Tax Incentives for Taxpayers Affected by the Covid-19 Outbreak
- April 13, 2020
- Posted by: Administrator
- Category: Tax News
In order to maintain the stability of economic growth, people’s purchasing power, and productivity of certain sectors, affected by COVID-19 Pandemic, the Minister of Finance (MoF) issued Regulation No. 23/PMK.03/2020 (“PMK-23”) stipulating Tax Incentives, effective from 1 April 2020, with the salient points as follows:
A. Article 21 Withholding Tax Return (“Art. 21 Tax Return”)
The Incentive for Art. 21 Tax from the MoF is in the form of ‘Tax Borne by the Government” effective from the tax period of April to September 2020. This Art. 21 Tax Borne by the Government is for employees working in certain Corporate Taxpayers, who receiving /
obtaining annualized gross fixed and regular employment income in this relevant period amounting to IDR200,000,000 and has had NPWP. The eligible employers are the Corporate Taxpayers in the Business Group Code (‘KLU’) listed in the attachment integrated in the regulation (KLU from 10110 to 33200, including manufacturing industries, repair and maintenance service and assembly service), who have been designated for Import Facility for Export (Kemudahan Impor Tujuan Ekspor/‘KITE’) from the Directorate General of Custom and Excise (‘DJBC’). This relevant KLU has been stated and reported in the 2018 Corporate Income Tax Return.
Art. 21 Tax borne by the Government shall be given in cash to employee and not counted as taxable income for employee. To get this incentive, the qualified employer:
- should submit the Notification Letter in certain format;
- should issue the Tax Payment Slip stamped with “Art. 21 Tax Return suspended by the Government Eks PMK NUMBER … / PMK.03 / 2020”;
- should submit the Notification Realization Letter of Art. 21 Tax borne by the Government in the required format as stated in the attachment, together with the Tax Payment Slip, at the latest on 20 July 2020 for the Period of April to June 2020 and on 20 October 2020 for the period of July to September 2020.
B. Article 22 Withholding Tax Return (“Art. 22 Tax Return”)
Similar to Art. 21 Tax borne by Government facility, the facility of Art. 22 Import Tax exemption is provided for certain Corporate Taxpayers doing stipulated business and/or KITE Company. The exemption of Art. 22 Import Tax facilities is granted through Art. 22 Import Tax Exemption Letter for the Corporate Taxpayers (KLU 10432 to 31004 as listed in the attachment), and/or Corporate Taxpayers who have been designated as KITE Company. These companies should have stated and reported their KLU in the 2018 Corporate Income Tax Returns and submit a written application for Tax Exemption Letter of Art. 22 Import Tax referring to the required letter format as stipulated in the attachment.
Art. 22 Import Tax Exemption Letter is effective from the issuance date of exemption certificate until 30 September 2020. Taxpayers who have obtained a Tax Exemption Letter are required to submit a Realization Notification every 3 months as in the format on its appendix, together with the Tax Payment Slip, delivered at the latest 20 July 2020 for the Period of April to June 2020 and 20 October 2020 for the period of July to September 2020.
C. Article 25 Income Tax Installments (Art. 25)
For monthly Art. 25 Tax Instalment (‘Art. 25 Tax’) facility is 30% reduction effective from the period of April to September 2020. The eligible Corporate Taxpayers for this facility are similar with the Taxpayers eligible for Art. 22 Import Tax facility, i.e. whose KLU listed in attachment (10432 to 31004) and/or who have been designated as KITE Company. To obtain this facility, the Taxpayers should submit Notification Letter in the required format as in the attachment. The KLU should have been stated and reported in their 2018 Corporate Income Tax Returns. Detailed calculation on 30% reduction of Art. 25 Tax is provided in the related attachment.
The Taxpayers utilized this facility should submit the Realization Notification in the required format, attached with the Tax Payment Slip, delivered at the latest 20 July 2020 for the Period of April to June 2020 and 20 October 2020 for the period of July to September 2020.
D. Preliminary Refund for Value Added Tax
Facility for Value Added Tax (VAT) is Preliminary Refund, which is applicable for Corporate Taxpayers whose doing business as in KLU 10432 to 31004 or have been designated as KITE Company, and filed Monthly VAT Return with the tax overpayment at max. of IDR 5,000,000,000 (Five Billion Rupiah). These Taxpayers are categorized as low-risk VATable Entrepreneur (Art. 9 (4c) of the VAT Law) and shall be granted with the preliminary VAT Refund. In addition to that, for KITE Company, the KITE designation letter issued by the Ministry of Finance (MoF) should be attached to the Monthly VAT Return that is applied for preliminary VAT refund, from the effective date of this regulation (1 April 2020) up to September 2020 period (submitted the latest by 31 October 2020).
The procedure for preliminary VAT refund is in accordance with the prevailing MoF Regulation regarding Preliminary Refund (PMK-39).