Definition of Object Tax and Income Tax Rate
Based on Law No. 17 of 2000 Article 4, which includes Object tax is income, the increase in economic capability received or accrued by the taxpayer, whether originating from Indonesia and outside Indonesia, which can be used for consumption or to increase the wealth of the taxpayer is concerned, the name and in any form, including:
1. Payment or compensation in respect of employment or services received or acquired, including salaries, wages, allowances, fees, commissions, bonus, gratuity, pension, or compensation in any other form, unless otherwise provided in this Law;
2. Gift of sweepstakes or work or activities, and awards;
3. Income from operations;
4. Gains from the sale or transfer of property, including:
a. Gains from transfer of property to the company, partnerships, and other entities in lieu of shares or equity
b. Gains derived by the company, unions and other entities for the transfer of property to shareholders, partners or members;
c. Advantages of a liquidation, merger, consolidation, expansion, split, or acquisition of business; gains from transfer of property in the form of grant aid or donation, except that given to the family by blood in the direct lineage of one degree, and religious bodies or educational institutions or social agencies or small businesses including cooperatives set by the Minister of Finance, as long as there is no relationship with the business, occupation, possession or
5. Acceptance of back tax payments as an expense;
6. Interest includes premiums, discounts and rewards for loan repayment guarantees;
7. Dividends, with the name and in any form including dividends from insurance companies policy holder, and the distribution of net income of the cooperative;
8. Royalties;
9. Rent and other income in connection with the use of property.
10. Acceptance or acquisition of periodical payments;
11. The advantage for debt relief, but up to a certain amount stipulated by government regulation;
12. Gain in foreign exchange rates;
13. Differences from revaluation of assets;
14. Insurance premiums;
15. Contributions are received or accrued association of members consisting of Mandatory
16. Taxes are running a business or independent;
17. Additional net wealth derived from income that has not been taxed.
Exceptions subject to tax under Article 4 paragraph (3) of the Income Tax Act are:
a. Aid donations, including zakat received by amil zakat board or other amil zakat institutions established or approved by the government and eligible zakat recipients and treasure gift received by the family of flesh in the direct lineage of one degree, and by religious bodies or educational institutions or charities or small enterprises including cooperatives established by the Minister of Finance; so long as no employment relationship with the business, ownership, or control between the parties concerned;
b. Heritage;
c. Of property, including cash deposits received by an entity referred to in Article 2 paragraph (1) letter b as stock replacement or as a substitute for equity;
d. Replacement or compensation in connection with the work or services received or acquired in kind and or enjoyment of the taxpayer or the government;
e. Payment of an insurance company to an individual in connection with health insurance, accident insurance, life insurance, endowment insurance, insurance and scholarships;
f. Dividends or share of profits derived by a limited liability company as a taxpayer in the country, cooperatives, State-Owned Enterprises.
Final Income Tax
Final Income Tax means tax (VAT), which has been cut or has paid for itself from an income at the end of the year will not be recalculated as a tax payment upfront or known as a tax credit. Because no longer be recalculated as the advance tax payments at the end of the year. Income of final income tax also can no longer be re-calculated its income tax (should still be reported annual SPT) (Nugroho, 2009: 19).
Income Tax Rate
The provisions of the Income Tax Law article 17, paragraph (1) No. 36 In 2008, the amount of the tax rates applied to taxable income for tax payers in the country conducting business or activities in Indonesia through a permanent establishment in Indonesia as follows:
1. For the individual taxpayer in country
• Up to Rp. 50.000.000, - amounting to 5%
• Above Rp. 60,000,000, - up to Rp .; 250.000.000, - by 15%
• Above Rp. 250.000.000, - up to Rp. 500.000.000, - by 25%
• Above Rp. 500.000.000, - by 30%
2. To Mandatory Agency in country and business form Fixed
The tax rate domestic taxpayers and permanent establishments (BUT) by 28% (twenty-eight percent). The income tax rate to 25% (twenty five percent) began to apply the tax year 2010. The tax payer in the country in the form of an open company that is at least 40% (forty percent) of the total paid-up shares are traded on the stock exchanges in Indonesia and meet laiinya certain requirements can obtain a rate of 5% (five percent) is lower than the rate referred to in paragraph (1) letter b and paragraph (2) letter a is regulated by or based on Government Regulation.
