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Reimbursement (cash replacement) is an object of Income Tax Article 21 (taxable income) for the Employee receiving it, except for the reimbursement of food coupons (Article 4 paragraph (1) letter n).
It is adjusted according to the COP scheme used, whether it is a financing facility (cash) or a vehicle facility (benefit in kind).
The 3M limitation is in accordance with Article 6 and Article 9 of the Income Tax Law.
Post-HPP Law, as long as the cost is related to providing compensation for work/services, it can be 100% deducted
There is no difference, as long as they meet the 3M principle (Article 4 paragraph (1) letter n).
Employees who, due to the nature of their work, cannot utilize the food provided at the workplace (letter a) include employees in marketing, transportation, and other outside duties (Article 5 PMK-66).
The regulation for the nominative list format is currently being processed; it will be more or less similar to the promotional cost nominative list (PMK-02/2010).
PPh borne by the company is treated as an employee benefit (according to Per-16) and is an Object of PPh 21
Business travel expenses, as long as they are within the framework of performing duties, are not PPh objects (Article 4 paragraph (1) letter n)
There is no regulation on the limit of capital ownership yet; as long as there is equity participation in the form of shares or non-shares, the facility is not excluded from tax objects.
There are no specific provisions yet, so it still refers to the general provisions of the VAT Law (Free Gift/Own Use)
Condolence donations are non-objects of PPh 21.
Referring to Article 2 of PMK-68/2020:
Scholarship costs can be deducted from gross income (deductible) to calculate taxable income. Income in the form of Scholarships is excluded as an object of Income Tax for the recipient if specific requirements are met
BIK can be in the form of "Natura" (provision of goods other than money, e.g., food) or "Kenikmatan" (provision of facilities or services, e.g., use of a car),.
Previously, BIK were not taxable for employees and non-deductible for employers (unless the employer was subject to Final Tax). Following UU HPP (commencing Tax Year 2022), all BIK are taxable income objects for employees. PP-55 stipulates that BIK costs are deductible expenses for the employer provided they are costs to obtain, collect, and maintain income (3M)
No. Although often referred to as benefits, the Income Tax Law considers premiums paid by employers as separate tax objects (Article 4(1)a). They are not BIK but are already subject to Article 21 withholding
No, provided the travel is for business purposes. However, per diems or allowances that exceed actual receipted costs are considered taxable income,.
No. Cash reimbursements are considered income and are subject to Article 21 under existing income concepts
PP-55 excludes the following:
The obligation to withhold Article 21 tax for BIK comes into effect for BIK received commencing 1 January 2023,.
BIK received in 2022 must be self-assessed and reported by the employee in their 2022 Annual Individual Income Tax Return,,,.
Yes, however, the gross-up amount is also taxable income.
Employers need to capture BIK values (including for 2022), review employment agreements (regarding tax bearing), and await regulations on how to allocate facility costs per employee
The purchase of round-trip tickets for employees returning to their homebase for employers applying a roster system is a work compensation in the form of a benefit in kind (flight ticket). This purchase is an object of PPh Article 21 withholding unless the mining location has obtained a Decree of Designation as a Business Located in a Certain Area.
Article 10 paragraph (2) letter a reads "Contract of Work" (Kontrak Karya).
Certain mining licenses cover: 1) Contract of Work, 2) PKP2B, and 3) Mining licenses under the Mineral and Coal Mining Law. Two types of companies can receive designation as a business located in a certain area: 1) holders of certain mining licenses; and 2) companies other than holders of certain mining licenses. Contractors can obtain the designation if they hold a mining license, or if not, they can obtain a designation (as a non-mining company) for a period of five years, extendable every five years.
Depreciation costs are only allowed for benefits in the form of facilities from assets owned by the employer. Tax liability on benefits in kind (natura) ends when ownership is transferred. For benefits in use (facilities) such as a director's sedan, 100% of the depreciation expense can be deducted as long as the sedan is intended as work compensation in the form of a vehicle facility for the employee.
Depreciation costs are only allowed for benefits in the form of facilities from assets owned by the employer. Tax liability on benefits in kind (natura) ends when ownership is transferred. For benefits in use (facilities) such as a director's sedan, 100% of the depreciation expense can be deducted as long as the sedan is intended as work compensation in the form of a vehicle facility for the employee.
It depends on whether it is a benefit in kind (ownership transferred) or benefit in use (right to utilize). If it is a benefit in use, 100% of the depreciation expense can be deducted as long as the computer/laptop is intended as work compensation in the form of a computer/laptop facility for the employee.
