Taxpayer Identification, Validation of Taxable Entrepreneurs’, Tax Return and Procedure for Tax Payment

TAXATION LAW

Taxpayer Identification Number, Validation of Taxable Entrepreneurs, Tax Return and Procedure for Tax Payment

1. Taxpayer Identification Number (NPWP)
   

Article2 paragraph (1) of the CTP are as follows:

“Every taxpayer who have fulfilled the requirements of subjective and objective in accordance with the provisions of the tax regulations required to register with the Directorate General Taxation office whose jurisdiction includes there sidenceor domicile of the taxpayer and given hima Taxpayer Identification Number. ”

The function ofTIN

The function of TIN are as follows:

1. Taxpayer Identification Number is a tool in the tax administration used as identification of self or identity of Tax payers, therefore, to every taxpayer only given a Taxpayer Identification Number.
   
2. Taxpayer Identification Number is also used to maintain order in the payment of taxes and the tax administration over sight. In terms to related of the documents taxation, taxpayer sare required to include the Taxpayer Identification Number has.
   

Register to get TIN

All taxpayers based self assessment system must register itself to the office of the Directorate General of Taxation to be recorded as well as the taxpayer to get a TIN.
The obligation to register itself also apply to married women who are known tax separately, because live separately by the judge’s decision in writing or required by the income separation agreement and property .

Taxpayers Obligation to register and get a TIN

Taxpayers Obligation to register and get a TIN is as follows.

1. Agency
   
2. An individual who has income above the taxable income
   
3. Board, the Commissioner, and the Shareholders of the Company.
   

The pattern of TIN

Taxpayer Identification Number/Validation of Taxable entrepreneurs consists of15 digits are the first 9 digits is Taxpayer Code and the next 6 digits are the administrative code of taxation, for example:

60 . 810 . 616 . 1 – 104 . 000 ……………(as much as 15 digits)

        | | | |

        Taxpayer Code      Adm. Code

1. Validation of Taxable Entrepreneurs
   

In Article 2, paragraph (2) of KUP stated as follows.

“Every taxpayer as an entrepreneur who is taxed by the Value Added Tax Act, 1984 and amendments, shall report to the office of its Directorate General of Taxation whose jurisdiction includes the residence or domicile of the employer, and the business activities to be confirmed as Taxable.”

Taxable Entrepreneur must report the business to be confirmed as Taxable Entrepreneur

Every employer charged VAT under the provisions of tax laws, mandatory reporting to be confirmed as his business to validate as PKP and for him given validation of PKP.

Individual entrepreneurs are obliged to report his business at the Directorate General Taxs office whose jurisdiction covers the residence employers (if the residence is there business activity) and places of business done. whereas for Entrepreneurs agency whose jurisdiction covers the domicile of entrepreneurs with a business activities.

Enrollment period or reporting activities

Some matters relating to the period of registration or reporting activities are as follows.

1. Individual taxpayers engaged in business or professional services and corporate taxpayers, must register to obtain a Taxpayer Identification Number within one month after the current business starts.
   
2. Individual taxpayers who do not run businesses or independent, when up to a month to earn that amount exceeds one year exemption, Registering required to obtain a Taxpayer Identification Number no later than the end of next month.
   
3. Individual taxpayer other than the above (1 and 2) which requires a Taxpayer Identification Number to apply for a Taxpayer Identification Number.
   
4. Individual taxpayer conducting business or professional services and the taxpayer is required to report its loss to be confirmed as a Tax able before, entdelivery of goods or tax able services for the meet as Taxable.
   
5. Taxpayers as a small business as referred to in the law of value added goods and services and sales taxon luxury goods.
   
6. Taxpayers who do not perform their obligations as above (1,2,3,4and 5) issued Taxpayer Identification Number and/or Taxable Employer.
   

Place of registration for certain taxpayers and Place of Business Reporting for Certain Employers subject to tax.

1. Particular taxpayer and employer are taxable particular taxpayer and Taxable is as follows.
   
   1. State-Owned Enterprises
      
   2. Regional-Owned Enterprises
      
   3. Foreign Investment
      
   4. Permanent Establishment and Foreigners
      
   5. Listed Companies
      
2. Certain individual taxpayer is a taxpayer who has a place of business spread across multiple places.
   

   Place of registration and reporting of business is Tax Services Office whose jurisdiction covers housing and the tax office whose jurisdiction covers the business activities.
   

