JAKARTA. The government has released technical provisions regarding the Voluntary Disclosure Program (VDP) or what is often referred to as tax amnesty volume II, through Minister of Finance Regulation (PMK) Number 196/PMK.03/2021.
VDP is a facility provided by the government to taxpayers who have acquired assets before 2020 but have not been reported in the Annual Income Tax Return (SPT), without worrying about being subject to administrative sanctions or fines.
In general, the tax amnesty vol. II consists of policies. The first VDP policy is for individual and corporate taxpayers participating in the tax amnesty volume I (2016-2017) who have not or under-disclosed their net assets until the 2015 fiscal year in a declaration letter.
Meanwhile, the second VDP policy is only intended for individual taxpayers—not corporates—who have not reported 2016-2020 acquired assets in the Tax Return.
For taxpayers who have assets abroad, apart from being able to disclose or declare assets, they can also bring them to Indonesia through an asset repatriation scheme.
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.
By repatriating assets, taxpayers will only be subject to the obligation to pay final Income Tax (PPh) at a lower rate than just a declaration. In this regard, there are several provisions that must be considered by taxpayers:
1. The repatriated assets can be invested in the following instruments:
- Government Securities (SBN) through the primary market with a private placement mechanism
- Downstream program of Natural Resources or renewable energy through business establishment or equity participation
2. Investment realization is carried out no later than 30 September 2023. If it is late, then it will be subject to additional final income tax.
3. Minimum investment period is 5 years from realization.
4. The invested assets can be transferred to different instruments after two years.
5. The maximum transfer of investment instruments can be done twice
6. In one calendar year, only a one-time transfer of investment instruments can be made.
7. The time lag between the transfer of investment instruments for repatriated assets is a maximum of 2 years.
8. Time lag between investments deferred holding period of 5 years.
9. VDP participants who repatriate are required to report the maximum investment realization by the deadline for submitting the annual tax return.
For information, the second volume of the tax amnesty program will be valid for six months, from 1 January 2021 until the end of June 2021.