No Income but Still Need to do an Individual Annual Tax Report? – Even though the Taxpayer is not working or doesn’t have any income or considered as a non-taxable income, the Taxpayer is required to report the Annual Tax if the Taxpayer still has a Tax ID. But if the Taxpayer wants to remove the obligation of reporting the Annual Tax in the following year, the person needs to go to the Tax Office and ask the officer to assign themselves to Non-Effective (NE) status.
A Taxpayer is considered as a non-taxable income based on the Government Regulation if they have an income of IDR 54 million per annum or around IDR 4,5 million per month. If the company already deducted the salary for paying the tax, the Taxpayer/Employee needs to report the Annual Tax to check if the Employee has an income outside of the salary. Usually, the company who orderly paid the employee’s tax will give a summary of withholding tax certificate to the employee so they can easily fill the Annual Tax form based on the summary itself and declare themselves as a Zero Annual Tax. Thus to report the Annual Tax for individual/personal vary from directly visit the Tax Office, online, or via Post Office.
The problem is if the Employee has a side income outside of the salary, then the probability is there will be a short of tax payment as Indonesia applies a tax progressive system for the Taxpayer who has a total income more than IDR 54 million per annum, except the additional income which considered as “final” such as bank deposito or bank interest which is deducted by tax and based on the regulation is belong to the final taxable object, so does the bond ownership and stock for sale in Indonesia Stock Exchange (IDX), the transaction is already deducted by final tax.
Progressive system for tax is calculated per layer;
|≤ IDR 50 million
|IDR 50 – 250 million
|IDR 250 – 500 million
|> IDR 500 million
For example, someone has a net salary and bonus per annum of IDR 300 million, so the tax that needs to be paid will be IDR 45 million. It’s based on the calculation of 5% of the first layer IDR 50 million, plus 15% from IDR 200 million (second layer), and 25% from IDR 50 million (third layer, IDR 300 million). This is the total that the company needs to pay for his income tax.
The benefit of reporting the tax is to make people care about their bookkeeping and help Indonesia to be a better country. So, pay and report your Individual Tax diligently to avoid the penalty and to make you easier when reporting the next year’s tax.