Regulation Update
The Rules for Making Tax Withholding Slip of ITA 23 or 26 are Expanded

Thursday, 18 June 2020

The Rules for Making Tax Withholding Slip of ITA 23 or 26 are Expanded

JAKARTA. The Directorate General of Taxes (DGT) broadens the scope of business actors who are required to make tax withholding slip and submit Periodic Tax Returns on Income Tax Article (ITA) 23 and / or 26, by issuing Director General of Taxes Decree number KEP-269 / PJ / 2020.

In the regulation stipulated on June 10, 2020, the DGT requires that every VAT-Registered Person (PKP) registered at Small Tax Office (KPP Pratama) to make tax withholding slip and submit periodic tax returns for ITA 23 or 26. This obligation is valid from the tax period of August 2020.

The obligation to make tax witholding slip also applies, even though the business actor no longer has a VAT-Registered Person status. Meanwhile, for those who have only become VAT-Registered Person after this regulation is issued, the obligation to make tax withholding slip and submit tax return is valid since the determination of VAT-Registered Person status.

This provision appears to complement other rule issued by the authority concerning the same thing, namely the Decree of the Directorate General Taxes Number KEP-599/PJ/2019. In the regulation, DGT only requires VAT-Registered Person who has been registered in Large Tax Office, Foreign Investment Tax Office, large taxpayers, Listed Company Tax Office, Oil and Gas Tax Office and Medium Tax Office is required to make tax withholding slip. 

However, the treatment given by the authority to VAT-Registered Person in Small Tax Office and as stated in KEP-599 / PJ / 2019 is different. In this beleid, business actor who is no longer VAT-Registered Person is not obliged to make tax withholding slip and deliver periodic tax return ITA 23 and/or 26.

Both of these regulations are derived from Regulation of the Director General of Taxes number PER-04 / PJ / 2017 regarding Provisions on the Form, Content, Procedure for Filling and Submission of Periodic Income Tax Return of Article 23 and / or Article 26, and Withholding Income Tax Collection Forms of Article 23 and / or Article 26.

Based on these provisions, each tax witholder must make and provide tax withholding slip to the recipient of deducted income. Furthermore, each tax witholder is also obliged to fill in the Periodic Tax Return correctly, completely, and clearly.


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