Other Right of Taxpayer: Petition by a Taxpayer or a Tax Responsible Party

A petition by a taxpayer/tax responsible party against:

1. the execution of an Enforcement Order, confiscation or auction of assets;
2. a decision relating to the implementation of a tax decision, other than what is prescribed in Article 25 paragraph (1) and Article 26;
3. a decision on correction as provided for under Article 16 that relates to Tax Collection Letter (STP);
4. a decision as provided for under Article 36 that relates to Tax Collection Letter (STP); may only be submitted to a tax court. (Article 23-paragraph (2) Law No. 16 Year 2000).

Other Right of Taxpayer: Amendment of Tax Assessment Letter (SKP)

1. The Director General of Taxation on his own authority, or at the request of a taxpayer, may correct a Tax Assessment, a Tax Collection Notice, Decision Letter on objection, Decision Letter on reduction or cancellation of administration penalties, Decision Letter on reduction or cancellation of incorrect tax assessment, or Decision Letter on refund of initial tax overpaid, which contain errors in writing or calculation or errors in the application of specific provisions of the tax laws.
2. The Director General of Taxation, within 12 months from the date the application is received, must issue a decision on the application for correction.
3. When the period of time as prescribed in paragraph (2) has lapsed and the Director General of Taxation fails to issue a decision, the application shall be deemed granted. (Article 16 Law No. 16 Year 2000).

Other Right of the Taxpayer: Tax Overpayment

1. In the implementation of tax obligations the following may happen:
   
   • The total tax payable in a tax year is less than total tax paid or
   
   
   • The tax which is actually not due has been paid and therefore becomes a tax overpayment. (Article 17 Law No. 6 Year 1983)


2. There are 2 ways to request a refund for the above:
   
   
   
   • by submitting an annual tax return
   
   
   • by submitting a letter addressed to the Head of Tax Office requesting the refund.


3. After carrying out an examination or audit the Director General of Taxation will issue a Tax Overpayment Assessment (SKPLB) within twelve months after receiving the request for refund from taxpayer. If the issuance of Tax Overpayment (SKPLB) exceeds the time period specified, the request for a refund from the taxpayer shall be considered granted. (Article 17-paragraph (1) Law No. 6 Year 1983)
   


4. The tax overpayment based on the Tax Overpayment Assessment (SKPLB) shall be refunded, but where it appears that the taxpayer still has tax payable, the overpayment shall be directly used to settle the arrears first.(Article 11-paragraph (1) Law No. 16 Year 2000).
   


5. Upon issuance of the Tax Overpayment Assessment (SKPLB). The taxpayer has to provide information to the tax office to transfer the overpayment to him. The tax overpayment shall be paid within a maximum period of one month from the receipt of the above-mentioned information. (Article II-paragraph (2) Law No. 16 Year 2000).
   


6. If a refund of tax overpayment is delayed beyond one month, the Government shall pay interest of 2% per month on the late refund, calculated from the end of the time limit provided for in Article 11 paragraph (2) Law No. 16 Year 2000 up to of the date the refund is made. (Article 11-paragraph (3) Law No. 16 Year 2000).
   

Other Right of the Taxpayer: Installment or Postponement of Tax Payment

The Director General of Taxation, at the request of a taxpayer, may give his approval to the installment or postponement of tax payment, including underpaid taxes as prescribed in paragraph 2, for maximum period of 12 months. The implementation shall be confirmed by decree of the Director General of Taxation. (Article 9-paragraph (6) Law No. 16 Year 2000).

Other Rights of the Taxpayer : Amendment of a Tax Return

a. A taxpayer may on his own initiative amend a tax return that has been filed by submitting a written statement within two years from end of a tax period, part of a tax year, or a tax year, provided the Director General of Taxation has not started an audit.

b. Where the taxpayer amends the tax return himself resulting in an increase in the amount month of tax due, the taxpayer will be subject to a penalty of 2% (two percent) interest per month on the amount of tax underpaid, calculated from the filing due date of the tax return up to the date of payment resulting from amendment of the tax return.

c. If an audit has been done, but an investigation has not been conducted into wrong doing committed by a taxpayer, there shall be no investigation of the wrong doing of the taxpayer if the taxpayer on his own initiative discloses the errors and pays any tax underpaid along with a fine equal to twice the amount of tax underpaid.