3. New taxpayers are required to register to obtain tax Taxpayer Identification Number and report its business as a Taxable entrepreneurs on or after January 1, 2001.
   

   For new taxpayers domiciled outside the Jakarta Capital Special Region may choose to enroll in the tax office whose jurisdiction covers the domicile.
   

The Functions of Taxpayer Identification Number and Validation of Taxable Entrepreneur
TIN functions, are as follows.

1. The ingredients in the tax administration
   
2. Taxpayer identity
   
3. Preserve order payment of taxes
   
4. Included in any tax documents
   

The function of validation of taxable entrepreneurs

1. Used to determine the identity of the actual Taxable
   
2. To exercise the rights and obligations in the field of value added tax and sales taxon luxury goods as well as for monitoring of tax administration
   

The Benefits of Taxpayer Identification Number and Validation of Taxable Entrepreneur

The Benefits of Taxpayer Identification Number is as follows.

1. To obtain a interest loan from the bank
   
2. To facilitate dealing with the agency that requires TIN lists, such as the immigration office, customs office, KPKN office, PLN office , Telkom offices, and so on.
   

The Benefit of Validation of Taxable Entrepreneur

1. To be partners with the government in the register/ obtain tenders of government projects
   
2. To obtain payment from KPKN and so on.
   

The Penalty

Against taxpayers who do not sign up to get the tax ID and entrepreneurs who have been qualified as PFM but did not report his business to be validated as PKP penalized according to the tax legislation.

The requirements to obtain a TIN and PPKP

TIN registration and once PPKP can be done by fillingina registration form and sign the Tax Office(KPP) or then earnest Tax Extension Office, are as follows.

1. Form with the KP.PDIP.4.1 forms for the Taxpayer Privacy
   
2. Form with the KP.PDIP.4.2formforthe Taxpayer
   
3. Form with the KP.PDIP.4.3 forms for Taxpayer collector/cutter
   

   By attaching copy of the documentation the form below.
   

4. For individual tax payers non-entrepreneurs
   
   1. Copy of ID card /Family/Passport
      
5. For individual taxpayers entrepreneurs
   
   1. Copy of ID card /Family/Passport
      
   2. Photocopy of Business License Information The Business and the relevant authorities.
      
6. For the taxpayer agencies
   
   1. Copy of the deed of establishment
      
   2. Identification card,one of the administrators
      
   3. Photocopy of Business License Information The Business and the relevant authorities.
      
7. For treasurer as collector/cutter
   
   1. Photocopy of the appointment as treasurer
      
   2. Photocopy of proof of identity Card /Family Card/ Driving License /Passport
      
8. If the required tax status of the applicant branch, it must attach a photocopy of TIN card or proof of enrollment head quarters taxpayer. if the petitions signed by someone else, needs to includea power of attorney. Photocopy of the complete application form to the above taxpayer must be ratified by the Taxpayer Registration Officer exceptin the case of registration is done by mail,the copy must be certified by officers /authorities.
   

Procedures for registering and reporting of business

Procedures for registering and reporting are as follows:

1. Fill out the registration form and attaching the completeness
   
2. Deliver in person or by mail to the Tax Office/Local Tax Extension Office or sent by registered mail to the post office.
   

Obligations after obtaining TIN and PPKP

1. Obligations relating to income tax (income tax) are:
   
   1. Payment of taxes
      
   2. tax collection
      
   3. tax payment
      
   4. tax reporting
      
2. Liabilities related to value added tax (VAT) and sales tax on luxury goods (PPnBM) among others
   
   1. Payment/remittance of taxes
      
   2. tax invoice
      
   3. Reporting tax already paid
      

Removal of TIN and Revocation validation of taxable entrepreneurs

Removal of Taxpayer Identification Number by the Director General of Taxes, if:

1. Removal petition filed Taxpayer Identification Number by the taxpayer and /or their heir sif the taxpayer is not eligible subjective and/or objective in accordance with the provisions of tax laws;
   
2. Taxpayers due to termination or liquidation agencies merger
   
3. Taxpayers permanent establishment to stop its operations in Indonesia, or
   
4. Deemed necessary by the Director General of Taxation to abolish the Taxpayer Identification Number of the taxpayer is not eligible subjective and/or objective in  the provisions of tax laws.
   
