The Instalment Reduction of Income Tax Article 25 to Increase to 50 Percent – The government finally objectified the plan to increase the amount of the Article 25 Income Tax instalment deduction to 50 percent. This regulation renewal is outlined in the Minister of Finance Regulation (PMK) No.110 of 2020 concerning Amendments to PMK Number 86 / PMK.03 / 2020 about Tax Incentives for Taxpayers Affected by the Pandemic COVID-19. In PMK 8/2020, the amount of the Income Tax Article 25 instalment deduction previously stood at 30 percent.
The Directorate General of Taxes (DGT), said that taxpayers (WP) who are engaged in 1,013 certain business fields, companies that obtain import facilities for export purposes, as well as companies in bonded zones, are entitled to additional reductions for income tax article 25 installments from the previous payable reduction of 30 percent of the installment amount to 50 percent.
Similar with other tax stimulus, the procedure for obtaining this tax stimulus is very simple, taxpayers only need to submit notifications online through the Directorate General of Tax’s website. This tax installment relief for all taxpayers is given due to the current economic conditions, especially with the low level of production and sales of the business worldwide.
For taxpayers who have previously submitted an installment reduction notification, this stimulus will take effect since the tax period of July 2020, while for other taxpayers, the reduction in installments will take effect since the notification is submitted. This reduction in tax installments is valid until the tax period of December 2020.
Another provision stipulated in this PMK-110 is the final income tax for construction services borne by the government for taxpayers in the program to accelerate the improvement of irrigation water use (P3-TGAI). This tax incentive is valid until December 2020 and is intended to support the increased water supply (irrigation) as a labor-intensive project which is an important requirement for the agricultural sector. Complete arrangements including details of industries that are entitled to the facility, examples of calculation, and the format of the facility utilization realization report can be seen in PMK No. 110/2020 which came into effect on August 14, 2020.
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