Self-assessment tax system
System Taxation in indonesia is a self-assessment. this is system which means that taxpayers are responsible for calculating and reporting their own tax liability to the Directorate General of Taxes (DGT). DGT is a directorate/ department under the Ministry of Finance. Under the self-assessment system, taxpayers are required to file an annual tax return and pay any tax due by the deadline specified by the DGT. The tax return must include accurate and complete information about the taxpayer’s income, deductions, and credits.
Taxpayers are also responsible for ensuring that they comply with all relevant tax laws and regulations, and for keeping accurate records of their income and expenses. The DGT may conduct audits or examinations to verify the accuracy of the information provided by taxpayers. To help taxpayers meet their tax obligations, the DGT provides guidance and support, including online resources, training programs, and consultation services.
The DGT also offers a variety of tax incentives and exemptions to encourage compliance and investment in the country.
The General Provisions and Procedures of Taxation
The General Provisions and Procedures of Taxation in Indonesia (Ketentuan Umum dan Tata Cara Perpajakan or KUP) is a regulation that governs the rules and procedures for taxation in Indonesia. It is based on the Indonesian Law No. 6 of 1983 on General Provisions and Procedures of Taxation and has been amended several times since its enactment.
The KUP covers a wide range of tax-related topics, including:
- Definitions of tax subjects, income, taxable objects, and tax obligations.
- Procedures for tax collection, payment, and reporting.
- Requirements for the preparation of tax returns and related documents.
- Provisions for tax assessment, objection, and appeal.
- Enforcement procedures for the collection of taxes, penalties, and interest.
- Procedure for tax reduction and vaive.
- Penalties and sanctions for non-compliance with tax laws and regulations.
The KUP also sets out the roles and responsibilities of the tax authorities, taxpayers, and tax professionals in the implementation of the tax system in Indonesia.
It is essential for taxpayers to be familiar with the provisions and procedures of the KUP to ensure compliance with Indonesian tax laws and regulations. Any failure to comply with these rules and procedures may result in penalties and sanctions, including fines, interest, and even criminal charges.
Tax Assessment
In Indonesia, tax assessments are done by the Directorate General of Taxes (DGT) under the Ministry of Finance. The DGT is responsible for managing and enforcing the tax laws in Indonesia.
To determine tax liability, the DGT will assess the taxpayer’s income, deductions, and credits. This assessment is usually done through the taxpayer’s annual tax return, which must be filed by the end of third month and fourth month after calendar year or book period for individual taxpayer and corporate tax payer.
The tax assessment process involves the DGT reviewing the tax return and verifying the accuracy of the information provided by the taxpayer. The DGT may also conduct an audit or examination of the taxpayer’s books and records to ensure compliance with tax laws.
Tax Assessment result
| Surat Ketetapan Pajak Kurang Bayar (SKPKB) | Surat Ketetapan Pajak Kurang Bayar (SKPKB)is an Indonesian term that translates to “Notice of Underpayment”. It is a notification issued by the tax authority to a taxpayer, informing them of the amount of tax that they owe due to a tax assessment. After conducting a tax assessment, the tax authority may determine that the taxpayer has not paid the full amount of tax that they owe. . In this case, the tax authority will issue a SKPKB to inform the taxpayer of the amount of tax that is due and must be paid. The SKPKB includes details of the tax assessment, such as the tax period, the taxable income, the tax rate, and the amount of tax due. It also specifies the due date for payment of the outstanding amount, and any penalties and interest. Once the assessment is complete, the DGT will issue a tax bill to the taxpayer, which must be paid within a specified time frame. Failure to pay the tax bill may result in penalties and interest charges. |
| Surat Ketetapan Lebih Bayar (SKLB) | Surat Ketetapan Lebih Bayar (SKLB) is a document issued by the tax authorities in Indonesia that informs taxpayers that they have overpaid their taxes. It is also known as a tax overpayment notice. When a taxpayer pays more tax than they owe, the tax authorities will issue an SKPLB to notify the taxpayer of the excess payment. The taxpayer can then use the SKLB to request a refund of the excess payment or to offset the excess payment against any future tax liabilities. |
| Surat Ketetapan Pajak Nihil (SKPN) | Surat Ketetapan Pajak Nihil (SKPN) is a document issued by the tax authorities in Indonesia that informs taxpayers that they have no outstanding tax liabilities. It is also known as a tax assessment letter with a zero tax amount. The SKPN is issued when the tax authorities have completed their tax assessment of the taxpayer’s returns and have determined that no additional tax is owed. The SKPN serves as proof that the taxpayer has fulfilled their tax obligations for the assessed period. |
The taxpayer has the right to object to the above tax assessment result if they believe that the assessment is incorrect or unfair. They can file an objection with the tax authority within a certain period of time, and the tax authority will review the objection and make a decision based on the evidence provided.
Take a note that Tax regulation in Indonesia are subject to changes and updates, so taxpayers should regularly monitor any updates or changes to tax laws and regulations that may impact their tax obligations.
It is important for taxpayers to understand their obligations under the self-assessment system and to seek professional advice if necessary to ensure compliance with tax laws and regulations. Failure to comply with tax laws may result in penalties and interest charges.