Annual Individual Income Tax Return

Entering the new era of tax administration through the Coretax system, Indonesia has undergone a massive digital revolution. This transformation not only integrates the National ID (NIK) as the Taxpayer Identification Number (NPWP) but also simplifies various bureaucratic processes, including how we file Annual Tax Returns (SPT). Through Law Number 7 of 2021 on the Harmonization of Tax Regulations (UU HPP), the government has created a fairer and more transparent system.

In the Coretax era, the traditional documents we once knew have evolved. This article will thoroughly explore the latest procedures for filing Individual Income Tax Returns, scenarios for various professions, and how to leverage the conveniences of the Coretax system for your tax compliance.

1. Document Transformation: Goodbye 1721-A1, Welcome BP-A1 and BP-21

One of the most significant changes in the Coretax system is the simplification of withholding tax slips. Taxes withheld by employers are now documented in a new format:

• BP-A1: The withholding slip for Income Tax Article 21 for Permanent Employees and Retirees (replacing forms 1721-A1 and 1721-A2). This document serves as the primary basis for employees to report their income.
• BP-21: The withholding slip for non-final Income Tax Article 21 for recipients other than permanent employees. This is typically received by experts, activity participants, or severance pay recipients.
• Pre-populated Data: In the Coretax era, information from BP-A1 and BP-21 will be automatically filled into the taxpayer's account. Therefore, you no longer need to enter figures manually if the tax withholder has reported correctly.

2. Reporting Scenarios Based on Taxpayer Profile

A. Employee Scenario (Private Sector, Civil Servants, Military, and Police)

In the Coretax ecosystem, the administrative distinction between private employees and state apparatus (formerly A1 and A2) has been unified into BP-A1.

1. Login to the Taxpayer Portal in the Coretax system.
2. Check the list of automatically available withholding slips (pre-populated).
3. Confirm the gross income and taxes withheld according to your monthly pay slips.
4. If there is no additional income, the SPT status will immediately show as "Nil" (Nihil).

B. Independent Professionals and Practitioners (Doctors, Architects, Notaries, Consultants)

For experts, income is usually withheld under the non-final Article 21 scheme, documented in BP-21.

• Norm Method (NPPN): If turnover is below IDR 4.8 Billion, taxpayers can use the norm percentage to determine net income.
• Bookkeeping Method: Mandatory for those with turnover above IDR 4.8 Billion, involving the upload of integrated digital financial statements within the Coretax system.

C. MSME Scenario and Retailers (PP 55/2022)

The government maintains the tax-free threshold of IDR 500 million per year for Individual MSME owners.

• Gross circulation up to IDR 500 million in one tax year is not subject to the 0.5% Final PPh.
• Any excess over IDR 500 million is subject to the 0.5% rate. In the Coretax system, reporting this monthly turnover becomes more crucial to ensure accurate automatic calculations at year-end.

D. Content Creators, Influencers, and Affiliates

For digital professions, the main challenge is income from multiple sources (foreign platforms and local endorsements).

• Natura: Goods or services received as compensation (endorsements) are now taxable objects that must be reported based on market value.
• Foreign Income: AdSense and royalties are reported as other net income, taking into account foreign tax credits where applicable.

3. Technical Steps for Reporting in the Coretax System

The reporting process is now more intuitive with the following steps:

• Authentication: Using NIK as the primary access to the portal.
• Automatic Data Validation: The system will present data on assets, liabilities, and withholding slips (BP-A1/BP-21) recorded nationally. You only need to validate the accuracy.
• Reporting Assets and Liabilities: Taxpayers must still regularly update their list of assets (including digital assets like crypto) and liabilities.
• Digital Verification: A verification code will be sent through registered communication channels to ensure data security.
• Submission: After submission, the Electronic Receipt (BPE) will be permanently stored in your digital account.

4. Deadlines, Sanctions, and the Importance of Accuracy

The deadline for filing the Individual Income Tax Return remains March 31st. Late filing is subject to an administrative fine of IDR 100,000. However, the advantage of Coretax is a stricter monitoring system through a Risk Engine. Discrepancies between the asset profile in the SPT and third-party data (banks, land registry, etc.) will be more easily detected, making accurate reporting vital.

Conclusion

The Coretax era brings a breath of fresh air to tax efficiency in Indonesia. With the shift from manual forms to automated BP-A1 and BP-21 withholding systems, the administrative burden on taxpayers is significantly reduced. Tax compliance is no longer about complex number crunching, but about honesty and data validation to support national development.