- The Director of Counseling, Services and Public Relations at the Directorate-General of Tax, Dwi Astuti ("Director"), has stated that in line with Regulation of the Government No. 55 of 2022 ("Regulation 55/2022") on the Adjustment of Provisions on Income-Tax (Pajak Penghasilan – "PPh"), taxpayers that take the form of micro-, small- and medium-scale enterprises (Usaha Mikro, Kecil dan Menengah/UMKM) will now be able to enjoy a final PPh rate of 0.5% of their gross business distributions ("Distributions").
- Pursuant to Regulation 55/2022, the Director has also affirmed that the above final PPh rate will apply during the following three periods: 1) For individuals: up to seven years; and 2) For non-limited-liability company business entities: up to four years; and 3) For limited-liability companies: up to three years.
- In addition to the expiration of said applicability periods, the Director has affirmed that the aforementioned final PPh rate will also become inapplicable if Distribution rates exceed Rp. 4.8 billion or if a given taxpayer voluntarily chooses to pay the normal PPh rate. Moreover, any taxpayers whose 0.5% final PPh rate period has expired will subsequently be required to resume payment of the normal PPh rate.
- It should also be noted that if a given taxpayer has a Distribution rate that remains below the Rp. 4.8 billion threshold at the end of the 0.5% final PPh rate period, then said taxpayer may calculate their net income through the application of the net-income calculation norms (Norma Penghitungan Penghasilan Neto/NPPN).
- For more on this story, see Hukumonline: “Simak! Begini Hak dan Kewajiban Perpajakan untuk UMKM”.
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