BP-21: The New Face of Withholding Tax Slips for Non-Employees and Final Tax in the Core Tax Era

With the enactment of Director General of Taxes Regulation Number PER-11/PJ/2025, Indonesia's tax administration landscape is undergoing a significant transformation through the Core Tax Administration System (CTAS). One fundamental change is the standardization of withholding tax slips (Bukti Potong or Bupot). Previously known by various forms for experts or severance pay (such as 1721-VI or 1721-VII), everything is now simplified into one main form: Form BP-21.

This article dissects the anatomy of Form BP-21 and its utility for income recipients.

1. What is Form BP-21?

Form BP-21 is an electronic document created by the tax withholder as proof of Article 21 Income Tax withholding that is Non-Final (excluding permanent employees) and Final.

This form is used for various types of income recipients, including:

• Non-Employees/Experts: Doctors, notaries, accountants, lawyers, or artists.
• Event Participants: Participants in seminars, meetings, or competitions.
• Commissioners: Those who are not permanent employees.
• Final Tax Recipients: Recipients of severance pay, lump-sum pension benefits, or Old Age Savings (THT) paid as a lump sum.

2. Dissecting the Content of Form BP-21

This form is generated through the eBupot module in the taxpayer portal and consists of several crucial sections:

• Header (General Section):

  • Contains a Withholding Slip Number (9 digits) auto-generated by the system.
  • Tax Period and Tax Year.
  • Status: Normal, Correction, or Cancellation.
  • Withholding Nature: Will display "Final" or "Non-Final" status according to the selected tax object code.

• Section A: Income Recipient Identity

  • Includes NIK/NPWP, Name, and Business Activity Place Identity Number (NITKU) of the recipient. The use of NIK is permitted for individual Indonesian residents.

• Section B: Income Withheld

  • Tax Facility: This column indicates whether the recipient uses tax facilities, such as a Certificate of Exemption (SKB), Tax Borne by Government (DTP), or No Facility.
  • Tax Object Code: Determines the type of income (e.g., 21-100-07 for Experts or 21-401-01 for Lump Sum Severance).
  • Calculation: Presents Gross Income, Tax Base (DPP), Rate (Article 17 or Effective Rate), and the amount of tax withheld.
  • Reference Document: Lists the transaction basis such as invoice number or agreement.

• Section C: Withholder Identity

  • Contains data of the tax withholder and the signer.
  • Electronic Signature (TTE): This form no longer requires a wet signature. Its validity is guaranteed through a QR Code displayed at the bottom of the form.

3. Function of BP-21 for Income Recipients

For recipients of Form BP-21, this document holds significant value depending on the nature of the withholding:

• If Non-Final (e.g., Experts/Freelancers): Form BP-21 serves as a Tax Credit. The tax amount listed in this form can be used as a deduction against tax payable in your Annual Individual Income Tax Return at the end of the year. You are required to report the gross income and this withholding slip in the Annual Tax Return to avoid significant underpayment.
• If Final (e.g., Lump Sum Severance): Form BP-21 serves as Proof of Tax Settlement. Your tax obligation on that income is considered settled upon withholding. This income simply needs to be reported in the Annual Tax Return under the "Final Tax" section and will not be recalculated.

Conclusion

BP-21 is an instrument of transparency in the Core Tax system. Tax withholders are required to provide this withholding slip to the income recipient for every transaction or at the latest 1 month after the tax period ends if created monthly. Ensure you receive and keep this document, as without it, you will face difficulties claiming tax credits or proving your tax compliance.