PT II’s Strategy to Overturn the Article 21 Income Tax Assessment on DPLK and BPJS Contributions

PT II Tax Dispute: Salary Expense Equalization and Taxable Boundaries Under Decision Number PUT-004366.10/2024/PP/M.XA

The Indonesian Directorate General of Taxes (DGT) frequently performs salary expense equalizations between Corporate Income Tax returns and Article 21 Income Tax reports. However, not all employee-related expenses are subject to withholding tax. Tax Court Decision Number PUT-004366.10/2024/PP/M.XA clarifies the crucial boundaries of what constitutes taxable income for employees.

Discrepancy Analysis: Pension Contributions, Old Age Benefits, and Insurance Premiums Evaluation

The dispute arose when the Respondent equalized personal expenses and identified discrepancies in pension contributions (DPLK), Old Age Benefits (JHT/BPJS), and health insurance premiums, deeming them unreported taxable objects. The Petitioner countered that under PMK 252/2008, DPLK and JHT contributions paid by the employer are explicitly non-taxable. Regarding the insurance premiums, the Petitioner proved they had already performed a positive fiscal adjustment in their Corporate Tax return, adhering to the "Non-Taxable Non-Deductible" principle. The Court sided with the Petitioner, emphasizing that once a benefit is treated as non-deductible for the company, it should not be taxed as income for the employee.