With a turnover of less than IDR 500 million per year, am I obligated to pay tax?

Hello, Satria! My name is Dita, and I am a consultant from Taxindo Prime Consulting.

Regarding your question, as an Individual Taxpayer with an annual turnover under Rp 500 million, you are not obligated to pay Income Tax (PPh). Based on Law No. 7 of 2021 on the Harmonization of Tax Regulations (UU HPP), Article 7 paragraph (2a), business income up to the Rp 500 million threshold is exempt from tax. However, it is important to note that the obligation to have a Taxpayer Identification Number (NPWP) and to file an Annual Tax Return (SPT Tahunan) remains.

Even though your turnover is not subject to PPh, you are still required to keep regular records of your monthly turnover. These records will be used as the basis if your cumulative turnover in one tax year begins to exceed the Rp 500 million threshold. If that happens, only the turnover exceeding that limit will be subject to a 0.5% Final PPh, in accordance with Government Regulation (PP) No. 55 of 2022, Article 56 paragraph 2.

In conclusion, even though you are not currently paying tax, administrative compliance, such as having an NPWP and recording your turnover, remains a non-negotiable obligation. This will help you avoid future penalties and make it easier to complete your Annual Tax Return, which is a yearly obligation for every taxpayer.