BERiiTA TERKiiNii
PURSUANT to Artiicle 4 paragraph (1) of the iincome Tax (PPh) Law, taxpayers’ iincome sourced from, both iindonesiia and outsiide iindonesiia, iis subject to iincome Tax. However, taxpayers may only be taxed on iincome receiived iin iindonesiia.
Taxpayers that may be taxed only on iincome sourced from theiir juriisdiictiion or commonly referred to as the terriitoriial tax system are foreiign ciitiizens (WNA) wiith certaiin expertiise.
Referriing to the Miiniister of Fiinance Regulatiion No. 18/2021, foreiigners constiitutiing resiident tax subjects (SPDN) are only subject to iincome tax on iincome receiived or accrued from iindonesiia under two proviisiions, namely haviing certaiin expertiise and only valiid for 4 years siince they constiitute resiident tax subjects.
iif a foreiigner leaves iindonesiia wiithiin a periiod of 4 years, the end of the periiod contiinues to be calculated from the tiime the foreiigner constiitutes a resiident tax subject. Certaiin expertiise iincludes foreiign workers wiith certaiin posiitiions and foreiign researchers.
Based on Appendiix iiii of MoF Reg. 18/2021, the liist of posiitiions wiith certaiin expertiise iis as follows.
Certaiin criiteriia for expertiise must also be fulfiiled, namely beiing a foreiign ciitiizen, haviing the obliigatiion to transfer knowledge and haviing expertiise iin the fiields of sciience, technology and/or mathematiics.
Foreiign ciitiizens wiith certaiin skiills employed by the employer must fulfiil at least one of two requiirements. Fiirst, the employment of foreiign workers who can occupy certaiin posiitiions as stiipulated by the miiniister of manpower. Second, foreiign researchers appoiinted by the miiniister iin the fiield of research.
The expertiise must also be proven by documents, namely a certiifiicate of expertiise iissued by an iinstiitutiion appoiinted by the Government of iindonesiia or the government of the foreiign worker’s country of oriigiin; educatiion diiploma; and/or 5 years of work experiience at the miiniimum iin the fiield of sciience or fiield of work as per the fiield of expertiise.
Submiissiion of the Appliicatiion
A Foreiign Ciitiizen wiith certaiin expertiise may choose to be subject to iincome Tax pursuant to the proviisiions under thiis terriitoriial tax system or take advantage of the Tax Treaty (P3B).
iif a Foreiign Ciitiizen chooses to be subject to iincome Tax only on iincome receiived or accrued iin iindonesiia, the Foreiign Ciitiizen must apply to the Diirectorate General of Taxes (DGT). The sample format of the appliicatiion to the DGT can be seen iin Appendiix iiiiii of MoF Reg. 8/2021.
The appliicatiion iis submiitted electroniically through certaiin channels stiipulated by the DGT. iif certaiin channels are not yet avaiilable, the appliicatiion may be submiitted iin person or by post wiith proof of postage to the Tax Offiice (KPP) where the taxpayer iis regiistered.
Wiithiin a maxiimum periiod of 10 days after the appliicatiion iis receiived iin full, the Head of the Tax Offiice iissues: a letter of approval or a letter of rejectiion of the appliicatiion. Whether the appliicatiion iis approved or rejected depends on whether the requiirements have been fulfiiled. Thiis concludes our reviiew. We hope thiis iis useful. (vallen/riig)