Yes, maintenance and depreciation costs are included in the definition of costs incurred by the employer referred to in Article 22 paragraph (1) letter b of PMK 66 Year 2023
If the business travel is fully intended to perform the duties of the employee, and the employee has no intention of deriving income from it:
If given as a lumpsum (allowance), the excess difference between the lumpsum and the actual costs (at cost) for accommodation/tickets/meals is income in the form of money;
Reimbursement of travel expenses or bills paid directly by the employer (business to business) is not income.
The provision that benefits in kind are PPh objects starts in Tax Year 2022. However, to provide legal certainty, benefits received or obtained in the calendar year 2022 are excluded from PPh objects
Utilization rights held by an individual means the housing facility is dedicated to be inhabited by that individual, and that individual can control the use of the facility during the period, including bringing their family to live there.
Apartment or house facilities, whether company assets or rented from third parties, can be included in the negative list as long as they meet the provisions in Attachment Letter A number 7.
If only the housing facility is provided (benefit in use), valuation is based on costs incurred/should be incurred by the employer. For individual housing facilities, there is an exemption limit of IDR 2,000,000 per employee per month. If the house ownership is transferred to the employee (benefit in kind), valuation is based on the market value of the house.
If the employment agreement states the facility is for one year, the employee is still withheld PPh 21 on the cost for months 7-12 even if not inhabited. If the agreement states it ends in month 6, and the employer does not use the facility for other employees or other business purposes (3M), then costs for months 7-12 cannot be expensed (fiscal correction).
The employer can correct the PPh 21 Monthly Tax Return for the relevant months and issue a new 1721 A1 Withholding Slip. The employer can compensate for the overpayment in the PPh 21 Monthly Return. The employee can then correct their Annual Tax Return using the new 1721 A1 slip.
The implementation of KEP-220/PJ/2002 is carried out as long as it does not conflict with PMK-66 Year 2023
Generally, cash reimbursement for medical expenses is compensation in the form of money and is not covered by PMK 66 Year 2023. However, reimbursement for medical services related to: 1) work accidents; 2) occupational diseases; 3) life-saving emergencies; or 4) follow-up treatment thereof, is included in the definition of health facilities excluded from PPh objects due to the emergency nature.
Meal coupons outside the office received by divisions other than those whose work nature allows utilizing meal provision at the workplace are entirely taxable PPh objects.
It depends on the legality of ownership at the start. If the ownership documents and fiduciary agreement are in the employee's name from the beginning, essentially the employee receives an installment subsidy (cash), and there is no vehicle facility provided.
Lab coats or heat-resistant suits provided by the employer based on safety/health standards regulated by relevant ministries/agencies are included in benefits in kind required for work execution and are excluded from PPh objects under Article 6 PMK 66/2023.
Generally, if a benefit in kind/use is provided within the scope of work compensation or service compensation, the scheme used is taxable-deductible.
It is not only for mining. The Certain Area designation applies to all sectors as long as they meet the provisions in PMK 66 Year 2023.
As long as the company provides food to all employees, it can be excluded from income tax objects
As long as the company provides for all employees, even if there are menu differences, it can be excluded from income tax objects.
Providing benefits as work compensation is Own Use of Taxable Goods/Services (subject to VAT) as long as the benefit is a Taxable Good/Service. Providing benefits as service compensation between Taxpayers is a Delivery of Taxable Goods/Services subject to VAT.
In principle, no new cost type appears. The benefit cost that can be deducted is the actual cost incurred by the employer, which is not limited to depreciation.
In principle, no new cost type appears. The benefit cost that can be deducted is the actual cost incurred by the employer, which is not limited to depreciation.
KEP-220/PJ/2002 is implemented as long as it does not conflict with PMK-66 Year 2023.
Uniforms used for official duties can be expensed by the company and are income for the employee. However, such uniforms are benefits excluded from tax objects as "work equipment and facilities" supporting the employee's job.
The value is based on all costs incurred by the company to provide the vehicle facility, including depreciation, maintenance, gasoline, driver, etc..
Family gatherings are benefits in use (facilities). Employee gatherings and business trips are not benefits for employees if they are for company interests (operational costs), e.g., team building. However, if the gathering/trip provides greater benefit to the employee (e.g., vacation), it falls under the category of benefits in use.
