeal or application for a civil review, is granted in part or in whole, thereby, resulting in a tax overpayment.

 

(2)

The interest compensation referred to in paragraph (1) shall be given for the tax overpayment at a maximum of the amount of the overpayment approved by the Taxpayer in the Closing Conference for the Tax Return stating the overpayment for which the following has been issued:

 

 

a.

Notice of Tax Underpayment Assessment;

 

 

b.

Notice of Additional Tax Underpayment Assessment;

 

 

c.

Notice of Tax Overpayment Assessment; or

 

 

d.

Notice of Nil Tax Assessment.

 

(3)

The amount of overpayment agreed by the Taxpayer in the Closing Conference referred to in paragraph (2), is the amount of overpayment according to the Taxpayer submitted by the Taxpayer at the Closing Conference.

 

(4)

The Tax Return stating the overpayment referred to in paragraph (2) is a tax return stating an overpayment with an application for a tax refund.

 

(5)

The interest compensation referred to in paragraph (1) is given:

 

 

a.

based on the monthly interest rate stipulated by the Minister of Finance based on the reference interest rate divided by 12 (twelve); and

 

 

b.

for a maximum of 24 (twenty-four) months and a fraction of a month is treated as 1 (one) full month.

 

(6)

The monthly interest rate referred to in paragraph (5) used as the basis for calculating interest compensation is the monthly interest rate applicable on the date the calculation of the interest compensation commences.

 

(7)

The interest compensation referred to in paragraph (1), is calculated from the date of issuance of the Notice of Tax Underpayment Assessment, Notice of Additional Tax Underpayment Assessment, Notice of Tax Overpayment Assessment or Notice of Nil Tax Assessment until the date of issuance of the Objection Decision Letter, Appeal Decision or Civil Review Decision.

 

(8)

To the granting of interest compensation referred to in paragraph (1), the following provisions shall apply:

 

 

a.

if the Taxpayer files an objection, interest compensation is given if an appeal is not filed against the Objection Decision Letter to the Tax Court; or

 

 

b.

if the Taxpayer files an appeal, interest compensation is given if the Appeal Decision has been received by the Director General of Taxes from the Tax Court.

 

(9)

Further provisions on procedures for the granting of interest compensation are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

16.

The provisions of paragraph (1), paragraph (6) and paragraph (7) subparagraph d of Article 60 are amended, paragraph (7) subparagraph c and subparagraph e of Article 60 are deleted and the elucidation of paragraph (2) of Article 60 is amended as listed in the elucidation of article by article, thereby, Article 60 reads as follows:

 

 

 

 

 

 

 

(1)

Based on the results of the development and analysis of information, data, reports and complaints, the Director General of Taxes is authorised to conduct a Preliminary Audit as referred to in Article 43A of the General Provisions and Tax Procedures Law.

 

(2)

The Preliminary Audit referred to in paragraph (1) can be conducted in a restricted or public manner.

 

(3)

A restricted Preliminary Audit is carried out without notification to the Taxpayer.

 

(4)

A public Preliminary Audit is carried out with written notification to the Taxpayer.

 

(5)

In carrying out a Preliminary Audit, the officials conducting a public Preliminary Audit are authorised to:

 

 

a.

request and check financial statements, books of accounts, records and documents constituting the underlying proof of bookkeeping or recording and other documents related to income earned, business, independent personal services of the Taxpayer or taxable objects;

 

 

b.

access and/or download electronically managed data;

 

 

c.

enter and inspect premises or rooms, movable and/or immovable property suspected or reasonably suspected of being used to retain books of accounts or records, documents constituting the underlying proof of bookkeeping or recording, other documents, money and/or goods that may provide hints about income earned, business, independent personal services of the Taxpayer or taxable objects,

 

 

d.

seal certain premises or rooms and movable and/or immovable property;

 

 

e.

request required information and/or evidence from third parties related to the Taxpayer subject to the Preliminary Audit through the Director General of Taxes as referred to in Article 54;

 

 

f.

request information from related parties and outlined in the official report of inquiry; and

 

 

g.

undertake other actions required in the context of the Preliminary Audit.

 

(6)

Provisions on procedures for sealing referred to in paragraph (5) subparagraph d are stipulated by a Minister of Finance Regulation.

 

(7)

A Preliminary Audit must be followed up with:

 

 

a.

a Tax Crime Investigation if preliminary evidence of a tax crime is found;

 

 

b.

written notification to the Taxpayer that the Taxpayer is not subject to an Investigation if the Taxpayer has disclosed the untruth of actions referred to in Article 7;

 

 

c.

deleted;

 

 

d.

the termination of the Preliminary Audit if:

 

 

 

1.

the individual Taxpayer subject to the Preliminary Audit passes away; or

 

 

 

2.

no preliminary evidence of a tax crime is found;

 

 

e.

deleted.

 

 

 

 

 

17.

The provisions of paragraph (2) of Article 62 are amended and between paragraph (2) and paragraph (3) of Article 62, 1 (one) paragraph is inserted, namely paragraph (2a), thereby, Article 62 reads as follows:

 

 

 

 

 

 

 

(1)

For state revenue purposes, at the request of the Minister of Finance, the Attorney General may terminate a Tax Crime Investigation within a maximum period of 6 (six) months from the date of the request letter.

 

(2)

The request from the Minister of Finance referred to in paragraph (1) can be implemented if the Taxpayer has settled:

 

 

a.

the amount of unpaid or underpaid tax or which should not be otherwise refunded; and/or

 

 

b.

the amount of tax in the tax invoice, collection receipt, tax collection receipt and/or proof of tax remittance,

 

 

plus an administrative penalty in the form of a fine of 3 (three) times the amount of the tax.

 

(2a)

Payment of the total tax plus administrative penalties in the form of fines referred to in paragraph (2) constitutes recovery of losses to state revenues.

 

(3)

The amount of tax referred to in paragraph (2) is the amount of losses to state revenues calculated based on the official report of expert audit prior to settlement in the context of the submission of the request for termination of Investigation by the Minister of Finance.

 

 

 

 

 

18.

Between Article 63 and Article 64, 2 (two) articles are inserted, namely Article 63A and Article 63B, thereby, they read as follows:

 

 

 

 

 

 

 

(1)

Taxpayers may exercise tax rights and fulfil tax obligations electronically and use electronic signatures pursuant to statutory provisions on electronic information and transactions.