d. If the period for amending a tax return as prescribed in paragraph (1) has lapsed, provided the Director General of Taxation has not issued a tax assessment, a taxpayer may on his own initiative disclose in a separate report nay inaccuracy in the completion of a tax return already filed, which causes:
i. the amount of tax payable to increase; or
ii. the loses based on the tax payable to increase; or
iii. the total assets to increase; or
iv. the total equity to increase.

e. Any tax underpayment arising from the disclosure of inaccuracies in completing a tax return as prescribed in article 8 paragraph (4) along with penalty of 50% of the amount of tax underpaid, shall be paid by a taxpayer before submission of the above report.

f. Although the period allowed for amending a tax return as referred to in paragraph (1) has lapsed and as long as the Director General of Taxation has not initiated an audit, a taxpayer may amend the annual income tax return already filed in either of these situations:
i. The taxpayer receives a Decisions Letter on an objection to a tax assessment of a previous year’s tax return and the amount of fiscal loss stated on the Decision Letter is different from the tax assessment; or
ii. The taxpayer receives a Decision Letter on an appeal to an objection to a tax assessment of a previous year’s tax return and the amount of fiscal loss stated on the Decision Letter is different from the amount stated on the Decision Letter on the objection.
This amendment should be done within 3 months after the Decision Letter on the objection or appeal is received. (Article 8 Law No. 16 Year 2000)

Other Rights of the Taxpayer : Extension of time to file the Annual Tax Return

The Director General of Taxation may, at the request of a taxpayer, extend the period for filing an annual tax return for a maximum period of 6 months.
The request shall be in writing and accompanied by a statement estimating the amount of tax due for 1 (one) tax year and proof of settlement of the tax due. (Article 3-paragraph (4) and (5) Law No. 16 Year 2000).


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Tax Auditing

The definition of auditing is a series of activities to search, collect and process data and/or other information within the scope of:

1. Supervising tax compliance in the following circumstances:􀁥 Where a tax return shows a refund to the taxpayer.
   
   • Where a tax return is not filed or the time at which it was filed was not stipulated.
   
   
   • Where a tax return meets the criteria determined by the Director General of Taxation.
   
   
   • Where there are indications that other tax obligations are not being fulfilled.


2. Meeting other objectives in the implementation of the provisions of the tax laws in the following circumstances:
   
   • The issuance of Tax Identification Number (NPWP).
   
   
   • The determination of the amount of monthly tax installment for a new taxpayer.
   
   
   • Where a taxpayer applies for an objection or appeal.
   
   
   • The collection of data for the compilation of the deemed tax calculation.
   
   
   • The verification of data/tools of information.
   
   
   • Other objectives in the scope of implementation of the provisions of the tax laws.
   
   
   
   

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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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Monthly and Annual Income Tax Return

After registering and obtaining the NPWP, a taxpayer has to file the following tax returns:

1. Monthly Article 25 income tax return using tax payment slips (SSP) at the latest 20 days from the end of the month. An individual who is not conducting a business or who is not an independent professional is exempted from filling the monthly returns.


2. Annual individual tax return (Form 1770) at the latest 3 months from the end of a tax year. The form 1770 can be obtained from the tax office. (Article 3-paragraph (3) Law No. 16 Year 2000).

What the taxpayer should know before completing the tax return:

1. Every taxpayer has to complete the tax return in Bahasa Indonesia using Latin Letters, Arabic numerals, and Rupiah currency, then sign and file it at the tax office where the taxpayer is registered. (Article 3-paragraph (1) and (1) a Law No. 16 Year 2000).


2. A taxpayer has to complete and file a tax return correctly, thoroughly and clearly. The tax return has to be signed. (Article 4-paragraph (1) Law No. 16 Year 2000).


3. Where a tax return is completed and signed by a person other than the taxpayer, a power of attorney must be attached. (Article 4-paragraph (3) Law No. 16 Year 2000).


4. Completion of annual income tax return by taxpayers who have to maintain bookkeeping records must be accompanied by financial statements in the form of balance sheet and income statement as well as other information required to calculate the amount of taxable income. (Article 4-paragraph (4) Law No. 16 Year 2000).


5. For filing of 2001 annual income tax return, a taxpayer has to attach a statement of assets and liabilities (MOF Decree No. 534/KMK.04/2000 dated December 22, 2000).


6. The filing of a tax return may be done by registered mail through the Post Office or by such other means as regulated by the decree of the Director General of Taxation. (Article 6-paragraph (2) Law No. 16 Year 2000).

