Tax Amnesty Plan Vol. 2 in the General Provisions and Tax Procedures Draft Bill
In the General Provisions and Tax Procedures Draft Bill (RUU KUP), the Government re-inserts articles related to Law No. 11 the Year 2016 concerning Tax Amnesty. The rules regarding the tax amnesty are inserted in Articles 37B to 37I.
Functions of the General Provisions and Tax Procedures Draft Bill
In article 18 Law No. 11 the Year 2016 explained that for assets that have not been or are not disclosed in the statement letter, then the assets will be considered as additional income and subject to income tax in accordance with the provisions of the legislation in the field of income tax and added with administrative sanctions in the form of an increase of 200% of unpaid or underpaid income tax. However, with the RUU KUP, we can avoid this 200% increase by reporting back assets that have not been or are not disclosed through a statement letter in accordance with Law No. 11 of 2016.
Income Tax Calculation for Unreported Assets
Article 37B explains that net assets reported in the statement will be considered as final income and calculated by multiplying the rate with the tax base. The rate is:
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15%; or
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12.5% ??for taxpayers who declare to invest net assets as referred to in paragraph (1) into state securities instruments
Assets disclosed are assets acquired by taxpayers from January 1, 1985, to December 31, 2015. However, individual taxpayers may disclose assets acquired from January 1, 2016, to December 31, 2019, on the condition that they are still owned as of December 31, 2019, and have not been reported in the Individual Income Tax Return for the year 2019. The rates imposed for the disclosure of assets for the period January 1, 2016, to December 31, 2019, are:
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30%; and
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20% for individual taxpayers who declare to invest assets as referred to in Article 37E paragraph (1) into state securities instruments.
If after the issuance of the Certificate, the DGT finds assets that are under or undisclosed, then the assets are considered as additional final income in 2021, subject to an income tax rate of 30% and subject to administrative sanctions in the form of interest in accordance with the provisions of Article 13 paragraph (2) through the issuance of an underpaid tax assessment by the DGT.
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Ratification of the KUP Bill by the DPR
If the KUP Draft Bill is passed by the House of Representatives, then there will be Tax Amnesty Volume II that can be used by taxpayers to report assets that have not been reported in the Annual Corporate and Individual SPT or which have not been reported in Tax Amnesty Volume I in 2016.
Tax Amnesty Volume II is planned to take place from July 1, 2021, to December 31, 2021.
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