Tax Amnesty Reporting Provisions Changed
On September 23, 2016, the Ministry of Finance issued Regulation Number 141/PMK.03/2016 (“Amendment”) amending Regulation Number 118/PMK.03/2016 (“MOF Reg. 118/2016”) concerning the Implementation of Law Number 11 of 2016 on Tax Amnesty. Tax Amnesty is designed to increase State revenues by facilitating payment of back taxes. The purpose of the Amendment is to further encourage the reporting of undeclared assets by easing certain reporting obligations.
♦ Change of Reporting Period
Pursuant to Article 38(2) of the Amendment, taxpayers participating in Tax Amnesty shall submit annual reports for a period of three years following:
- transfer and investment realization of additional assets from foreign countries; and
- placement of additional assets within the territory of the Republic of Indonesia.
The purpose of the reports is to track the assets and ensure they are not transferred outside the jurisdiction of Indonesia to avoid taxation. Previously, under MOF Reg. 118/2016, reports were to be submitted semiannually.
♦ Submission to Tax Office and Reporting Period
Reports shall be submitted to the Tax Office where the taxpayer is registered using the forms provided in attachments L and M of MOF Reg. 118/2016. Submission deadlines are the same as for the Yearly Income Tax Notification Letter (Surat Pemberitahuan Tahunan Pajak Penghasilan), as follows:
- Individuals: (i) March 31, 2017, (ii) March 31, 2018, (iii) March 31, 2019
- Business Entities: (i) April 30, 2017, (ii) April 30, 2018, (iii) April 30, 2019.
Taxpayers who participate in the last batch of the Tax Amnesty program (with deadline of March 31, 2017), shall be obliged to submit the reports in 2018 and 2019.
♦ Sanctions for Delay
The Amendment does not change the applicable sanctions for delay or failure to file annual Tax Amnesty reports.
Pursuant to Article 40(4) of MOF Reg. 118/2016, the Directorate General of Tax through the Head of the local Tax Office will first issue a warning letter. After receiving the warning letter, the taxpayer must reply with the delayed report within 14 working days, failing which, the taxpayer will be eliminated from the Tax Amnesty program and will be sanctioned in the amount of 2% of the total income tax owed for 2016.
March 28, 2017
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- March 28, 2017