Taxpayer in the country with a gross income in one (1) year up to 50 billion granted facilities in the form of a reduction of 50% of the rate referred to in Article 17 paragraph (1) letter b and paragraph (2a) which is levied on taxable income from part gross income of up to 4.8 billion (article 31 E Income Tax Act).
Tax management
Sophar Lumbantoruan as quoted by Suandy (2011, h.6) defines tax management is a way to meet the tax obligations correctly but the amount of tax paid can be as low as possible to obtain the expected profit and liquidity. Interest tax management is correctly applying tax laws in an effort to achieve efficiency of liquidity expected earnings. Interest tax management can be achieved through functions that Tax Planning, Implementation of Tax Obligations and Tax Control
Controlling Taxes (Tax Control)
Tax Control aims to ensure that the tax liability has been implemented in accordance with the planned and already meets the formal requirements and materially. In the control of important tax is the tax payment checks. Therefore, a command and control cash flow is very important in a tax saving strategies, such as tax payments made at the end is certainly more profitable than paying early.
Motivation does tax planning taxation comes from three elements:
1. Tax Policy
Taxation policy is an alternative to the various objectives to be addressed in the tax system. The existence of various types of tax liabilities to be paid where each type of taxes that have the nature and treatment respectively.
For example duty. Duties will be considered as deductible expenses of PKP or can be requested restitution if we do export goods. While income tax is a tax on profits or income can reduce the amount of net income after taxes. So in order not to disturb or accelerate cash flow of the company, needed a good tax planning so as to analyze the top of any transaction, what is taxable and what funds need to be known how the net income after tax.
2. Tax Policy
Taxation policy is an alternative to the various objectives to be addressed in the tax system. Of the various aspects of tax policy there are factors that encourage tax planning, namely:
a. Taxes to be levied
There are various types of taxes that should be the primary consideration in the form of direct taxes or indirect taxes and excise such as:
• Corporate Tax and OP
• Taxes on Capital Gains
• Withholding tax, salaries, wages, rent, interest, and royalties
• Taxes on the export, import and customs duties.
• Taxes on lottery / prize. revenue stamp
The existence of various types of tax liabilities to be paid where each type of tax treatment has its own properties eg import duty will be treated as deductible expenses of PKP or can be requested restitution if we do export goods. While income tax is a tax on profits or income can reduce the amount of net income after taxes. So in order not to disturb or accelerate cash flow of the company, the need for a good tax planning in order to analyze on what the transaction, what is taxable and what funds need to be known how the net income after tax.
3. Tax Law
We realize that the reality where there are no laws regulating the problem perfectly, then in practice is always followed by other provisions (PP, decree, KMK, and SE DJP), and not infrequently the implementing provisions were contrary to enactment law itself as tailored to the interests of policy-makers in achieving other goals to be achieved. This situation led to the emergence of a gap (loophole) for WP to analyze carefully on the opportunity to use a good tax planning.
4. Tax Administration
Indonesia is a country that is so vast and so populous region and as a country that is building are still experiencing difficulties in implementing the tax administration adequately. It prompted the company to carry out tax planning well in order to avoid administrative or criminal sanctions due to differences in interpretation between the tax authorities with WP, as a result of the breadth of tax regulations and information systems were not effective. In general motivation implementation of tax planning is to maximize the profit after tax Because of the tax influence in decision-making on an act in the operating company to invest by analyzing carefully and take advantage of opportunities or opportunities in the tax regulations are deliberately created by the government to provide different treatment on the tax object that is economically essentially the same, by utilizing the difference in tax rates (tax rate), the difference in treatment of the object to tax as the tax base (tax base), Loop hole (slit), shelter and haven.