 

(2)

The electronic signatures referred to in paragraph (1) include certified electronic signatures and uncertified electronic signatures.

 

(3)

If the exercise of tax rights and fulfilment of tax obligations referred to in paragraph (1) use a certified electronic signature, the Taxpayer is granted a digital certificate issued by digital certification operators pursuant to statutory provisions on electronic information and transactions.

 

(4)

The digital certification operators referred to in paragraph (3) are appointed by the Minister of Finance.

 

(5)

The Minister of Finance may cooperate with government agencies, institutions, associations and other parties to provide facilities for the electronic exercise of tax rights and/or fulfilment of tax obligations referred to in paragraph (1), through an administrative system that is integrated with the system at the Directorate General Tax.

 

(6)

Further provisions on:

 

 

a.

procedures for the electronic exercise of tax rights and fulfilment of tax obligations; and

 

 

b.

cooperation with government agencies, institutions, associations and other parties as well as the scope of the electronic exercise of the Taxpayer’s tax rights and fulfilment of tax obligations,

 

 

are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

 

 

(1)

The Director General of Taxes may issue decisions or assessments in the context of implementing statutory provisions in the field of taxation, in electronic form and electronically signed.

 

(2)

Decisions or assessments in electronic form referred to in paragraph (1) have the same legal force as written decisions or assessments.

 

(3)

If decisions or assessments are prepared in electronic form, no decisions or assessments are prepared in writing.

 

(4)

The date of delivery or the date of receipt related to the electronic exercise of tax rights and fulfilment of tax obligations is the date of electronic delivery in the administrative system of the Directorate General of Taxes or an administrative system that is integrated with the administrative system of the Directorate General of Taxes.

 

(5)

Further provisions on procedures for the electronic issuance, signing and delivery of decisions or assessments in electronic form are stipulated by a Minister of Finance Regulation.

 

 

 

 

 

 

When this Government Regulation comes into force, the withholding of Income Tax on Bond Interest income received or accrued by non-resident Taxpayers other than permanent establishments referred to in Article 3 paragraph (4) up to 6 (six) months after this Government Regulation comes into force, shall comply with the provisions stipulated under Government Regulation Number 16 of 2009 concerning Income Tax on Income in the Form of Bond Interest as amended several times, last amended by Government Regulation Number 55 of 2019 concerning the Second Amendment to Government Regulation Number 16 of 2009 concerning Income Tax on Income in the Form of Bond Interest.

 

 

 

 

 

When this Government Regulation comes into force, Taxable Persons other than retailer Taxable Persons that prepare Tax Invoices without including the identity of the buyer of Taxable Goods or the recipient of Taxable Services referred to in Article 13 paragraph (5) subparagraph b of the Value Added Tax Law until 30 (thirty) days after this Government Regulation comes into force, are not subject to administrative penalties referred to in Article 14 paragraph (4) of the General Provisions and Tax Procedures Law.

 

 

 

 

 

When this Government Regulation comes into force:

1.

for:

 

a.

notices of tax assessment or Notices of Tax Collection issued since 2 November 2020 which contain administrative penalties in the form of interest, whose calculation of administrative penalties commences before 2 November 2020; and

 

b.

the disclosure of incorrect completion of Tax Returns submitted since 2 November 2020, where the calculation of administrative penalties commences before 2 November 2020,

 

the imposition of administrative penalties is calculated using interest rates according to the Minister of Finance Decree stipulating the calculation of interest rates as the basis for calculating administrative penalties in the form of interest and interest compensation which is valid for November 2020;

2.

for:

 

a.

the disclosure of untruth of actions referred to in Article 8 paragraph (3) of the General Provisions and Tax Procedures Law; and

 

b.

the request for termination of Investigation referred to in Article 44B of the General Provisions and Tax Procedures Law,

 

submitted by taxpayers since 2 November 2020, the imposition of administrative penalties shall comply with the General Provisions and Tax Procedures Law;

3.

for the administrative penalties referred to in Article 14 paragraph (4) of the General Provisions and Tax Procedures Law imposed through the Notice of Tax Collection issued since 2 November 2020, the imposition of administrative penalties shall comply with the General Provisions and Tax Procedures Law;

4.

for interest compensation granted based on assessments, decisions or verdicts issued since 2 November 2020 and the calculation of interest compensation commences before 2 November 2020, the interest compensation is calculated using interest rates pursuant to the Minister of Finance Decree stipulating the calculation of interest rates as the basis for the calculation of administrative penalties in the form of interest and the granting of interest compensation applicable for November 2020;

5.

for the repayment of Input VAT that has been refunded or has been credited by Taxable Persons not performing supplies Taxable Goods and/or Taxable Services and/or exports of Taxable Goods and/or Taxable Services referred to in Article 9 paragraph (6e) of the Value Added Tax Law, which has not been implemented until 2 November 2020, for the Input VAT, a Notice of Tax Underpayment Assessment shall be issued as referred to in Article 13 paragraph (1) subparagraph f of the General Provisions and Tax Procedures Law; and

6.

for interest compensation that should not be granted and has not been repaid by the Taxpayers until 2 November 2020, the interest compensation is collected by issuing a Notice of Tax Collection as referred to in Article 14 paragraph (1) subparagraph h of the General Provisions and Tax Procedures law.

 

 

 

 

 

 

When this Government Regulation comes into force, Government Regulation Number 19 of 2009 concerning Income Tax on Dividends Received or Accrued by Resident Individual Taxpayers (State Gazette of the Republic of Indonesia of 2009 Number 36, Supplement to the State Gazette of the Republic of Indonesia Number 4985), remains valid insofar as it does not contradict the provisions under this Government Regulation.

 

 

 

 

 

This Government Regulation shall come into force on the date of promulgation.

 

 

 

 

 

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

 

 

 

 

 

Enacted in Jakarta
on 2 February 2021
PRESIDENT OF THE REPUBLIC OF INDONESIA,
signed
JOKO WIDODO

Promulgated in Jakarta
on 2 February 2021
MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,
signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2021 NUMBER 19

 

 

 

 

In the context of supporting job creation which requires adjustments to various regulatory aspects relating to convenience, protection and empowerment of cooperatives and micro, small and medium enterprises, enhancing the investment ecosystem and accelerating national strategic projects, including increasing the protection and welfare of workers, Law Number 11 of 2020 concerning Job Creation Law has been promulgation.

