Tax payment and filing of tax return must be taken either periodically or annually, depending on the category of tax. Failure to deposit or file tax return will incur administrative sanction, therefore, businesses must understand their tax obligations. This article will provide an overview of Indonesian regulation regarding tax payments, tax reports, and fines.
Governing law and regulations
- Law No. 6/1983 on General Provisions and Procedures of Tax and its amendments
- Regulation of The Minister of Finance (Permenkeu) No. 242/PMK.03/2014 on Procedures for Paying and Depositing Taxes
Tax collection system in Indonesia
Tax regulations in Indonesia recognized three tax collection systems which are a self-assessment system, official assessment system and withholding system.
Self Assessment System is a tax collection system that imposes the determination of the amount of tax that needs to be paid by the taxpayer concerned. Taxpayers play an active role in calculating, paying and reporting the amount of their tax to the Tax Office (KPP) or through an online administration system that has been created by the government. The self-assessment system is applied to the types of central taxes, for example, the types of Value Added Tax and Income taxes.
The Official Assessment System is a tax collection system that imposes the authority to determine the amount of tax owed to the tax authorities or tax authorities as tax collectors. This tax collection system can be applied in the settlement of Property Tax (PBB) or other types of local taxes. Taxpayers no longer need to calculate the tax payable but only need to pay PBB based on the Tax Return Payable Letter (SPPT) issued by the KPP where the tax object is registered.
In the Withholding System, the amount of tax is calculated by a third party who is not a taxpayer and is not a tax officer/tax authority. Employees no longer need to go to the KPP to pay the tax because the employee’s income deduction will be carried out by the treasurer of the relevant agency. The types of taxes that use the withholding system in Indonesia are PPh Article 21, PPh Article 22, PPh Article 23, Final PPh Article 4 paragraph (2) and VAT.
Tax payment
Based on Permenku No. 242/2014, tax payments should be made to the state treasury through:
- Electronic System (https://sse.pajak.go.id), and/or
- service at the counter / teller (over the counter) at an appointed tax payment bank.
Several forms of taxes have to be periodically deposited, while others are annually deposited.
Tax report
When filing a tax return, every taxpayer must fill out the Tax Return Form (SPT) in Indonesian language, using Latin letters, Arabic numerals, IDR currency and sign it as well as submit it to the Directorate General of Taxes (DGT) office where the taxpayer is registered or validated.
Taxpayers who have received permission from the Minister of Finance to conduct bookkeeping using foreign languages and currencies other than Rupiah should submit SPT in Indonesian language by using the permitted currencies other than Rupiah.
There are some documents that may be needed to be attached along with the SPT.
Taxpayers will either report SPT periodically or annually, depending on the form of tax obligation it has. Company taxes that must be reported every month include PPh Article 21, PPh Article 22, PPh Article 23, PPh Article 25, PPh Article 26, PPh Article 4 (2), PPh Article 15 as well as Value Added Tax (VAT) and Luxury Goods Sales Tax (LGST). Meanwhile corporate income tax and individual income tax is an annual tax return.
E-Filing
e-Filing is a way of reporting SPT that is done electronically or online through the website of the DTG, as well as through other official e-Filing channels determined by the government. Certain forms of SPT must be reported through e-Filing.
To be able to do e-Filing, here are the conditions you must have:
- EFIN / Electronic Filing Identification Number
- Electronic documents / electronic SPT
- Access to e-Filing web
EFIN is needed so that taxpayers can carry out tax transactions online. If the taxpayer already has EFIN and e-invoice electronic certificates, there is no need to submit another EFIN application.
Types of Taxes and Deadlines
Types of taxes that need to be periodically deposited and filled are as follows:
| Type of tax | Tax Payment Deadline | Tax Return Filing Deadline |
| Article 21/26 Income tax | the 10th of the following month | the 20th of the following month |
| Article 23/26 Income tax | the 10th of the following month | the 20th of the following month |
| Article 25 Income tax | the 15th of the following month | the 20th of the following month |
| Article 22 Income tax – Tax Collector | the 10th of the following month | the 20th of the following month |
| Article 4(2) Income Tax | the 10th of the following month | the 20th of the following month |
| Article 15 Income Tax | the 10th of the following month | the 20th of the following month |
| VAT and LST – Taxable Enterprise | prior to the tax return filing deadline | the end of the following month |
| VAT and LST – VAT Collector | Vary depends on the type of Tax Collector | Vary depends on the type of Tax Collector |
Below are the types of taxes that need to be deposited and filled annually:
| Type of tax | Tax Payment Deadline | Tax Return Filing Deadline |
| Corporate income tax | Before filing tax return | Maximum of 4 months after the end of the tax year |
| Individual income tax | Before filing tax return | Maximum of 3 months after the end of the tax year |
| Land and Building Tax. | 6 months after the receipt of a Tax Due Notification Letter (SPPT) from the regional Government. |
For annual income tax returns, it is possible to postpone the filing deadline. The taxpayers may extend it by up to two months by filing a written notification to the ITA prior to the deadline together with a tentative tax calculation.
All tax reports and documents must be sent to the local tax office, where the main head office is.
Failure to deposit and report
If late payments or reports occur, the taxpayer is subject to administrative sanction. In the event of late payments occurring for the above taxes (made after the due date of payment or tax deposit), an interest penalty at 2% per month will be imposed, calculated from the due date of the payment until the date of the payment. A single day late is considered as a full month late.
Late filing of SPT or failure to file SPT will also incur an administrative penalty at a specific amount:
| Type of SPT | Fine amount |
| Value Added Tax SPT | IDR 500,000 tax return period and IDR 100,000 per tax return period for tax returns with other periods. |
| Individual income SPT | IDR 100,000 per tax return period |
| Corporate income SPT | IDR 1,000,000 per annual tax return |
The penalty for late payment of taxes is 2% per month from the time the tax fees have not been paid. The penalty for late payment of taxes has a time calculated from the due date to the date of payment of the tax. If you are late in paying from the deadline, the penalty payment count is calculated as 1 full month.
