The Tax Team of KAP Agus Ubaidillah dan Rekan (TGS AU Partners) will discuss the voluntary disclosure program or tax amnesty 2022.  This article was written by Yuli Aldyanti, SE, ACPA, BKP - Partner, Tax, KAP Agus Ubaidillah dan Rekan.

The Voluntary Disclosure Program or the term often used, the 2022 Indonesia Tax Amnesty is a program that provides the following facilities or relief to taxpayers:

  1. Taxpayers (individuals and entities) who are participants in the tax amnesty program according to the 2016 Tax Amnesty Law but there are assets (owned until the end of 2015) that have not been disclosed in the 2016 tax amnesty program. This condition is regulated by the HPP Law article 5 - article 7, hereinafter referred to as “Policy 1”; and

  2. Individual taxpayers who have not fully reported the assets in the 2020 annual income tax return (assets obtained from January 1, 2016 to December 31, 2020). This condition is regulated in the HPP Law article 8 - article 12, hereinafter referred to as "Policy 2")

When should taxpayers participate for Voluntary Disclosure Program or Indonesia Tax Amnesty 2022

Voluntary Disclosure Program or Indonesia Tax Amnesty 2022 is started from 1 January 2022 to 30 June 2022.

Benefits of the Voluntary Disclosure Program or Indonesia Tax Amnesty 2022 Policy 1

The benefits of the Voluntary Disclosure Program or Indonesia Tax Amnesty 2022 Policy 1 is Tax payers are not subject to administrative sanctions as referred to in article 18 paragraph (3) of Law no. 11 of 2016 regarding Tax Amnesty, which is an increase of 200% from unpaid or underpaid income tax.

Final Income Tax Rates Voluntary Disclosure Program or Indonesia Tax Amnesty Policy 1

Final Income Tax Rate From the Net Asset Value Disclosed

  • 11% for overseas asset declaration (LN)

  • 8% for overseas assets transferred to the country and domestic assets (DN)

  • 6% for repatriated overseas assets and domestic assets, which are invested in 1) business activities in the natural resources processing sector or the renewable energy sector within the territory of the Republic of Indonesia; and/or 2) Indonesian state bonds and securities

If the DGT finds other data and/or information regarding assets that have not been or are not disclosed

In the event that based on the results of the research, it is known that there is a discrepancy between the net assets disclosed and the actual situation, the DGT may correct or revoke the participation of taxpayers in the voluntary disclosure program.

Benefits of the Voluntary Disclosure Program or Indonesia Tax Amnesty 2022 Policy 2

Benefits of the Voluntary Disclosure Program or Tax Amnesty 2022 Policy 2 is No tax assessments will be issued for tax obligations in 2016 to 2020, unless other data or information is found regarding assets that have not been or are not disclosed.

Final Income Tax Rates Voluntary Disclosure Program or Indonesia Tax Amnesty Policy 2

Final Income Tax Rate

From the Net Asset Value Disclosed

  • 18% for overseas asset declaration (LN)

  • 14% for overseas assets transferred to the country and domestic assets (DN)

  • 12% for repatriated overseas assets and domestic assets, which are invested in 1) business activities in the natural resources processing sector or renewable energy sector within the territory of the Republic of Indonesia; and/or 2) Indonesian state bonds and securities

If the DGT finds other data and/or information regarding assets that have not been or are not disclosed

The value of net assets (undisclosed assets minus undisclosed debt) is treated as final income at a rate of 30% in the 2022 tax year and is subject to administrative sanctions which is interest penalty in accordance with the provisions of Article 13 paragraph (2) of the Law of General Provision of Tax through the issuance of Tax Assessment Letter by DGT.

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Things that need to be considered regarding the Indonesia tax amnesty 2022, if taxpayer does not report his assets completely

  1. Considering the option whether to revise the tax return or to participate in the voluntary disclosure program (tax amnesty 2022), based on an analysis of the taxpayer's income, assets and liabilities that have been reported versus real figures and measuring potential losses due to the tax audit.

  2. The value of the assets that will be disclosed in the voluntary disclosure program (tax amnesty 2022) is required to follow the provisions of the reference value set by the government for vehicles and land/building, the value published by the stock exchange for shares, or use an appraisal assessment or the value estimated by the taxpayers itself.

  3. Consider options for repatriation and type of investment of disclosed assets including the time frame of investment.

  4. There are requirements to cancel applications for tax restitution and tax legal remedies such as objections, appeals, lawsuits, and judicial reviews. Taxpayers need to consider which one provides greater benefit between participating in the voluntary disclosure program or ongoing tax legal efforts.

Disclaimer:

The material regarding the Voluntary Disclosure Program (Tax Amnesty 2022) is for informational purposes only, not as a suggestion to join the program. The decision to participate or not shall be each Taxpayer discretion. In the implementation of this program, there may be different interpretations of the regulations and it is a risk that is borne by the Taxpayer. This material is made succinctly so that there may be information that might affect taxpayers that is not covered in the material.

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