The Participants of Tax Amnesty Vol. II Cannot Correct Inheritance in Tax Return

JAKARTA. With the enactment of the Harmonized Tax Law (HPP Law) which regulates the Voluntary Disclosure Program (VDP), taxpayers who will participate in the VDP cannot correct the assets contained in the Annual Tax Return.

Citing cnbcindonesia.com, this provision applies to all assets acquired before 2020, which is the basis of the VDP policy. This includes assets derived from inheritance.

Although not a tax object, inheritance is also an asset that must be reported in the tax return. So if the HPP Law comes into effect but it has not been disclosed, it must be disclosed in VDP or tax amnesty volume II.

The consequence of disclosing the inheritance in the tax amnesty is that the taxpayer must pay the final Income Tax (PPh) at the rate as set forth in the HPP Law.

For assets acquired before 2015, the final income tax rates to be paid are:

• 11% for asset declaration
• 8% for repatriated foreign assets and domestic assets
•  6% for repatriated foreign assets and domestic assets which is invested in govt. securities/downstream/renewable energy

Meanwhile, for assets acquired between 2016-2020, the final income tax rates to be paid are:

• 18% for asset declaration
• 14% for repatriated foreign assets and domestic assets
• 12% for repatriated foreign assets and domestic assets which are invested in govt. securities/downstream/renewable energy.

For information, the the tax amnesty vol. II program will be valid for six months, from 1 January 2022 until the end of June 2022.