New Era of Compliance: Practical Guide to Reporting PPh 21 in Core Tax

The implementation of the Core Tax Administration System (CTAS) brings fundamental changes to the reporting procedures for Income Tax (PPh) Article 21. Based on Director General of Taxes Regulation Number PER-11/PJ/2025, the reporting process is now fully integrated, minimizing repetitive manual input and changing the forms known thus far.

Here is a step-by-step narrative guide for employers to calculate and report Monthly PPh 21 in this new ecosystem.

1. Preparation: Understanding New Forms

In Core Tax, understanding the types of withholding slips (Bukti Potong or Bupot) is the crucial first step. The system distinguishes Bupot based on the income recipient and the timing of withholding:

• BP-21: Used for PPh 21 withholding that is not final (non-permanent employees) and Final PPh 21. Example: Payments to experts, non-employees, or severance pay paid at once.
• BP-26: Specifically for Non-Resident Taxpayers.
• Monthly Withholding List (Form L-IA): This is the biggest change. For permanent employees, you no longer create Bupot 1721-A1 every month. Instead, the details of monthly income and tax for permanent employees (January to November) are recapitulated in Form L-IA.
• BP-A1: This form is only created in the Last Tax Period (December or the month the employee resigns). This BP-A1 is what employees will later use to report their Annual Personal Tax Returns.

2. Calculation Step: Applying TER

Before entering the application, ensure your payroll working paper is in accordance with Government Regulation Number 58 of 2023.

• Tax Periods Other Than the Last (Jan-Nov): Calculate PPh 21 for Permanent Employees using the Average Effective Rate (TER) multiplied by the monthly Gross Income.
• Non-Employees/Experts: Use the Article 17 rate x (50% x Gross Income).

3. Execution Process in Core Tax

Once the calculations are ready, here is the workflow in the Core Tax portal:

A. Creating Withholding Slips (eBupot Module)

You have two options: Key-in (input one by one) or Import Data (for large numbers of employees).

1. XML Data Import: Download the standard Excel format from Core Tax, fill in employee income data and tax values according to TER calculations. Convert to XML and upload to the system. The system will validate NPWP/NIK automatically.
2. Facility Validation: If any employee has a Tax Exemption Letter (SKB) or DTP facility (Borne by Government), the system will perform automatic validation during input/import. If valid, the 0% rate or DTP description will appear.

B. SPT Masa Generation (Auto-Population)

One of the advantages of Core Tax is the pre-populated feature. After you submit all data in the eBupot menu (both L-IA for permanent employees and BP-21 for third parties):

1. Enter the PPh 21/26 Monthly SPT menu.
2. The system automatically pulls data from the Bupot you created into the SPT Master (Induk). You do not need to retype the recapitulation figures.
3. The Master Form will display the total tax payable, total borne by the government, and total to be deposited.

C. Deposit and Reporting

1. Integrated Billing: If the SPT status is Underpayment, you can create a billing code directly from that menu without switching applications.
2. Flexible Compensation: If an Overpayment occurs (e.g., due to correction), Core Tax allows you to compensate the excess to the next tax period without having to be sequential. Example: January overpayment can be directly compensated to March.
3. Electronic Signature: The SPT is signed electronically using an Electronic Certificate or DJP Authorization Code before submission.

4. Post-Reporting Obligation: Bupot Distribution

According to the latest regulations, the Tax Withholder is required to provide a withholding slip to the income recipient.

• For Permanent Employees, although BP-A1 is only given at the end of the year, you are still required to provide monthly withholding information (via payslips or other means containing L-IA deduction details) to ensure transparency.
• Provision of withholding slips can be done through the recipient's Taxpayer Portal.

Conclusion

The Core Tax system simplifies PPh 21 compliance by eliminating data redundancy. The key to successful reporting now lies in the accuracy of the calculation working paper (TER vs. Article 17) and the validity of employee master data (NIK/NPWP), as the system will reject invalid data before the SPT is formed.

Regulatory References:

1. Director General of Taxes Regulation Number PER-11/PJ/2025 concerning Provisions for Reporting Income Tax, VAT, Sales Tax on Luxury Goods, and Stamp Duty within the Framework of Implementing the Core Tax Administration System.
2. Government Regulation Number 58 of 2023 concerning Article 21 Income Tax Withholding Rates on Income in Connection with Work, Services, or Activities of Individual Taxpayers.
3. Minister of Finance Regulation Number 168 of 2023 concerning Implementing Guidelines for Withholding Tax on Income in Connection with Work, Services, or Activities of Individual Taxpayers.