The Job Creation Law, among others, has amended 3 (three) Laws in the field of taxation, namely the Income Tax Law, Value Added Tax Law and General Provisions and Tax Procedures Law. In the Job Creation Law, among others, there is a mandate in the provisions under Article 111 which regulates the imposition of Article 26 paragraph (1b) Income Tax rate of the Income Tax Law on income in the form of interest received by non-resident Taxpayers other than permanent establishments in Indonesia.

Under the provisions of Article 185 letter b of the Job Creation Law, there is also the regulation to adjust the implementing regulations of the law subject to the amendment by the Job Creation Law, in this case, the Income Tax Law, Value Added Tax Law and General Provisions and Tax Procedures Law.

 

a.

Government Regulation Number 94 of 2010 concerning the Calculation of Taxable Income and Settlement of Income Tax in the Current Year as amended by Government Regulation Number 45 of 2019, which constitutes the implementation of the Income Tax Law;

 

b.

Government Regulation Number 1 of 2012 concerning the Implementation of Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, last amended by Law Number 42 of 2009, which constitutes the implementation of the Value Added Tax Law; and

 

c.

Government Regulation Number 74 of 2011 concerning Procedures for the Exercise of Tax Rights and Fulfilment of Tax Obligations, which constitutes the implementation of the General Provisions and Tax Procedures Law.

 

 

 

In addition, in the context of supporting the ease of doing business as one of the goals of the Job Creation Law, there are business processes in the field of taxation that also need to be adjusted, namely by optimising the use of information technology in tax administration. This is conducted to simplify business processes and provide convenience for Taxpayers in exercising their tax rights andfulfilling their tax obligations. In principle, this Government Regulation aims to provide a legal basis for regulating the tax treatment to support ease of doing business and supporting the acceleration of the implementation of strategic policies in the field of taxation as stipulated under the Job Creation Law.

The scope of regulation in this Government Regulation covers the tax treatment to support ease of doing business in the field of Income Tax, in the field of Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods as well as in the field of General Provisions and Tax Procedures, with the following subject matters:

 

a.

the tax treatment in the field of Income Tax, including the regulation of dividends or other income excluded from Income Tax objects, applicable to those received or accrued by resident individual and corporate Taxpayers since the promulgation of the Job Creation Law;

 

b.

the tax treatment in the field of Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods, including the regulation of the status of national identification numbers to be equivalent to Taxpayer Identification Numbers in the context of preparing Tax Invoices and crediting Input VAT for individual buyer Taxable Persons ; and

 

c.

the tax treatment in the field of General Provisions and Tax Procedures, including changes to administrative penalties in the disclosure of incorrect completion of Tax Returns upon an Audit from 50% (fifty per cent) to interest rates based on reference rates with a maximum period of 24 (twenty-four) months and the disclosure of untruth of actions from 150% (one hundred and fifty pe rcent) to 100% (one hundred per cent) as well as a request for termination of a Tax Crime Investigation from a fine of 4 (four) times the amount of tax to 3 (three) times the amount of tax.

 

 

 

With the formulation of this Government Regulation, it is expected that the optimisation of the regulation in the field of taxation may support and realise the goals of the Job Creation Law which will have a positive impact on improving the economy of the Unitary State of the Republic of Indonesia.

 

 

 

 

Article 1

Sufficiently clear.

Article 2

Sufficiently clear.

Article 3

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Subparagraph a

“Interest-bearing bonds” are known as interest-bearing debt securities. “The holding period” is known as the holding period.

Subparagraph b

“Accrued interest” is known as accrued interest.

Subparagraph c

“Zero-coupon Bonds” are known as non-interest-bearing debt securities.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

The mutatis mutandis application is intended for the generally applicable tax provisions to also apply to sharia-based transactions. The yields may be in the form of ujrah/fees, margin, profit sharing or other similar income according to the sharia transaction approach used.

Paragraph (8)

Sufficiently clear.

Article 4

Number 1

Article 1

Sufficiently clear.

Number 2

Article 2A

Paragraph (1)

Dividends or other income are received or accrued:

1.	for companies that do not go public, when recorded as dividend payable, namely when the dividend distribution is announced or determined at the annual general meeting of shareholders (GMS).
2.	for companies that go public, the recording date of the ownership of shareholders entitled to the dividends.

 

Examples of dividends or other income that fulfil and do not fulfil the provisions referred to in Article 4 paragraph (3) subparagraph f to be excluded as Income Tax objects:

1.	PT A (a go-public company in Indonesia) announced a dividend of IDR10,000,000,000 at the GMS on 27 October 2020. The recording date was 30 October 2020 and the dividend was paid on 5 November 2020. Thereby, dividend income received by PT B (a shareholder at the recording date) is not included as dividend income which is excluded from Income Tax objects.
2.	PT X (a non-go-public company) announced a dividend of IDR15,000,000,000 at the GMS on 3 November 2020. The dividend was paid on 5 November 2020. Thereby, dividend income received by PT X (a shareholder of PT X) is not included as dividend income which is excluded from Income Tax objects.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Sufficiently clear.

Paragraph (8)

Sufficiently clear.

Article 5

Number 1

Article 1

Sufficiently clear.

Number 2

Article 5A

Sufficiently clear.

Number 3

Article 16

Deleted.

Number 4

Article 17

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Subparagraph a

The time of supply of movable property is the basis for determining the time of supply and also the basis for preparing Tax Invoices.

 

These provisions are intended to synchronise the time of supply with common business practices reflected in the practice of recording or bookkeeping based on generally accepted and applied consistently accounting principles by Taxable Persons.

 

In business practice and based on generally accepted accounting principles:

a.	a supply of movable property may occur when the goods are released from the control of a (seller) Taxable Person to be supplied directly or indirectly to other parties. Therefore, the time of supply is the time the right of control of the goods has been transferred to the buyer or a third party for and on behalf of the buyer; and
b.	a transfer of the right of control of goods may also occur when the goods are supplied to a second party or buyer or when the goods are supplied through a forwarder, freight forwarder, transportation company or another third party. Therefore, the time of supply is the time the goods are supplied to the forwarder or transportation company.

 

The time of a supply of goods referred to in letter a and letter b is reflected in generally accepted accounting principles in the form of recognition as receivables or income with the issuance of sales invoices as the source document.

 

In business, the time of recognition of receivables or income or the issuance of sales invoices may not occur at the same time as the time of the physical supply of goods referred to in letter a and letter b. Therefore, in the context of providing administrative convenience related to the time of preparation of the Tax Invoice, the time of issuance of an invoice is determined as the time of supply of goods which constitutes the basis for the time of supply.