1. Payment or compensation in respect of employment or services received or acquired, including salaries, wages, allowances, fees, commissions, bonus, gratuity, pension, or compensation in any other form, unless otherwise provided in this Law;
2. Gift of sweepstakes or work or activities, and awards;
3. Income from operations;
4. Gains from the sale or transfer of property, including:
a. Gains from transfer of property to the company, partnerships, and other entities in lieu of shares or equity
b. Gains derived by the company, unions and other entities for the transfer of property to shareholders, partners or members;
c. Advantages of a liquidation, merger, consolidation, expansion, split, or acquisition of business; gains from transfer of property in the form of grant aid or donation, except that given to the family by blood in the direct lineage of one degree, and religious bodies or educational institutions or social agencies or small businesses including cooperatives set by the Minister of Finance, as long as there is no relationship with the business, occupation, possession or
5. Acceptance of back tax payments as an expense;
6. Interest includes premiums, discounts and rewards for loan repayment guarantees;
7. Dividends, with the name and in any form including dividends from insurance companies policy holder, and the distribution of net income of the cooperative;
8. Royalties;
9. Rent and other income in connection with the use of property.
10. Acceptance or acquisition of periodical payments;
11. The advantage for debt relief, but up to a certain amount stipulated by government regulation;
12. Gain in foreign exchange rates;
13. Differences from revaluation of assets;
14. Insurance premiums;
15. Contributions are received or accrued association of members consisting of Mandatory
16. Taxes are running a business or independent;
17. Additional net wealth derived from income that has not been taxed.
Exceptions subject to tax under Article 4 paragraph (3) of the Income Tax Act are:
a. Aid donations, including zakat received by amil zakat board or other amil zakat institutions established or approved by the government and eligible zakat recipients and treasure gift received by the family of flesh in the direct lineage of one degree, and by religious bodies or educational institutions or charities or small enterprises including cooperatives established by the Minister of Finance; so long as no employment relationship with the business, ownership, or control between the parties concerned;
b. Heritage;
c. Of property, including cash deposits received by an entity referred to in Article 2 paragraph (1) letter b as stock replacement or as a substitute for equity;
d. Replacement or compensation in connection with the work or services received or acquired in kind and or enjoyment of the taxpayer or the government;
e. Payment of an insurance company to an individual in connection with health insurance, accident insurance, life insurance, endowment insurance, insurance and scholarships;
f. Dividends or share of profits derived by a limited liability company as a taxpayer in the country, cooperatives, State-Owned Enterprises.
Final Income Tax
Final Income Tax means tax (VAT), which has been cut or has paid for itself from an income at the end of the year will not be recalculated as a tax payment upfront or known as a tax credit. Because no longer be recalculated as the advance tax payments at the end of the year. Income of final income tax also can no longer be re-calculated its income tax (should still be reported annual SPT) (Nugroho, 2009: 19).
Income Tax Rate
The provisions of the Income Tax Law article 17, paragraph (1) No. 36 In 2008, the amount of the tax rates applied to taxable income for tax payers in the country conducting business or activities in Indonesia through a permanent establishment in Indonesia as follows:
1. For the individual taxpayer in country
• Up to Rp. 50.000.000, - amounting to 5%
• Above Rp. 60,000,000, - up to Rp .; 250.000.000, - by 15%
• Above Rp. 250.000.000, - up to Rp. 500.000.000, - by 25%
• Above Rp. 500.000.000, - by 30%
2. To Mandatory Agency in country and business form Fixed
The tax rate domestic taxpayers and permanent establishments (BUT) by 28% (twenty-eight percent). The income tax rate to 25% (twenty five percent) began to apply the tax year 2010. The tax payer in the country in the form of an open company that is at least 40% (forty percent) of the total paid-up shares are traded on the stock exchanges in Indonesia and meet laiinya certain requirements can obtain a rate of 5% (five percent) is lower than the rate referred to in paragraph (1) letter b and paragraph (2) letter a is regulated by or based on Government Regulation.