5. Director General of Taxation because of the position or the Taxpayer may request revocation Taxable Employer.
   

1. Tax Return and Procedure for Tax Payment
   

Tax Payment

In a system of self assessment tax shall have to calculate, calculate, pay, and report their own tax obligations to the Tax Office or Tax Counseling Office. Tax payments made ​​using the Tax Payment (SSP) and for reporting using the Notice (SPT). By Similarly as follows.

1. Every taxpayer pays the tax due in accordance with the provisions of tax laws by not relying on the tax assessment.
   
2. Amount of tax payable by a notice delivered by the taxpayer is the amount of tax payable in accordance with the provisions of tax laws.
   
3. If the Director General of Taxation have evidence the amount of tax payable according to the untrue, the Director General of Taxation sets the amount of tax payable.
   

Letter of Tax Payment

Letter of Tax Payment (SSP) is a letter used by the taxpayer for the payment or remittance of taxes owed to the treasury through the Post Office and/or the state-owned banks or bank-owned enterprises or other payment point appointed by the minister of finance. SSP is divided into two, is as follows:

1. Standard SSP is a letter that is used by the taxpayer or serves to make the payment or deposit of tax payable to the Payee’s Office and used as proof of payment.
   
2. Special SSP is a proof of payment or remittance of taxes payable to the Payee Office printed by the Payee using transaction engine and /or other devices in accordance with the content specified in the Decree of Directorate General Taxation and has the same functionality as the standard SPP in tax administration.
   

The Function

SSP is a form used as a means to pay taxes and a tax receipt.

Place of payment of tax

Place of payment of taxes, among others are as follows:

1. post office
   
2. State-owned banks or bank-owned enterprises
   
3. Another place determined by the Minister of Finance
   

Grouping of tax payments

Tax payment scan be grouped into:

1. payment period
   
2. Payment of tax short fall after the end of the tax year/part of a tax year
   
3. Payments due to  Collection, Tax Under payment Letter, Letter Additional Tax Under payment, Correction decree, Decree Objection, Appeal Decision
   

Installment and Delays Tax Payments

Taxpayers may apply in writing to the following matters.

1. Installments or defer payment of tax due in the Tax Collection,the letter of Tax Underpayment , the etter of Additional Tax Underpayment, Correction decree, Decree Objection, Appeal Decision causing increased amount of tax payable.
   
2. Income Tax Article 29, to the Director General of Taxes in this case the Tax Office where the taxpayer is registered, if the taxpayer or a liquidity problem experienced circumstances beyond their authority, so cannot meet their tax obligations on time.
   

Taxpayers who apply must meet the following requirements.

1. Willing to provide a guarantee in the amount determined by consideration of the Head of the Tax Office, unless the Head Office considers unnecessary tax.
   
2. Has no tax arrears due.
   

If the application is received shall be wholly or in part the Tax Office on behalf of the Director General of Taxation issued:

1. Installment Payment of Taxes Decree with the installment:
   
   1. Maximum of 12 months from the issuance of the decision to the application as is number 1;
      
   2. Most long until the last month of the tax year subsequent to the application as referred to item 2, the amount equal installments every month by using the form as set out in the decision of the Director General of Taxation.
      
2. Delay Payment of Taxes Decree with the delay:
   
   1. Maximum of 12 months from the issuance of the decision, to the application referred to number 1
      
   2. The period of 3 months from the end of the time limit for the submission of the Annual petition referred to as number 2 by using the form as stipulated in Decree DG taxes.
      

Decisions on installment or deferred payment tax as follows:

1. Director general of taxation issued a decree on the request to move or postpone the payment of tax payable in the form of wholly or partially accept or rejection within 10 days of receipt of the application complete.
   