 

Included in the definition of an invoice are other documents that function the same as sales invoices.

Subparagraph b

A supply of Taxable Goods for immovable Taxable Goods occurs when the letter or deed of agreement resulting in the transfer of rights to the said goods is signed by the parties concerned. This time constitutes the basis for determining the time of supply .

 

However if the supply of rights to immovable property has actually occurred even though the letter or deed of agreement resulting in the transfer of rights has not been signed, the supply of Taxable Goods is deemed to have occurred.

Subparagraph c

Sufficiently clear.

Subparagraph d

“Inventory” refers to raw material inventory, indirect material inventory, work-in-process inventory, semi-finished goods inventory and/or finished goods inventory.

Subparagraph e

“Business merger, business consolidation, business split-off and business acquisition” are business merger, business consolidation, business split-off and business acquisition referred to in the Law stipulating limited liability companies.

 

“Business spin-off” refers to the split-off of 1 (one) business entity into 2 (two) or more business entities by establishing a new business entity and transferring part of assets and liabilities to the new business entity without liquidating the former business entity.

 

“A change in business form” refers to a change in the form of business used by a Taxable Person, for example, the business form of a Taxable Person was formerly commanditaire vennootschap and is later changed to a limited liability company.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

A supply of Taxable Services occurs when facilities or conveniences are available for actual use, either in part or in whole. The time of supply of Taxable Services is the basis for determining the time of supply and also the basis for preparing a Tax Invoice.

 

However, in business practice and based on generally accepted accounting principles, the recognition of receivables or income or the issuance of sales invoices may not occur at the same time as the availability of facilities or conveniences for actual use, either in part or in whole. In the context of providing administrative convenience related to the time of the preparation of a Tax Invoice, the time of issuance of an invoice can be determined as the time of supply of services constituting the basis for when Value Added Tax is payable.

 

These provisions are intended to synchronise the time of supply with common business practices reflected in the practice of recording or bookkeeping based on generally accepted and consistently applied accounting principles by Taxable Persons.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Sufficiently clear.

Paragraph (8)

Sufficiently clear.

Paragraph (9)

Sufficiently clear.

Paragraph (10)

Sufficiently clear.

Number 5

Article 17A

Paragraph (1)

Supplies of Tangible Taxable Goods that, according to their nature or law are in the form of movable property carried out on a consignment basis are supplies of Taxable Goods carried out in the following manner:

a.	the consignor consigns the Taxable Goods to the consignee; and
b.	the consignee supplies the consigned Taxable Goods referred to in letter a to the buyer of the said Taxable Goods.

 

Pursuant to these provisions, a supply of Taxable Goods on a consignment basis by the consignor does not occur when the Taxable Goods are supplied directly to be consigned with the consignee but occurs when the consignor recognises them as receivables or income or when an invoice is issued by the consignor Taxable Person, according to generally accepted and consistently applied accounting principles.

Paragraph (2)

Sufficiently clear.

Number 6

Article 19

Paragraph (1)

In principle, a Tax Invoice must be prepared at the time of supply. However, for some reasons, there may be a delay in the preparation of the Tax Invoice. The delay in the preparation of a Tax Invoice is subject to penalties pursuant to Article 14 paragraph (1) subparagraph d in conjunction with Article 14 paragraph (4) of the General Provisions and Tax Procedures Law without any provision on the time limit for the delay. To ensure the certainty of the collection of Value Added Tax or Value Added Tax and Sales Tax on Luxury Goods on supplies of Taxable Goods and/or Taxable Services, it is necessary to limit the period for the preparation of Tax Invoices. In addition, these provisions are also intended to harmonise the recognition of income in calculating business turnover used to calculate Income Tax with the business turnover used to calculate Value Added Tax.

 

Thus, the time of the preparation of a Tax Invoice is determined according to sound business principles and must comply with generally accepted and consistently applied accounting principles.

 

Included in the definition of Tax Invoices under these provisions are certain documents equivalent to Tax Invoices prepared for supplies of Taxable Goods and/or supplies of Taxable Services.

 

For legal certainty and to provide administrative convenience to Taxable Persons in fulfilling Value Added Tax obligations, it is necessary to explain or confirm in the form of an illustration when the Taxable Persons prepare a Tax Invoice for supplies of Taxable Goods and/or Taxable Services and exports of Taxable Goods.

 

Example of the time of preparation of a Tax Invoice:

