The tax payment itself is a manifestation of state obligations and the participation of taxpayers/society. In accordance with the philosophy of tax legislation, paying taxes is not only an obligation, but is the right of every citizen to participate in the form of a role to encourage growth and national economic development.
Programs that provide health, education, infrastructure, and other services are essential to achieving the common goal of a prosperous, functional, and orderly society.
The government needs a sustainable source of funding for social programs and public investments. The government designed a tax compliance system that would not discourage taxpayers from participating.
Below we will discuss, is it possible as a taxpayer to deactivate tax obligations/revoke the taxpayer number/NPWP based on applicable regulations?
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What is a Taxpayer?
In Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, the latest by Law Number 28 of 2007 (UU KUP), it is stated that taxpayers are individuals or entities, including taxpayers, tax cutters, and tax collectors, who have tax rights and obligations in accordance with the provisions of tax laws and regulations.
Who is a Taxpayer?
Taxpayers, based on and explanations in Law Number 7 of 1983 concerning Income Tax as amended several times, most recently by Law Number 36 of 2008 (PPh Law) are as follows;
1. Individual Taxpayers:
+ Individual Taxpayers Who Have Income From Business
+ Individual Taxpayers Who Have Income From Free Work
+ Individual Taxpayers Who Have Income From Work
2. Corporate Taxpayers:
+ Government-owned entities (BUMN and BUMD)
+ Privately owned entities (PT, CV, Cooperatives, Institutions and Foundations)
3. Treasurer Taxpayers as tax collectors and withholders:
+ Central Government Treasurer
+ Local Government Treasurer
What are the Rights of Taxpayers?
This Taxpayer has been regulated in the Law on General Provisions and Tax Procedures. So, what are the rights and obligations in meaning ?
- Rights in the event that the Taxpayer is audited
- The right to object, appeal and review
- The right to overpayment of taxes
- Right of prepayment of overpayment of tax
- Right to installment or deferment of payment
- Right of confidentiality
- Land and building tax deduction rights (PBB)
- The right to postpone the annual SPT reporting
- Tax exemption rights
- The right to reduce income tax Article 25
- The right to get tax incentives
- The right to get taxes is borne by the government
In addition to being entitled to do the various things above, taxpayers must also comply with various tax obligations. Here are some of them:
Taxpayer’s Various Obligations
- Obligation to register
- Obligation to provide data
- Obligations of payment, reporting, collection/withholding of taxes
- Obligation of inspection
Every Indonesian citizen who has fulfilled the requirements to pay taxes is required to have a Taxpayer Identification Number (NPWP). To note, NPWP can be deactivated or revoked.
When having a NPWP, a person has tax rights and obligations that he must fulfill, one of which is reporting taxes through the Annual SPT. If they do not report, the taxpayer will be subject to a fine, which is IDR. 100.000.
However, if a taxpayer no longer has income or no longer works, then he can deactivate his own NPWP.
The rules for deactivating NPWP so that they become non-effective taxpayers (NE) are based on SE-27/PJ/2020 which states that non-effective taxpayers are taxpayers who no longer meet subjective and/or objective requirements but have not removed their NPWP.
NE taxpayer status itself can only be carried out by the KPP (Tax Service Office) or DGT.
Who can Apply for Deactivating NPWP?
Based on PER-04/PJ/2020, there are several conditions under which the DGT can give approval for a taxpayer to become a NE taxpayer. Here below:
- An individual Taxpayer who carries out business activities or independent work who is actually no longer carrying out business activities or independent work.
- Individual Taxpayers who do not carry out business activities or independent work and whose income is below the PTKP.
- An individual Taxpayer as referred to in letter b who has a NPWP to be used as an administrative requirement, among others, to obtain a job or open a financial account.
- An individual taxpayer who resides or is abroad for more than 183 days within a period of 12 months who has been proven to be a foreign tax subject in accordance with the provisions of laws and regulations in the field of taxation and does not intend to leave Indonesia for good.
- Taxpayers who apply for NPWP deletion and a decision has not yet been issued.
- Taxpayers who do not submit SPT and/or there are no tax payment transactions either through self-payment or through withholding or collection of other parties, for 2 consecutive years.
- Taxpayers who do not meet the provisions regarding the completeness of the NPWP registration documents as referred to in Article 10 paragraph (7).
- Taxpayer whose address is unknown based on field research.
- Taxpayers who are issued a Branch NPWP in ex officio in the context of issuing SKPKB of Value Added Tax for self-construction activities.
- Government agencies that do not meet the requirements as tax withholders and/or collectors but have not deleted their NPWP.
- Taxpayers other than those referred to in letter a to letter j that no longer meet the subjective and/or objective requirements but have not deleted their NPWP.
How to Deactivate NPWP?
- Fill out the application form for the determination of non-effective taxpayers, either through the e-registration application on the www.pajak.go.id page or fill in directly at the KPP.
- Prepare the required documents, which show that the taxpayer meets the criteria as a NE taxpayer. The deadline for submitting files or documents is 14 days. If all documents are received complete, KPP will issue receipts electronically.
After that, KPP will conduct tax administration research. If the application is approved, the KPP will send a notification to the taxpayer concerned. After that, the DGT Head Office will provide the code ‘NE’ on the profile or data of the relevant taxpayer.
To remember, NE taxpayers can also reactivate their NPWP by submitting an application to the KPP, including attaching data showing the taxpayer concerned is no longer included in the criteria for NE taxpayers.
