Jumat, Maret 24, 2023

Government Introduces Technical Guidelines for the Collection, Deposit and Reporting of Article-23 Income Tax Deriving from Royalties

The government is aiming to further improve legal certainty and ease in relation to the collection of Article-23 income tax deriving from royalties ("Tax") that is received by domestic individual taxpayers who apply net income-based tax calculations ("Taxpayers"). As such, the Director-General of Tax has issued Regulation No. PER-1/PJ/2023 ("Regulation 1/2023"), which has been in force since 16 March 2023.
Any royalty-based income in any name or form that has been paid, that will be paid or that is not yet due for payment will remain subject to the collection of Tax for which the applicable rate is set at 15% of the non-value added tax gross value ("Value"). In this regard, the applicable Value for Taxpayers has been set at 40% of total royalty income.
The Tax itself should be collected by parties that have paid the royalty income and that are also acting as Tax collectors ("Collectors"), while the Taxpayers in question must submit proof of having received a notification that stipulates that a net income-based Tax calculation was used by the Collector prior to the commencement of the relevant Tax collection. In this regard, Regulation 1/2023 mandates that Collectors should implement the following matters: 1) Draft and provide Taxpayers with proof of Tax collection; 2) Deposit the collected Tax into the State Treasury; and 3) Report the Tax collection as a part of Unified Income Periodic Tax Returns (Surat Pemberitahuan Masa Pajak Penghasilan Unifikasi).
The abovementioned royalties that are subject to the collection of Tax must be reported as a part of annual tax returns (Surat Pemberitahuan Pajak – "SPT") that address domestic net income deriving from the free work section, while the amounts of said Tax should be classified as credited tax within the relevant Taxpayer’s SPT.

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The government is aiming to further improve legal certainty and ease in relation to the collection of Article-23 income tax deriving from royalties ("Tax") that is received by domestic individual taxpayers who apply net income-based tax calculations ("Taxpayers"). As such, the Director-General of Tax has issued Regulation No. PER-1/PJ/2023 ("Regulation 1/2023"), which has been in force since 16 March 2023.
Any royalty-based income in any name or form that has been paid, that will be paid or that is not yet due for payment will remain subject to the collection of Tax for which the applicable rate is set at 15% of the non-value added tax gross value ("Value"). In this regard, the applicable Value for Taxpayers has been set at 40% of total royalty income.
The Tax itself should be collected by parties that have paid the royalty income and that are also acting as Tax collectors ("Collectors"), while the Taxpayers in question must submit proof of having received a notification that stipulates that a net income-based Tax calculation was used by the Collector prior to the commencement of the relevant Tax collection. In this regard, Regulation 1/2023 mandates that Collectors should implement the following matters: 1) Draft and provide Taxpayers with proof of Tax collection; 2) Deposit the collected Tax into the State Treasury; and 3) Report the Tax collection as a part of Unified Income Periodic Tax Returns (Surat Pemberitahuan Masa Pajak Penghasilan Unifikasi).
The abovementioned royalties that are subject to the collection of Tax must be reported as a part of annual tax returns (Surat Pemberitahuan Pajak – "SPT") that address domestic net income deriving from the free work section, while the amounts of said Tax should be classified as credited tax within the relevant Taxpayer’s SPT.

......