1.	Supplies of movable Taxable Goods.   Example 1: PT Aman supplied Taxable Goods directly to Mr. Igna on 15 May 2021. For the supply of Taxable Goods transaction, PT Aman prepared a Tax Invoice on 15 May 2021.   Example 2: PT Berkah domiciled in Jakarta sold Taxable Goods to PT Ceria in Surabaya with FOB shipping point terms of delivery. Taxable Goods were released from PT Berkah’s warehouse and delivered to PT Ceria’s warehouse on 10 June 2021 using a shipping company with a DO (delivery order) dated 10 June 2021. Goods were received by PT Ceria on 12 June 12021. For the supply of Taxable Goods transaction, PT Berkah prepared a Tax Invoice on 10 June 2021.   If in example 1 and example 2 above, the invoice was not issued on the date of the direct supply or when supplied to the forwarder or freight forwarder due to certain conditions, the Tax Invoice must be prepared upon the issuance of the invoice. The invoice must be issued according to generally accepted and consistently applied accounting principles.   Example 3: PT Cantik in Jakarta sold Taxable Goods to PT Sentosa in Semarang with FOB destination term of delivery. The goods were released from PT Cantik’s warehouse and delivered to PT Sentosa’s warehouse on 12 August 2021 using a shipping company. The goods were received by PT Sentosa on 13 August 2021. PT Cantik issued an invoice on 16 August 2021. For the supply of Taxable Goods, PT Cantik was required to prepare a Tax Invoice on 13 August 2021 or no later than 16 August 2021.
2.	Supplies of immovable Taxable Goods.   Example 1: The sale and purchase agreement for a house was signed on 1 May 2021. The agreement for the supply of the right to use or control the house was drawn up or signed on 1 September 2021. A tax invoice must be prepared on 1 September 2021.   If before the letter or deed is drawn up or signed, the immovable property has been supplied or in the control of the buyer or the recipient of the goods, the Tax Invoice must be prepared when the goods are actually supplied or are in the control of the buyer or the recipient of the goods.   Example 2: A turnkey house was actually sold and supplied on 1 August 2021. The Tax Invoice must be prepared on 1 August 2021.   If before the letter or deed is drawn up or signed, the immovable property has already been supplied or in the control of the buyer or the recipient of the goods, then the Tax Invoice must be prepared when the goods are actually supplied or are in the control of the buyer or the recipient of the goods.   Example 3: A turnkey house was actually sold and supplied on 1 August 2021. The sale and purchase agreement was signed on 1 September 2021. The Tax Invoice must be prepared on 1 August 2021.
3.	Supplies of Taxable Services.   Example 1: PT Semangat leases 1 (one) shophouse unit to PT Diatetupa with a contract period of 12 (twelve) years. In the contract, the following are agreed upon:
	-	PT Diatetupa started using the shophouse on 1 September 2021.
	-	The lease contract value for 12 (twelve) years is IDR120,000,000.00.
	-	The lease payments are annual and agreed to be paid every 29 September with a payment of IDR10,000,000.00 per year.
	On 29 September 2021, PT Diatetupa paid the lease for the first year. For the supply of Taxable Services, PT Semangat must prepare a Tax Invoice on 29 September 2021 with a Tax Base of IDR10,000,000.00.   Example 2: PT Toryung contracted Firma Cerah Konsultan to provide management consulting services and training to PT Toryung’s marketing staff for 6 (six) months with a contract value of IDR60,000,000.00. The consulting services will be paid monthly. Firma Cerah Konsultan started providing consulting services on 1 July 2021. On 10 August 2021, Firma Cerah Konsultan submitted an invoice for payment for consulting services in July 2021 amounting to IDR10,000,000.00.00. PT Toryung paid the invoice on 20 August 2021. For this transaction, Firma Cerah Konsultan must prepare a Tax Invoice on 10 August 2021 with a Tax Base of IDR10,000,000.00 (according to the value of the invoice) even though the payment was only received on 20 August 2021.   Example 3: PT Setiyakom is a telecommunications services company. PT Setiyakom bills customers according to a usage period of 1 (one) month. Collection of usage data from customers takes a few days, thereby, invoices can only be issued a few days later.   For example, for use by a customer from 1 to 30 June 2021, PT Setiyakom will issue an invoice (collects) on 5 July 2021.   In this case, the Tax Invoice is prepared when the supply of services is declared or recorded as receivables or income, namely at the end of the usage period (30 June 2021) or no later than when the invoice is issued (5 July 2021).   The matrix of the time of preparation of the Tax Invoices for several examples of supplies in the field of telecommunication services is as follows:   No. Period of Usage/Supply of Taxable Services When Income is Recognised Issuance of the Invoice Maximum Preparatio n of the Tax Invoice 1a 1–30 June 2021 June 2021 30 June 2021 30 June 2021 1b 1–30 June 2021 June 2021 5 July 2021 5 July 2021 1c 1–30 June 2021 June 2021 31 July 2021 31 July 2021 2 26 May–25 June 2021  June 2021 6 July 2021 6 July 2021 3 16 May–15 June 2021 May 2021 20 June 2021 20 June 2021 4 16 May–15 June 2021 June 2021 20 June 2021 20 June 2021 5 16 May–15 June 2021 May 2021 31 May 2021 31 May 2021 June 2021 15 June 2021 15 June 2021
4.	Supplies of part of work phases (term payments).   For supplies of part of work phases, for example, supplies of building contractor services or other immovable property, the time for preparing the Tax Invoice can be explained as follows:   Generally, the work of building contractor services and other immovable property is completed within a certain period. Before the contractor services are completed and ready to be supplied, advance payments have been received in advance before the contractor work commences or payment for part of the completion of the service work according to the phases or progress of work completion. In this case, Value Added Tax is payable when the payment is received by the contractor, pursuant to the provisions stipulated under Article 11 paragraph (2) of the Value Added Tax Law.   Further, after the building or immovable property has been completed, all contractor services are supplied to the recipient of the services. In this case, Value Added Tax is payable when the Taxable Services are supplied even though the full payment for the contractor services has not been received by the contractor, pursuant to the provisions stipulated under Article 11 paragraph (1) of the Value Added Tax Law. Example:
	1.	On 1 April 2021, the contractor agreement was signed and a 20% down payment was received.
	2.	On 1 May 2021, the work was 20% complete, the 1st phase payment was received.
	3.	On 1 June 2021, the work was 50% complete, the 2nd phase payment was received.
	4.	On 20 June 2021, the work was 80% complete, the 3rd phase payment was received.
	5.	On 25 August 2021, the work was 100% complete, the building or immovable property is supplied.
	6.	On 1 September 2021, the final (4th) phase payment of 95% of the contractor price was received.
	7.	On 1 March 2022, the settlement payment for all contractor services was received.
	From number 1 to number 4, Value Added Tax was payable on the date of receipt of the (phase) payment, whereas in number 5 to number 7, Value Added Tax was payable on 25 August 2021 or when the contractor services (building or immovable property) are completed and supplied to the owner.   It is not necessary to pay attention to the payment dates referred to in number 6 and number 7 because they are not included in the time that determines the payability of Value Added Tax according to the accrual basis adopted in the Value Added Tax Law.   The abovementioned calculation method also applies if the Taxable Goods and/or Taxable Services are sold using a down payment, whereas the Taxable Goods and/or Taxable Services are supplied later.

Paragraph (2)

Deleted.

Paragraph (3)

In principle, the Tax Invoice must be prepared upon a supply of Taxable Goods and/or a supply of Taxable Services. However, for some reasons, there may be a delay in the preparation of the Tax Invoice.

 

The delay in the preparation of a Tax Invoice is subject to penalties pursuant to Article 14 paragraph (1) subparagraph d in conjunction with Article 14 paragraph (4) of the General Provisions and Tax Procedures Law without any provision on the time limit for delays. To ensure the certainty of the collection of Value Added Tax on supplies of Taxable Goods and/or Taxable Services subject to Value Added Tax payable, it is necessary to limit the period for the preparation of Tax Invoices. In addition, these provisions are also intended to harmonise the recognition of income in calculating business turnover used to calculate Income Tax with the business turnover used to calculate Value Added Tax.

 

Included in the definition of Tax Invoices under these provisions are certain documents equivalent to Tax Invoices prepared for supplies of Taxable Goods and/or supplies of Taxable Services.