Taxpayer in the country with a gross income in one (1) year up to 50 billion granted facilities in the form of a reduction of 50% of the rate referred to in Article 17 paragraph (1) letter b and paragraph (2a) which is levied on taxable income from part gross income of up to 4.8 billion (article 31 E Income Tax Act).
Tax management
Sophar Lumbantoruan as quoted by Suandy (2011, h.6) defines tax management is a way to meet the tax obligations correctly but the amount of tax paid can be as low as possible to obtain the expected profit and liquidity. Interest tax management is correctly applying tax laws in an effort to achieve efficiency of liquidity expected earnings. Interest tax management can be achieved through functions that Tax Planning, Implementation of Tax Obligations and Tax Control
Controlling Taxes (Tax Control)
Tax Control aims to ensure that the tax liability has been implemented in accordance with the planned and already meets the formal requirements and materially. In the control of important tax is the tax payment checks. Therefore, a command and control cash flow is very important in a tax saving strategies, such as tax payments made at the end is certainly more profitable than paying early.
Motivation does tax planning taxation comes from three elements:
1. Tax Policy
Taxation policy is an alternative to the various objectives to be addressed in the tax system. The existence of various types of tax liabilities to be paid where each type of taxes that have the nature and treatment respectively.
For example duty. Duties will be considered as deductible expenses of PKP or can be requested restitution if we do export goods. While income tax is a tax on profits or income can reduce the amount of net income after taxes. So in order not to disturb or accelerate cash flow of the company, needed a good tax planning so as to analyze the top of any transaction, what is taxable and what funds need to be known how the net income after tax.
2. Tax Policy
Taxation policy is an alternative to the various objectives to be addressed in the tax system. Of the various aspects of tax policy there are factors that encourage tax planning, namely:
a. Taxes to be levied
There are various types of taxes that should be the primary consideration in the form of direct taxes or indirect taxes and excise such as:
• Corporate Tax and OP
• Taxes on Capital Gains
• Withholding tax, salaries, wages, rent, interest, and royalties
• Taxes on the export, import and customs duties.
• Taxes on lottery / prize. revenue stamp
The existence of various types of tax liabilities to be paid where each type of tax treatment has its own properties eg import duty will be treated as deductible expenses of PKP or can be requested restitution if we do export goods. While income tax is a tax on profits or income can reduce the amount of net income after taxes. So in order not to disturb or accelerate cash flow of the company, the need for a good tax planning in order to analyze on what the transaction, what is taxable and what funds need to be known how the net income after tax.
3. Tax Law
We realize that the reality where there are no laws regulating the problem perfectly, then in practice is always followed by other provisions (PP, decree, KMK, and SE DJP), and not infrequently the implementing provisions were contrary to enactment law itself as tailored to the interests of policy-makers in achieving other goals to be achieved. This situation led to the emergence of a gap (loophole) for WP to analyze carefully on the opportunity to use a good tax planning.
4. Tax Administration
Indonesia is a country that is so vast and so populous region and as a country that is building are still experiencing difficulties in implementing the tax administration adequately. It prompted the company to carry out tax planning well in order to avoid administrative or criminal sanctions due to differences in interpretation between the tax authorities with WP, as a result of the breadth of tax regulations and information systems were not effective. In general motivation implementation of tax planning is to maximize the profit after tax Because of the tax influence in decision-making on an act in the operating company to invest by analyzing carefully and take advantage of opportunities or opportunities in the tax regulations are deliberately created by the government to provide different treatment on the tax object that is economically essentially the same, by utilizing the difference in tax rates (tax rate), the difference in treatment of the object to tax as the tax base (tax base), Loop hole (slit), shelter and haven.