Revocation Tax /NPWP
The revocation of NPWP refers to the Regulation of the Director General of Taxes PER-20/PJ/2013 Article 9 Paragraph 1. It is explained that the abolition of NPWP may be carried out on taxpayers who no longer meet the subjective and/or objective requirements according to the tax laws.
Who can Apply for NPWP Revocation?
The revocation of the NPWP must be carried out based on the results of the examination or verification results in accordance with the tax laws and regulations governing the procedures for examination or verification.
The following is a Taxpayer who does not meet the subjective and objective requirements, can apply for revocation of NPWP by submitting an application.
- Individual Taxpayers Who Have Died and Don’t Leave an Inheritance;
- Individual Taxpayers Who Have Left Indonesia Forever;
- Married woman who previously had a NPWP and wanted to carry out her tax obligations combined with her husband;
- Individual Taxpayers with the Status as Commissioners, Shareholders/Owners, or Employees and their Net Income Does not Exceed PTKP;
- Children who are not yet 18 (eighteen) years old and have never been married, who already have a NPWP and wish to carry out their tax obligations are combined with the head of the family;
- The Inheritance Taxpayer has not been divided in the event that the Inheritance has been Completed;
- Corporate Taxpayer Liquidated or Disbanded Due to Termination or Business Merger;
- Taxpayers with permanent establishments who have ceased their business activities in Indonesia;
- Government Agencies that No longer Meet the Requirements as Tax Withholders and/or Collectors;
- Taxpayers who have more than 1 (one) NPWP, excluding Branch NPWP;
What are the Required Documents?
Documents submitted for the revocation of the Taxpayer Identification Number/NPWP are:
- NPWP Revocation Application Form
- Supporting documents in accordance with the conditions of the Taxpayer as follows:
Individual Taxpayers Who Have Died and Don’t Leave an Inheritance:
+ Death certificate or similar documents from the competent authority, and
+ A statement that does not have an inheritance or a statement that the inheritance has been divided by mentioning the heirs.
Notes: The application can be submitted by one of the heirs, executor of the will, or the party who manages the inheritance.
Individual Taxpayers Who Have Left Indonesia Forever:
+ Document stating that the Taxpayer has left Indonesia for good.
Married woman who previously had a NPWP and wanted to carry out her tax obligations combined with her husband:
+ Photocopy of marriage certificate or similar documents, and
+ A statement from the married woman that: does not make an agreement on the separation of assets and income; or do not want to exercise their rights and fulfill their tax obligations separately from their husbands.
Individual Taxpayers with the Status as Commissioners, Shareholders/Owners, or Employees and their Net Income Does not Exceed PTKP:
+ Document stating that the Taxpayer no longer has obligations as Treasurer.
Children who are not yet 18 (eighteen) years old and have never been married, who already have a NPWP and wish to carry out their tax obligations are combined with the head of the family:
+ Family Card.
The Inheritance Taxpayer has not been divided in the event that the Inheritance has been Completed:
+ Statement letter from the Taxpayer’s representative stating that the inheritance has been divided by mentioning the heirs.
Applications can be submitted by:
– one of the heirs;
– executor of wills;
– the party who manages the inheritance; or a proxy from the representative of the Undistributed Inheritance Taxpayer
Corporate Taxpayer Liquidated or Disbanded Due to Termination or Business Merger:
+ Photocopy of the deed of dissolution of the Agency or similar documents that have been ratified by the competent authority in accordance with the provisions of the legislation.
Taxpayers with permanent establishments who have ceased their business activities in Indonesia:
+ Photocopy of the document for the termination of the business activity.
Government Agencies that No longer Meet the Requirements as Tax Withholders and/or Collectors:
+ Reasons for deleting the NPWP of Government Agencies:
– no longer operates as a Government Agency;
– dissolution of Government Agencies due to merger of Government Agencies;
– does not receive a budget allocation in the following fiscal year; or
– no longer operating due to other causes;
Supporting Documents required are financial statements in accordance with the provisions of laws and regulations governing the implementation of liquidation of accounting entities and accounting reporting at state ministries/agencies.
Applicants for the Elimination of NPWP for Government Agencies are those in charge of the liquidation process of Government Agencies.
Taxpayers who have more than 1 (one) NPWP, excluding Branch NPWP
+ statement letter that the Taxpayer has more than one NPWP; and
+ photocopy of all NPWP cards owned.
How Long does the Revocation Process Take?
The period of completion of the application for revocation of the Taxpayer Identification Number/NPWP:
- 6 (six) months for Personal Taxpayers, Undistributed Inheritance Taxpayers, and Government Agency Taxpayers; and
- 12 (twelve) months for Corporate Taxpayers.
The Difference Deactivating & Revoking NPWP
Deactivating the NPWP is not the same as Revoking the NPWP. NPWP abolition taxpayers are taxpayers who no longer meet subjective and objective requirements and have deleted their NPWP. In other words, the taxpayer’s identification number is not valid, aka ‘dead’ permanently. If the taxpayer wants to turn it on again, must make a new NPWP.
While Deactivating the NPWP means that the taxpayer’s identification number is only temporarily inactive. Taxpayers can activate it again by going through the applicable procedures.
Based on the explanation above. In fact, taking care of deactivating NPWP is not too difficult for taxpayers. And taxpayers who have not met the subjective or objective requirements, can also manage/submit an application for revocation of NPWP. Both can be done in writing to the Tax Service Office (KPP) where it is registered directly or online.
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