Friday, July 30, 2010

Income Tax Article 26

Income Tax Article 26 is imposed from Pengahsilan tax income derived from Indonesia received or accrued by the taxpayer (WP) in addition to foreign permanent establishment (PE) in Indonesia.

who picked Article 26?
- Government;
- The subject of domestic tax;
- Organizers of activity;
- Fixed entity BUT;
- Representatives of foreign companies in Indonesia other than PE.

Income Tax Rates and object of Article 26

  1. 20% (final) of the total gross income received or accrued from the State Tax Payer:
    b.bunga, premiums, discounts, swap premiums, and benefits relating to the guarantees of loan repayments;
    c. royalties, rents, and miscellaneous income in connection with the use of property;
    d. benefits relating to services, employment, and activities;
    e. prizes and awards
    f. pensions and other periodic payments.
  2. 20% (final) from the net income estimate of:
    a. Income from property sales in Indonesia;
    b. insurance premiums are paid reinsurance premiums, directly or through brokers to insurance companies abroad.
  3. 20% (final) from the Taxable Income after deduction of tax from a PE in Indonesia, except that income reinvested in Indonesian.
  4. Rates based on Double Taxation Avoidance Agreement (P3B) between Indonesia and the countries parties to the agreement.

When payable, How to Withholding, Deposit, and Article 26 Tax Income Tax Return

  1. Article 26 Income tax payable at the end of the month or late payment of income become due, depending on whichever comes first.
  2. Tax collectors Article 26 shall make proof of withholding income tax under Article 26 copies of 3:
    - The first sheet for foreign taxpayers;
    - The second sheet for Tax Services Office;
    - The third sheet cutters for archives.
  3. Income tax under Article 26 shall be deposited into a bank or Post Office Perception using the Tax Payment (SSP), no later than December 10 next calendar month after the month when the taxes become due.
  4. Tax Income Tax Return Article 26, with a second sheet attached with SSP, collecting evidence of the second sheet and a list of collected evidence submitted to the local Tax Office not later than 20 days after the Tax Period ending.


  1. BUT exempted from withholding income tax of Article 26 if the Taxable Income after deduction of Income Tax BUT reinvested in Indonesia with the following requirements:
    a. conducted in the form of capital investment in the company established and domiciled in Indonesia as a founder or founding participant, and;
    b. conducted in the year or next fiscal year selambatlambatnya from fiscal year received or accrued by such income;
    c. do not replant the transfer of at least 2 (two) years after the company where the planting done, began commercial production.
  2. International agencies appointed by the Minister of Finance.

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