Paragraph (4)

A Tax Invoice is a collection receipt prepared by Taxable Persons supplying Taxable Goods and/or supplying Taxable Services. Thus, a Tax Invoice prepared by Taxable Persons that exceeds the time limit referred to in paragraph (3) is not a valid collection receipt.

Paragraph (5)

These provisions are intended to protect the buyer of Taxable Goods and/or the recipient of Taxable Services by emphasising that a Tax Invoice prepared more than 3 (three) months from the time the Tax Invoice should be prepared referred to in paragraph (3) is not a valid collection receipt, thereby, the Value Added Tax listed in the Tax Invoice constitutes non-creditable Input VAT.

Number 7

Article 19A

Paragraph (1)

Sufficiently clear.

Paragraph (2)

A Tax Invoice is a collection receipt and can be used as a means to credit Input VAT. The Tax Invoice must be filled in correctly, completely and clearly and signed by the party appointed by the Taxable Person to sign it. However, the information on Sales Tax on Luxury Goods is only filled in if the supply of Taxable Goods is subject to Sales Tax on Luxury Goods payable. Tax invoices that are not filled out pursuant to the provisions under this Article result in the Value Added Tax listed therein being non-creditable pursuant to the provisions under Article 9 paragraph (8) subparagraph f of the Value Added Tax Law.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Tax Invoices that include the identity of the buyer of Taxable Goods or the recipient of Taxable Services in the form of the name, address and national identificaction number for tax residents pursuant to statutory provisions exclude Tax Invoices which do not include the name, address and Taxpayer Identification Number of the buyer Taxable Goods or recipient of Taxable Services referred to in Article 9 paragraph (8) subparagraph f of the Value Added Tax Law.

 

Thus, the Value Added Tax listed in the said Tax Invoice constitutes Input VAT which can be credited by individual Taxable Persons insofar as provisions on Input VAT crediting pursuant to statutory tax provisions are fulfilled.

Number 8

Article 20

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Deleted.

Paragraph (3)

Deleted.

Paragraph (4)

Sufficiently clear.

Article 6

Number 1

Article 1

Sufficiently clear.

Number 2

Article 7

Paragraph (1)

The principle of the self-assessment system in tax collection is to provide an opportunity for Taxpayers to voluntarily calculate, pay and file tax payable pursuant to statutory tax laws and regulations according to the actual situation. Thus, even though the Taxpayers are currently subject to law enforcement measures, the Taxpayers remain able to voluntarily fulfil their tax obligations by self-disclosing the untruth of their actions.

 

a.	not filing Tax Returns; or
b.	filing Tax Returns whose content is incorrect or incomplete or attaching a statement whose content is incorrect,

 

carried out due to negligence or willful misconduct, the Director General of Taxes is authorised to conduct a Preliminary Audit prior to conducting a Tax Crime Investigation.

 

In the context of consistent application of the self-assessment system, even though Taxpayers have committed the abovementioned actions and the Taxpayers are currently being subject to a Preliminary Audit or the Preliminary Audit has been followed up with an Investigation, the Taxpayers remain able to disclose their mistakes and the Taxpayers will not be subject to an Investigation insofar as the commencement of the Investigation has not been notified to the Public Prosecutor through official investigators of the Indonesian National Police.

 

To provide legal certainty, the commencement of the Investigation stipulated under this paragraph refers to when the notice of the commencement of an Investigation is submitted to the Public Prosecutor through official investigators of the Indonesian National Police. Thus if the commencement of the Investigation has been notified, the Taxpayers are no longer able to disclose the untruth of actions.

Paragraph (2)

Sufficiently clear.

Paragraph (2a)

Sufficiently clear.

Paragraph (3)

a.	when the Taxpayer is subject to a Preliminary Audit; or
b.	when the Preliminary Audit has been followed up with an Investigation but insofar as the commencement of the Investigation has not been notified to the Public Prosecutor through official investigators of the Indonesian National Police.

 

If the disclosure of untruth of a Taxpayer’s actions is notified during the Preliminary Audit, to prove that the disclosure of the untruth of the Taxpayer’s actions conforms to the actual situation, the Director General of Taxes completes the Preliminary Audit being carried out.

 

If the disclosure of the untruth of the Taxpayer’s actions is notified after the Preliminary Audit has been followed up with an Investigation but the commencement of the Investigation has not been notified to the Public Prosecutor through official investigators of the Indonesian National Police, the Investigation is terminated insofar as the disclosure of the untruth has been declared to conform to the actual situation through expert testimony.

 

“Conforms to the actual situation” is tax payable that is not paid or underpaid or which should not be refunded according to the Taxpayer’s disclosure, the amount of which is equal to or greater than the findings of the Preliminary Audit.

 

If the disclosure of the untruth of the Taxpayer's actions conforms to the actual situation, the Preliminary Audit is not followed up with a Tax Crime Investigation and the Taxpayer is notified in writing regarding the Preliminary Audit not being followed up with a Tax Crime Investigation.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Number 3

Article 8

Paragraph (1)

In principle, a Taxpayer has the right to rectify a Tax Return before the Director General of Taxes conducts an Audit. However if the Director General of Taxes has conducted an Audit, the Taxpayer remains able to voluntarily disclose the incorrectness of the completion of the Tax Return insofar as the Director General of Taxes has not issued a notice of tax assessment.

 

To provide legal certainty and prevent the non-consideration of the disclosure of the incorrect completion of the Tax Return by the tax auditor, the disclosure must be performed before the tax auditor submits the notice of tax Audit findings. This is because the notice of tax Audit findings must reflect all findings generated during the Audit.

 

Thus, the incorrect completion of the Tax Return by the Taxpayer disclosed after the notice of tax Audit findings will cause the disclosure to not be reflected in the notice of tax Audit findings. In addition, the incorrect completion of the Tax Return disclosed after the notice of tax Audit findings does not reflect the disclosure of the incorrect completion of the Tax Return based on the Taxpayer’s self-awareness.

Paragraph (2)

Tax Payment Slips for the settlement of underpaid taxes and Tax Payment Slips for payments of administrative penalties must be attached if the disclosure of incorrect completion of the Tax Returns causes the underpaid tax to be higher. If the disclosure of incorrect completion of the Tax Returns does not result in a tax underpayment, such disclosure does not need to be attached with a Tax Payment Slip.

