The Advantage of Tax Amnesty in Indonesia

THE ADVANTAGE OF TAX AMNESTY IN INDONESIA

1. TAX AMNESTY

Tax Amnesty or Tax Amnesty is the elimination tax which should be payable, not subject to tax administration sanctions and criminal sanctions in the field of taxation, by disclosing the Property and paying the Ransom as regulated in this Law.  Legal basis: Article 1 number 1 of Law No 11 Year 2016. (source : http://www.lembagapajak.com/)

1. TAX AMNESTY BACKGROUND

Background of Amnesty Tax or why Indonesia needs to give tax amnesty to taxpayers (taxpayers) are as follows:

• The First Cause why Indonesia implements Tax Amnesty is because there are Property owned by citizens both inside and outside the country that have not yet been fully reported in the Annual Income Tax Return.
• Tax Amnesty is to increase state revenue and economic growth as well as public awareness and compliance in the implementation of tax obligations, need to issue a policy of Tax Amendment.
• Uncertainty of monetary policy.

 (source : http://www.lembagapajak.com/ and http://www.pajak.go.id/content/amnesti-pajak)

1. PURPOSE OF TAX AMNESTY

• To increase a tax revenue in the short term.
• To increase the number of taxpayers.
• To integrate an informal sector into the economic system.
• To take advantage of an unused fund.
• The first step of a new regime's policy to apply greater sanctions.

(source : http://www.gurupendidikan.co.id/)

1. SUBJECT OF TAX AMNESTY

The subject of tax amnesty is a Taxpayer (Indonesian citizen who already has Tax Registration Number or not), who has not reported detailed assets to the country (may be a house, vehicle, savings, etc.) whether an individual, a company or a business entity. The following, however, cannot receive a Tax Amnesty:

1. taxpayers being investigated for tax crimes whose investigation files have been declared complete by the public prosecutor’s office;
2. taxpayers in judicial proceedings for tax crimes; or
3. taxpayers serving a criminal sentence for tax crimes.

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        (source : http://taxamnestyindonesia2016.blogspot.co.id/2016/08/subjek-dan-objek-tax-amnesty.html)

Exception:

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(sourece : http://www.pajak.go.id/sites/default/files/Handout-Materi-Amnesti-Pajak.pdf)

1. OBJECT OF TAX AMNESTY

The object of tax amnesty is the tax obligation that has not been or has not been fully resolved by the Taxpayer, which is represented in the asset that has not been reported in the Annual Income Tax Return.

Tax forgiveness is given to the Taxpayer through the disclosure of the Property held in the Statement Letter. (source : http://www.pajak.go.id)

1. STEPS OF FOLLOWING TAX AMNESTY

1. REVEAL.

Reveal all of the assets or property that have not been fully reported in the Annual Tax Income.

1. REDEEM.

Redemption Money and Rates,

To receive a Tax Amnesty, taxpayers must pay Redemption Money, which is calculated by multiplying the applicable tax rate by the net value of Assets not disclosed in the last annual income tax return (i.e., the 2015 tax return). Details on the applicable tax rates for the calculation of Redemption Money in the Tax Amnesty Law are as follows:

1. For onshore Assets and repatriated offshore Assets:

1. 2% for the first month up to the third month as of the enactment of the Tax  Amnesty Law;
2. 3% for the fourth month up to December 31, 2016;
3. 5% for January – March 31, 2017.

1. For non-repatriated offshore Assets:

1.  4% for the first month up to the third month as of the enactment of the  Tax Amnesty Law;
2.  6% for the fourth month up to December 31, 2016;
3. 10% for January – March 31, 2017.

1.  For small business enterprises (having annual turnover up to IDR 4.8 billion):

1. 0.5% for Taxpayers declaring Assets with a value of up to IDR 10 billion;
2. 2% for Taxpayers declaring Assets with a value of more than IDR 10 billion

(source : http://blog.ssek.com/index.php/2016/08/what-you-need-to-know-about-the-indonesian-tax-amnesty-law/)

1. RELIEVE.

After Reveal and Redeem our assets or property, we feel relieved because we will receive elimination of taxation administrative sanctions in the form of interest and fines.