Certain Corporate Taxpayers collect Income Tax to increase public contributions to state revenues through the tax payment system. This provision is outlined in Article 22 of the 1984 Income Tax Law. Article 22 Income Tax is collected on:
Import and Export
If you are an importer, the following are to be considered:
- Prepare the import documents required by the Directorate General of Customs and Excise;
- Pay import Article 22 Income Tax according to the calculation and billing code provided by the Directorate General of Customs and Excise as well as import duty;
- Keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
If you are an exporter of coal mining commodities, metallic minerals, and non-metallic minerals according to the Harmonized System product descriptions and tariffs, the following are to be considered:
- Prepare the export documents required by the Directorate General of Customs and Excise;
- Pay export Article 22 Income Tax according to the calculation and billing code provided by the Directorate General of Customs and Excise, which is payable and to be deposited upon completing the exportcustoms and excises declaration;
- Fill out the Follow-Up Export Declaration Form in accordance with the applicable customs provisions, with the following instructions:
- Fill in the Document Type column with Tax Payment Slip (SSP);
- Fill in the Document Number column with State Revenue Transaction Number (NTPN) indicated on the Tax Payment Slip; and
- Fill in the Document Date column with date of State Revenue Transaction Number;
- Submit the original copy of the 5th sheet of the Tax Payment Slip with State Revenue Transaction Number printed on it as a supporting document for the export customs and excises declaration;
- Keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
Sales to Certain Entities
If you make sales to a State-Owned Enterprise (SOE) or certain business entity directly owned by SOE, provided that the purchase of materials/goods by the SOE or certain business entity directly owned by SOE is related to its business activities, whether directly or indirectly, the following are to be considered:
- The SOE or business entity will collect tax on the sales transaction you make at 1.5% of the transaction value;
- Request and keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
Certain business entities directly owned by SOE include: PT Pupuk Sriwidjaja Palembang, PT Petrokimia Gresik, PT Pupuk Kujang, PT Pupuk Kalimantan Timur, PT Pupuk Iskandar Muda, PT Telekomunikasi Selular, PT Indonesia Power, PT Pembangkitan Jawa-Bali, PT Semen Padang, PT Semen Tonasa, PT Elnusa Tbk, PT Krakatau Wajatama, PT Rajawali Nusindo, PT Wijaya Karya Beton Tbk, PT Kimia Farma Apotek, PT Kimia Farma Trading & Distribution, PT Badak Natural Gas Liquefaction, PT Tambang Timah, PT Terminal Petikemas Surabaya , PT Indonesia Comnets Plus, PT Bank Syariah Mandiri, PT Bank BRI Syariah, and PT Bank BNI Syariah.
However, not all transactions with the SOEs and certain business entities mentioned above are subject to Article 22 Income Tax. The following transactions with those SOEs and certain business entities are exempt from Article 22 Income Tax:
- Payment made by a collecting agent of maximum Rp10,000,000 (ten million Rupiah) that is not an installment;
- Payment for the purchase of fuel oil, fuel gas, lubricants, postal items, and water and electricity;
- Payment for the purchase of oil, gas, and/or byproducts of upstream oil and gas business activities in Indonesia from a contractor performing exploration and exploitation under a cooperation contract or the head office of a contractor performing exploration and exploitation under a cooperation contract;
- Payment for the purchase of geothermal energy or electricity generated from geothermal exploitation from a Taxpayer engaged in geothermal business under a geothermal resources exploitation cooperation contract.
Sales to Certain Industries
Sales to company or exporter engaged in forestry, plantation, agricultural, livestock, and fishery sectors
If you make sales to an industry or exporter engaged in forestry, plantation, agricultural, livestock, and fishery sectors, the following are to be considered:
- The industry or exporter will collect tax on the purchase of materials in the form of forest, plantation, agricultural, livestock, and fishery products that have not gone through a manufacturing process at 0.25% of the transaction value exclusive of Value-Added Tax (VAT); and
- Request and keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
The transaction value with business entity and exporter engaged in forestry, plantation, agricultural, livestock, and fishery sectors is limited to sales of maximum Rp20,000,000 (twenty million Rupiah) exclusive of VAT that is not an installment.
Sales of coal mining commodities, metallic minerals, and non-metallic minerals
If you are an entity or individual holder of mining business license making sales to an industry or business entity engaged in coal mining commodity, metallic mineral, and non-metallic mineral business, the following are to be considered:
- The business entity will collect Article 22 Income Tax at 1.5% of the transaction value exclusive of VAT;
- Request and keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
Purchase from Certain Industries or Entrepreneurs
Purchase of cement, paper, steel, automotive vehicles, and drugs by distributor
If you are a distributor of cement, paper, steel, automotive vehicles, and drugs, any transaction for the purchase of such goods from a relevant business entity will be subject to Article 22 Income Tax at a rate of:
- Cement: 0.25% x VAT Tax Basis;
- Paper: 0.1% x VAT Tax Basis;
- Steel: 0.3% x VAT Tax Basis;
- Automotive vehicles: 0.45% x VAT Tax Basis;
- Drugs: 0.3% x VAT Tax Basis.
