Tuesday, January 22, 2008

Bookkeeping/Recordkeeping

An individual taxpayer who is conducting a business or is an independent professional shall be obliged to maintain bookkeeping. However, an individual taxpayer who according to the provisions of the tax laws is permitted to calculate net income by using the Net Income Calculation Norm is not obliged to maintain bookkeeping. (Article 28-paragraph (1) Law No. 16 Year 2000).

A taxpayer who is allowed to calculate net income by using the Net Income Calculation Norm is an individual taxpayer with annual gross turnover less than Rp. 600,000,000.00 (six hundred million rupiah). (Article 14-paragraph (2) Law No. 17 Year 2000).

An individual taxpayer who is conducting business or is an independent professional with annual gross turnover of RP. 600,000,000.00 or more is obliged to maintain bookkeeping and if his/her annual gross turnover is less than Rp. 600,000,000.00 is obliged to maintain records, except if that taxpayer chooses to maintain bookkeeping. A taxpayer who has annual gross turnover less than Rp. 600,000,000.00 and does not choose to maintain bookkeeping, calculates his/her net income with Net Income Calculation Norm if he/she has informed the Director General of Taxation within the first 3 (three) months of
relevant tax year. (Article 1 of Decision Letter Director General of Taxation No. Kep-536/PJ./2000).

Recordkeeping must be done by:

a. An Individual taxpayer who is conducting business or is an independent professional, who is permitted to calculate his/her Net Income Calculation Norm; and

b. An individual taxpayer who is not conducting business or is not an independent professional. (Article 1 of Decision Letter of Director General of Taxation No. Kep-520/PJ./2000).

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