2. If the period of 10 days from receipt of the application completely gone by, the Director General of Taxes has not given a decision, the application is considered acceptable tax payer.
   
3. Installment or delay tax payments may only be submitted one time for any taxes owed
   
4. Future installments or delay granted does not exceed a period of 12 months.
   

Taking tax overpayment

Matters relating to the return of overpaid taxes, are as follows.

1. At the request of taxpayers, tax overpayment refunded, provided that if it is found taxpayers have tax debt, directly calculated to pay off the tax debt first.
   
2. Excess tax payments as a result of the decree objection, correction decree, Decree Reducing Administrative Sanctions, Administrative Sanctions Removal Decree, Decree Deductions Tax Assessment, Tax Decree cancellation provisions, and Decision Appeal or Judicial Decisions, as well as the provision of Decree Benefits Flowers returned to the taxpayer with the provision if it has the taxpayer the tax debt.
   
3. Refund excess tax payments made later than 1 month after the application for refund of tax overpayment received in connection with the issuance of Tax Overpayment, or since introduce objection decree, Decree of Correction, Administrative Sanctions Decree Deduction, Decree of Removal of administrative sanctions, Decree Reduction of Tax Assessment, Tax Assessment Cancellation decree or decree Rewarding Flowers, or the receipt of the appeal ruling or decision of a judicial review, which led to excess payment of tax.
   
4. If the refund excess tax payments made after a period of 1 month the government provides reward interest of 2% per month for late refund of tax overpayment, calculated from the time limit according to the number (3) ended up with a time of excess returns.
   
5. Director General of Taxation after scrutiny of the application for tax refund, in addition to the preliminary request refund overpaid taxes from the taxpayer, tax assessment should be issued later than 12 months from receipt of a complete petition. This provision does not apply to taxpayers who were examined crime in taxation.
   
6. If after a period of 12 months beyond the Director General of Taxes has not given a decision, the application for refund of tax overpayment be granted for a maximum of 1 month after the long time away ends.
   

Preliminary Decree Excess Tax Returns

Matters relating to the Decree of Introduction Excess Tax Returns, as follows.

1. Director General of Taxation after doing research on the application more of the tax return Taxpayers with certain criteria, he issued a decree Introduction Excess Tax Returns a maximum of 3 months from receipt of a complete request for income tax, and a maximum of 1 month after receipt of a complete request for tax value added.
   
2. Certain criteria may include:
   
   1. Timely submit the notification
      
   2. Has no tax arrears for all types of taxes, unless the delinquent taxes that have obtained permission to move or postpone the payment of taxes
      
   3. The financial statements audited by a public accountant or a financial supervisory agency to receive government unqualified for 3 consecutive years;
      
   4. Never convicted of a crime in the field of taxation based on court decisions that have been legally binding for a period of 5 years
      
   5. Taxpayers with certain criteria applied by the decision of the Director General of Taxes.
      
3. A taxpayer may be given refund of tax overpayment is preliminary;
   
   1. Individual taxpayers who do not run businesses or independent
      
   2. Individual taxpayers who run businesses or work freely with business turnover or the number of over payments up to a certain amount.
      
   3. Corporate taxpayers with business turnover and the amount of the overpayment to a certain amount
      
   4. Employers taxable submit the notice period with the amount of value added tax and delivery to pay the amount over a certain amount.
      
   5. Limitation of business turnover, number of deliverable s, and the amount of the overpayment referred to in paragraph (2) shall be regulated by or under the rules of the finance minister.
      
4. Director General of Taxation to conduct an examination of the taxpayer to certain criteria, and issue an assessment after a preliminary return of excess taxes.
   
5. If the results of the examination, the Director General of Taxation issued the underpayment of tax assessment, tax shortfall amount plus administrative sanctions such as an increase of 100% of the amount of the underpayment of tax.
   
6. Taxpayers with certain criteria cannot be given a preliminary return of overpaid taxes if:
   
   1. To the taxpayer for action in criminal investigations in the field of taxation.
      
   2. Late in submitting the notice period for a particular tax type two consecutive tax periods.
      
   3. Late in submitting the notice period for a particular tax type three tax periods greeting one calendar
      
   4. Late in submitting the annual notice.