Purchase of fuel oil, fuel gas, and lubricants from relevant manufacturer or importer
If you are a distributor/agent of fuel oil, fuel gas, and lubricants (non-gas station or non-Pertamina gas station) making a purchase from a manufacturer or importer of fuel oil, fuel gas, and lubricants, the following are to be considered:
- The manufacturer or importer will collect Article 22 Income Tax on the purchase of fuel oil, fuel gas, and lubricants at 0.3% of the transaction value exclusive of VAT;
- The Article 22 Income Tax collected on the purchase of fuel oil and fuel gas is final, thus cannot be credited on your Annual Income Tax Return;
- The Article 22 Income Tax collected on the purchase of lubricants can be credited on your Annual Article 22 Income Tax Return, so you need to keep the reducing Article 22 Income Tax receipt;
- Article 22 Income Tax becomes payable and is collected at the time of the delivery order.
If you are not a distributor/agent of fuel oil, fuel gas, and lubricants (non-gas station or non-Pertamina gas station) making a purchase from a manufacturer or importer of fuel oil, fuel gas, and lubricants, the following are to be considered:
- The manufacturer or importer will collect Article 22 Income Tax on the purchase of fuel oil, fuel gas, and lubricants at 0.3% of the transaction value exclusive of VAT;
- The Article 22 Income Tax collected on the purchase of fuel oil, fuel gas, and lubricants can be credited on your Annual Article 22 Income Tax Return, so you need to keep the reducing Article 22 Income Tax receipt;
- Article 22 Income Tax becomes payable and is collected at the time of the delivery order.
Purchase from Trademark Holder Sole Agent (ATPM), Trademark Holder Agent (APM), and general importer of motor vehicles
If you purchase a motor vehicle from a Trademark Holder Sole Agent, Trademark Holder Agent, and importer of motor vehicles, the following are to be considered:
- The Trademark Holder Sole Agent, Trademark Holder Agent, and importer of motor vehicles will collect Article 22 Income Tax at 0.45% of the product price exclusive of VAT;
- Request and keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
Purchase of luxury goods
If you purchase the following items:
- Private airplane and private helicopter;
- Yacht and the like;
- House and land at a selling or transfer price of more than Rp5,000,000,000 (five billion Rupiah) or with a building size of more than 400 m2 (four hundred square meters);
- Apartment, condominium, and the like at a selling or transfer price of more than Rp5,000,000,000 (five billion Rupiah) or with a building size of more than 150 m2 (one hundred fifty square meters);
- Four-wheeled motor vehicle transporting less than ten people in the form of sedan, jeep, sport utility vehicle (SUV), multi-purpose vehicle (MPV), minibus, and the like at a selling price of more than Rp2,000,000,000 (two billion Rupiah) or with a cylinder capacity of more than 3,000 cc;
- Two- and three-wheeled motor vehicle at a selling price of more than Rp300,000,000 (three hundred million Rupiah) or with a cylinder capacity of more than 250 cc;
the business entity making the sales will collect Article 22 Income Tax at 5% of the selling price exclusive of VAT for non-building goods (numbers 1, 2, 5, and 6) and of the base price, i.e., the cash price exclusive of VAT and Sales Tax on Luxury Goods, for buildings (numbers 3 and 4).
Purchase of gold bullions
If you purchase a gold bullion at any Antam Logam Mulia branch, the purchase of gold bullion will be subject to Article 22 Income Tax at a rate of 0.45%. The Article 22 Income Tax collected is not final, so you need to request and keep the reducing Article 22 Income Tax receipt to be credited on your Annual Income Tax Return.
Additional provisions:
The rate of Income Tax collected on any of the above sales/purchases to/from an Article 22 Income Tax Collecting Agent will be 100% higher if you do not have a Taxpayer Identification Number (TIN).
Article 22 Income Tax Facility During the Pandemic
In light of the impacts of the Coronavirus Disease 2019 (COVID-19) spread, policies that ensure public health and safety as well as protect businesses remain important. For this reason, the Regulation of the Minister of Finance Number 143/PMK.03/2020 provides an incentive for Article 22 Income Tax collected by:
- Government agencies on payments for purchases of goods;
- Certain business entities on payments for purchases of goods and/or materials for business activities; or
- Business entities engaged in pharmaceutical industry on sales of products to domestic distributors;
in observance of the laws and regulations.
Pharmaceutical Industries Manufacturers of Vaccines and/or Drugs importing and/or purchasing raw materials to produce vaccines and/or drugs for the handling of COVID-19 are exempt from Import Article 22 Income Tax and/or Article 22 Income Tax from Tax Periods October 2020 to December 2020. The exemption from Import Article 22 Income Tax and/or Article 22 Income Tax will be granted upon the Pharmaceutical Industries Manufacturers of Vaccines and/or Drugs receiving a letter of recommendation from the National Disaster Management Agency (BNPB).
The exemption from Article 22 Income Tax facility is also granted to Pharmaceutical Industries Manufacturers of Vaccines and/or Drugs selling vaccines and/or drugs for the handling COVID-19 to Government Agencies and/or certain business entities from Tax Periods October 2020 to December 2020.