In principle, it is a benefit in use. It is not excluded from PPh objects because the exemption is limited to work accidents/occupational diseases. However, it can be excluded if provided in a designated Certain Area.
The maximum limit excludes gifts received during the five designated religious holidays (which are excluded without limits).
It is not a benefit (taxable) if it is for company interest (operational cost). If it provides greater benefit to the employee (vacation), it is a benefit in use (taxable for employee) and deductible for the company.
Outside the scope of the Regulations Directorate. PMK-66 requires employers to attach a nominative list of benefit recipients in the Annual Tax Return.
Benefits received from Jan to Jun 2023 are excluded from withholding. Employees must calculate, pay, and report themselves in their 2023 Annual Tax Return. If the employer already withheld, it is reported in the Dec 2023 1721-A1 or can be corrected.
This is cash income (not benefit in kind). If received by the family as a donation/assistance and not related to work, it is excluded from income tax objects.
The employer Taxpayer can correct the PPh 21 Monthly Tax Return and compensate for the overpayment. Issue a new withholding slip.
Yes, according to Article 2 paragraph (7) of PMK-66 Year 2022.
These articles elaborate on the validity of cost and object provisions under PP-55/2022, which is starting Tax Year 2022. It is not related to the July 1 date.
If the brand/technology facility is not work equipment supporting the job, it is a PPh object not regulated by specific exemptions (the entire facility is a PPh object).
They can be expensed because they are benefits with specific types/limits excluded from tax objects, namely work equipment and facilities supporting the employee's job.
Tax Allowance = Cash Income. Tax Borne = Benefit. Since the new regulation, both are treated the same: as additions to gross income and are deductible.
Yes. The benefit value is the actual cost (maintenance, gas, driver, electricity, etc.). If given as a benefit in kind (transfer of rights), it is valued at market value.
No new cost appears. The benefit cost deductible is the actual cost, which is not limited to (but includes) depreciation
Equipment and facilities used in the office for operational purposes (desks, chairs, cubicles) are operational costs, thus not included in benefits in kind/use.
If Benefit in Kind (transfer): Cost is book value, Employee Object is Market Value. If Benefit in Use (Facility): Cost is actual cost (fully deductible), Employee Object is subject to exemption limits.
PMK-66 considers propriety. Factually in Indonesia, gifts are typically given during Eid al-Fitr.
If only given to specific religions, it falls under "Other Gifts" (capped at 3 million). However, if all employees receive holiday gifts (even if the contents differ based on religion), they are excluded from PPh objects.
It can be assessed: 1) Stated in contract; 2) Regulated by law as compensation; or 3) There is employee intent to receive it. If one is met, it is 3M.
Follows Presidential Regulation No 7 of 2021. Must be proven by a doctor's certificate stating it is work-related.
Yes. If an employee is also a shareholder, the vehicle facility is a PPh Article 21 object and is not excluded, regardless of gross income.
Yes, gross income includes all income (including benefits) received in the last 12 months, averaged
The actual cost incurred by the employer, including depreciation, maintenance, gas, driver, etc..
Yes. PPh 23 is on the rental income. PPh 21 is on the facility received by the employee.
It follows the promotional cost list format (PMK-02/2010) until the new format in CTAS is available.
The limit is whichever is higher between IDR 2,000,000 or the value of food received at the workplace
Yes. Daily official uniforms determined by the company are excluded as "work equipment and facilities".
Non-taxable. The key is that food is provided to all employees, regardless of menu differences.
Yes, as Own Use (if work-related) or Service Delivery (if inter-taxpayer service). Subject to VAT.
Years 1-5 (Facility): Valued at actual cost. Year 5 (Transfer): Valued as Benefit in Kind (Natura) at Market Value.
It is a Benefit in Use (Facility) during the usage period. No Benefit in Kind (Natura) because no transfer occurred.
PPh: Object of PPh Article 26 on services. VAT: Subject to VAT on Offshore Services
Valuation remains based on depreciation and operational costs.
If the STP was solely due to 2022 benefits, the Taxpayer can apply for STP Cancellation under PMK-8/2013.
They become tax objects upon handover (constructive receipt), regardless of usage.
Per Article 23 PMK 66/2023, tax is recognized at the end of the month of transfer/handover.
Yes, benefit costs for tax year 2022 are deductible
Yes, deductible. 1) Scholarship: Non-taxable if requirements met. 2) Benefit (Facility): Taxable for employee (unless in Remote Area), but deductible for employer.
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