Paragraph (3)

Taxpayers being Audited disclose the incorrectness of the completion of a Tax Return in a separate report, the tax auditors must complete the Audit to prove the correctness of the separate report.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Deleted.

Paragraph (8)

Sufficiently clear.

Number 4

Article 10A

Sufficiently clear.

Number 5

Article 12

Paragraph (1)

A tax crime is an action subject to criminal penalties pursuant to tax-related laws, including the General Provisions and Tax Procedures Law, Law Number 12 of 1985 concerning Land and Building Tax as amended by Law Number 12 of 1994, Law Number 10 of 2020 concerning Stamp Duty, Law Number 19 of 1997 concerning Tax Collection Using Distress Warrant as amended by Law Number 19 of 2000 and Law Number 9 of 2017 concerning the Stipulation of Government Regulation in Lieu of Law Number 1 of 2017 concerning Access to Financial Information for Tax Purposes into a Law.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

A court decision with permanent legal force is the final decision on legal remedies undertaken for the exercise of tax rights and fulfilment of tax obligations. Therefore, the amount of tax payable or that should not be otherwise refunded conforms to the decision issued by the court.

Paragraph (4a)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Number 6

Article 14

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Deleted.

Paragraph (3)

Deleted.

Number 7

Article 15

Paragraph (1)

A Notice of Additional Tax Underpayment Assessment is issued if a notice of tax assessment has been issued with the type of tax and a Taxable Period, a Fraction of a tax year or a Tax Year that is the same as the Notice of Additional Tax Underpayment Assessment to be issued unless the notice of tax assessment that has been issued constitutes a Notice of Tax Overpayment Assessment in the context of the refund of tax overpayment which should not be otherwise payable as referred to in Article 17 paragraph (2) of the General Provisions and Tax Procedures Law.

 

In principle, to issue a Notice of Additional Tax Underpayment Assessment, it is necessary to conduct an Audit. If the previous notice of tax assessment was issued based on an Audit, it is necessary to conduct a re-Audit before issuing the Notice of Additional Tax Underpayment Assessment.

Paragraph (2)

Sufficiently clear.

Number 8

Article 16

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Deleted.

Number 9

Article 20

Sufficiently clear.

Number 10

Article 24

Paragraph (1)

Based on the self-assessment system, a Taxpayer’s tax obligations are determined by the fulfilment of subjective and objective requirements. Thus, a notice of tax assessment and/or Notice of Tax Collection for a Taxable Period, a Fraction of a Tax Year or a Tax Year before the Taxpayer is issued a Taxpayer Identification Number or is registered as a Taxable Person, may be issued if data and/or information is obtained indicating the existence of tax obligations that have not been fulfilled by the Taxpayer.

 

Example:

An individual Taxpayer was issued a Taxpayer Identification Number on 6 January 2021. As of 31 March 2022, the Taxpayer only files the Annual Income Tax Return for the 2020 Tax Year. In 2022, the Director General of Taxes obtains data indicating that the Taxpayer in the 2019 Tax Year accrued income above the Personal Tax Relief. Based on this data, the Director General of Taxes may issue a notice of tax assessment and/or Notice of Tax Collection for the 2019 Tax Year.

Paragraph (2)

A notice of tax assessment and/or Notice of Tax Collection may also be issued if after the deregistration of the Taxpayer Identification Number or VAT deregistration, data and/or information is obtained indicating that there are tax obligations that have not been fulfilled by the Taxpayer for the Taxable Period, Fraction of the Tax Year or Tax Year before or after the deregistration of the Taxpayer Identification Number or VAT deregistration.

 

Example:

An individual Taxpayer was issued a Taxpayer Identification Number on 6 January 2019. On 28 December 2021, the Taxpayer Identification Number is deregistered. In 2023, the Director General of Taxes obtains data showing that in the 2018 Tax Year, the Taxpayer accrued income above the Personal Tax Relief, in the 2020 Tax Year, the Taxpayer accrues income that has not been filed in the Tax Return of IDR100,000,000.00 and in the 2022 Tax Year, the Taxpayer accrues income above the Personal Tax Relief. Based on this data, the Director General of Taxes issues a notice of tax assessment and/or Notice of Tax Collection for the 2018, 2020 and 2022 Tax Years.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Number 11

Article 29

Deleted.

Number 12

Article 43

Deleted.

Number 13

Article 44

Deleted.

Number 14

Article 45

Deleted.

Number 15

Article 45A

Paragraph (1)

Sufficiently clear.

Paragraph (2)

An example of the application of the provisions under this paragraph:

 

Example 1:

A Notice of Tax Underpayment Assessment is issued with an outstanding tax of IDR1,000,000,000.00 for the Annual Income Tax Return for the 2021 Tax Year stating an overpayment with an application for a refund of IDR2,500,000,000.00.

 

In the Closing Conference, the Taxpayer disapproves of all outstanding taxes and agrees upon an amount of overpayment according to the Taxpayer of IDR1,500,000,000.00, thus, no payment is performed by the Taxpayer. For the objection filed by the Taxpayer, the Director General of Taxes issues an Objection Decision Letter stating that there is an overpayment of IDR1,600,000,000.00.

 

The tax overpayment refunded to the Taxpayer amounts to IDR1,600,000,000,00, which is the amount of overpayment stated in the Objection Decision Letter. In this case, the Taxpayer is given monthly interest compensation amounting to the reference interest rate applicable at the beginning of the calculation of the interest compensation divided by 12 (twelve) for a maximum of 24 (twenty-four) months calculated from the amount of overpayment approved by the Taxpayer in the Closing Conference of IDR1,500,000,000.00.00.

 

Example 2:

A Notice of Tax Underpayment Assessment is issued with an outstanding tax of IDR1,000,000,000.00 for the Annual Income Tax Return for the 2021 Tax Year stating an overpayment with an application for a refund of IDR2,500,000,000,00.00. In the Closing Conference, the Taxpayer disapproves of all outstanding taxes but the Taxpayer settles the Notice of Tax Underpayment Assessment before filing an objection. In addition, the Taxpayer agrees to the overpayment according to the Taxpayer of IDR2,000,000,000.00. For the objection filed by the Taxpayer, the Director General of Taxes issues an Objection Decision Letter by partially granting the Taxpayer’s objection, thereby, the amount of overpayment in the Objection Decision Letter becomes IDR1,250,000,000,00.