Tax Identification Number (Nomor Pokok Wajib Pajak-NPWP)

1. What is a Tax Identification Number?

The Tax Identification Number (NPWP) is a number issued to taxpayers by the tax office to identify taxpayers and to assist them in fulfilling their tax obligations. (Article 1 - paragraph (1) Law No. 16 Year 2000).

2. How to get an NPWP ?

Taxpayer shall be obligated to register at the tax office in the district in which the taxpayer reside (Article 2-paragraph (1) Law No. 16 Year 2000) by submitting the following documents:

1. Registration and change of data form


2. Copy of passport


3. Copy of limited stay permit card (KITAS)


4. Copy of work permit (for taxpayer who is an employee)


5. Copy of tax identification number of the employer (for taxpayer who is an employee)


6. Power of attorney (if his/her registration process is done by another party)


7. Copy of business permit (for taxpayer who is conducting business or an independent professional)

An individual taxpayer who is an entrepreneur as mentioned in the Circular Letter of Director General of Taxation No.: SE-40/PJ.41/2000 is an individual who has several places of business activities. He/she is obligated to register in his/her place of business activities as
follows:

• A taxpayer who has several places of business activities in one operational area of the
  tax office must register each place of business in each related tax office.


• A taxpayer who has several places of business activities located in the districts
  of several tax offices must register each place of business in each related tax office.

3. What if taxpayer does not want to register?

• The Director General of Taxation has the authority to issue an NPWP officially. (Article 2-paragraph (4) Law No. 16 Year 2000)


• If a taxpayer fails to register intentionally resulting in loses to the state revenue, he/she shall be sentenced to imprisonment for period not exceeding 6 years and shall be subject to a fine for an amount not exceeding four times the tax unpaid/underpaid. (Article 39-paragraph (1) Law No. 16 Year 2000)

4. What if there is a change in taxpayer’s data?

A taxpayer may inform the tax office of any change in his data (such as change of address, change of employer, etc.) by filling the registration and change of data form at the tax office where the taxpayer is registered.

5. What if the taxpayer is leaving Indonesia permanently or has applied for an Exit Permit Only to the Immigration Office?

A taxpayer should state in writing that an Exit Permit Only (EPO) will be forwarded to the tax office where he is registered, so that the tax office will not issue a tax collection letter due to non filling or non payment of the monthly Article 25 income tax.

The following are to be attached when submitting the deregistration form (now known as registration and change of data form):

1. Exit Permit Only (EPO)


2. Statement from the employer stating that a taxpayer’s contract in Indonesia has ended (for a taxpayer who is an employee)


3. Cancellation of business permit letter (for a tax payer who is conducting business or is an independent professional)


4. Power of attorney (if his/her deregistration process is handled by another party)


5. Original copy of taxpayer identification number card

Before forwarding the EPO, the taxpayer should fulfill other tax obligation such as:

1. Pay any tax due which has not been paid.


2. File an annual individual tax return for the year of departure, by providing a close approximation of his/her global income.


3. File applications for deregistration of NPWP.

Individual Taxpayers Categorization

According to the CONSOLIDATION OF LAW OF THE REPUBLIC OF INDONESIA NUMBER 6 OF 1983 CONCERNING GENERAL PROVISIONS AND TAX PROCEDURES AS LASTLY AMENDED BY LAW NUMBER 16 OF 2000 (known as Undang-undang KUP), individual taxpayers categorized in two :

1. Resident
   A resident tax subject shall be:
   
   • An individual residing in Indonesia, or
     
   • An individual who is present in Indonesia for more than 183 days in any 12 month period, or
     
   • An individual who is present in Indonesia in a tax year with an intention to reside in Indonesia.
     
   
   
2. Non-Resident
   A non-resident tax subject shall be:
   An individual not residing in Indonesia or who is present in Indonesia for not more than 183 days in any 12 month period.
   
   • who is conducting a business or carrying out activities through a fixed based in Indonesia.
     
   • who derives income from Indonesia other than from conducting business or carrying out activities through a fixed based in Indonesia.
     

A taxpayer is an individual or a body which, pursuant to the provisions in the tax law, is required to fulfill tax obligations, including tax collection or tax withholding of certain taxes.
(Article 1 paragraph (1) Law No. 16 Year 2000).

Tax Definition

What is tax? We can find it's definition in several links below :

wikipedia.org

A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as unpaid labour. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government […] a payment exacted by legislative authority."^[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government […] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."

investorwords.com

A fee charged ("levied") by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax. The purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a consumer, there cannot be a market in the good or service, and so they need to be provided by the government or a quasi-government agency, which tend to finance themselves largely through taxes.