 

The tax overpayment refunded to the Taxpayer amounts to IDR2,250,000,000,00, which is the amount of overpayment stated in the Objection Decision Letter (IDR1,250,000,000.00) plus the Notice of Tax Underpayment Assessment that has been paid (IDR1,000,000,000.00). In this case, the Taxpayer is given monthly interest compensation amounting to the reference interest rate applicable at the beginning of the calculation of the interest compensation divided by 12 (twelve) for a maximum of 24 (twenty-four) months calculated from the amount of overpayment based on the Objection Decision Letter of IDR1,250,000,000.00.

 

Example 3:

A Notice of Tax Underpayment Assessment is issued with an outstanding tax of IDR1,000,000,000.00 for the Annual Income Tax Return for the 2021 Tax Year stating an overpayment with an application for a refund of IDR2,500,000,000.00. In the Closing Conference, the Taxpayer agrees that the outstanding tax amounts to IDR500,000,000,00.00. The Taxpayer settles the Notice of Tax Underpayment Assessment in the amount agreed in the Closing Conference before filing an objection. For the objection filed by the Taxpayer, the Director General of Taxes issues an Objection Decision Letter, thereby, the amount of overpayment in the Objection Decision Letter becomes IDR1,250,000,000,00.

 

The tax overpayment refunded to the Taxpayer amounts to IDR1,750,000,000,00, which is the amount of overpayment stated in the Objection Decision Letter (IDR1,250,000,000.00) plus the Notice of Tax Underpayment Assessment that has been paid (IDR500,000,000.00). In this case, the Taxpayer is not given interest compensation.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

“The date of issuance of the Appeal Decision” refers to the date the Appeal Decision is pronounced by the Tax Court judge in a public trial.

 

“The date of issuance of the Civil Review Decision” refers to the date the Civil Review Decision is pronounced by the Supreme Court judge.

 

Example 1:

A Notice of Tax Underpayment Assessment for the 2020 Tax Year is issued on 5 April 2022 and an objection is filed on 8 June 2022. If the Objection Decision Letter granting the Taxpayer’s request is issued on 10 May 2023, the calculation of the period as the basis for granting interest compensation pursuant to the provisions under this paragraph is from 5 April 2022 to 10 May 2023, namely for 14 (fourteen) months [13 (thirteen) full months, namely 5 April 2022 to 4 May 2023 plus a fraction of the month that is treated as 1 (one) full month, namely 5 May 2023 to 10 May 2023].

 

Example 2:

A Notice of Tax Underpayment Assessment for the 2020 Tax Year is issued on 5 April 2022 and an objection is filed on 10 May 2022. An Objection Decision Letter rejecting the Taxpayer’s application is issued on 5 January 2023. The Taxpayer files an appeal and an Appeal Decision that grants all of the Taxpayer’s application is pronounced by the Tax Court judge in a public trial on 20 March 2024 and is received by the Director General of Taxes on 10 May 2024. In this case, the calculation period as the basis for the granting of interest compensation pursuant to the provisions in this paragraph starts from 5 April 2022 to 20 March 2024, namely for 24 (twenty-four) months [23 (twenty-three) full months, namely from 5 April 2022 to 4 March 2024 plus a fraction of the month that is treated as 1 (one) full month, namely from 5 March 2024 to 20 March 2024].

Paragraph (8)

Sufficiently clear.

Paragraph (9)

Sufficiently clear.

Number 16

Article 60

Paragraph (1)

Sufficiently clear.

Paragraph (2)

A Preliminary Audit is intended to obtain preliminary evidence of an alleged tax crime. To obtain preliminary evidence, the Preliminary Audit can be carried out in a restricted or public manner.

 

A Preliminary Audit is different from an Audit because a Preliminary Audit has the same objectives as an Investigation as stipulated under the Criminal Procedure Code, namely to seek and find an event suspected of being a crime to determine whether or not an Investigation can be carried out.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

Subparagraph a

Sufficiently clear.

Subparagraph b

Sufficiently clear.

Subparagraph c

Sufficiently clear.

Subparagraph d

Sufficiently clear.

Subparagraph e

“Third parties” refer to other parties related to the actions, work, business or independent personal services of the Taxpayer subject to the Preliminary Audit, such as banks, public accountants, notaries, tax consultants, administrative offices, legal consultants, financial consultants, customers or suppliers.

Subparagraph f

Sufficiently clear.

Subparagraph g

Sufficiently clear.

Paragraph (6)

Sufficiently clear.

Paragraph (7)

Sufficiently clear.

Number 17

Article 62

Paragraph (1)

Sufficiently clear.

Paragraph (2)

If an alleged tax crime is related to Article 38 or Article 39 of the General Provisions and Tax Procedures Law, the losses to state revenues that must be settled amount to the tax that is unpaid or underpaid or which should not be otherwise refunded. On the other hand if an alleged tax crime is related to Article 39A of the General Provisions and Tax Procedures Law, the losses to state revenues that must be settled amount to the tax in the tax invoice, collection receipt, tax collection receipt and/or tax payment receipt.

 

The amount of the abovementioned tax is added with administrative penalties in the form of a fine of 3 (three) times the amount of tax that is not paid or underpaid or which should not be otherwise refunded or 3 (three) times the amount of tax the tax invoice, collection receipt, tax collection receipt and/or tax payment receipt.

Paragraph (2a)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Number 18

Article 63A

Paragraph (1)

Sufficiently clear.

Paragraph (2)

Sufficiently clear.

Paragraph (3)

Sufficiently clear.

Paragraph (4)

Sufficiently clear.

Paragraph (5)

In the context of providing convenience, Taxpayers may exercise their tax rights and fulfil their tax obligations electronically through an electronic system that can be integrated with the electronic systems organised by government agencies, institutions, associations and other parties.

 

Other parties referred to in this paragraph are parties other than government agencies, institutions and associations that can facilitate the exercise of tax rights and/or fulfilment of tax obligations through an administrative system organised by other parties but integrated with the administration system of the Directorate General of Taxes. For example, these other parties can facilitate online registration of taxpayers, online bookkeeping, online issuance of tax collection receipts and online filing of Tax Returns through an administrative system organised by other parties but integrated with the administrative system of the Directorate General of Taxes.

Paragraph (6)

Sufficiently clear.

Article 63B

Sufficiently clear.

Article 7

Sufficiently clear.

Article 8

Sufficiently clear.

Article 9

Sufficiently clear.

Article 10

Sufficiently clear.

Article 11

Sufficiently clear.

 

 

 

 

 

 

 

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6621