Utilization of Tax Incentives Realization Report – The Directorate General of Tax released a new regulation that provides an explanation and procedure for submitting reports on the realization of the use of tax incentives for taxpayers affected by the covid-19 pandemic.
The explanation is explained in the Director General of Tax Circular No. SE-29/PJ/2020 and Regulation of the Minister of Finance (PMK) No.44/PMK.03/2020. Taxpayers who utilize the tax incentives contained, are obliged to submit reports on the realization of the utilization of each incentive received. In addition, before submitting a report on the realization of the use of tax incentives, the taxpayer must ensure he has the right to use the facilities in PMK 44/2020 or not.
The realization report is needed as a basis for the Directorate General of Tax (DGT) to calculate the amount and value of the incentives provided. In addition, the realization report is also used for monitoring purposes so that the incentives given are right on target.
This report is a report that must be submitted to taxpayers who make use of tax incentives such as:
- Article 21 income tax (PpH) borne by the government (DTP);
- Final income tax (PPh) is borne by the government (DTP) (for micro, small and medium enterprises (MSMEs);
- Income tax (PPh) Article 22, exemption from importing income tax (PPh) import;
- Income tax (Pph) article 25, a decrease in the amount of the income tax installment (PPh).
The report was submitted through certain channels on the page www.pajak.go.id. The particular channel in question is the ‘Covid-19 Incentive e-Reporting’ feature on the Service menu by following these steps:
- Every taxpayer needs to activate the service features in the Profile menu before using the service. Then, click the Service feature and check the e-Reporting Incentive Covid-19 option then click change Service features;
- Open the Covid-19 Incentive e-Reporting feature on the Service menu;
- Add and select reports according to Covid-19 incentives that are utilized by clicking the Add icon.
In summary, to submit a realization report, the employer and / or taxpayer must download the format and type of the realization report file in accordance with the incentives used on the www.pajak.go.id page precisely on the Covid-19 Incentive e-Reporting feature. The report format for each type of incentive contains different components. An example of the format of the form is contained in appendix FMD 44/2020. In more detail, a summary of the components reported for each type of incentive can be seen in the elaboration below:
- In summary, the realization report of Article 21 PPh DTP covers the identity of the employer taxpayer, the number of employees entitled to receive incentives, the amount of gross income and Article 21 PPh during the relevant tax period, and a list of the identities of employees who receive incentives.
- In summary, the realization report of the final PPh DTP describes the identity of the taxpayer and the income tax payable on the income received or obtained by the taxpayer. The report also contains a summary of gross circulation of transactions with tax cutters or collectors.
- The realization report on the exemption of Article 22 of Income Tax contains taxpayer information and tax period. In addition, there is detailed import information that gets facilities starting from number, date of Import Declaration (PIB), import value, and import tax article 22 for each report
- The realization report of the reduction in the amount of installment of Article 25 Income Tax contains information on taxpayers and tax period of the report. In addition, there is also information related to the details of income tax payable and the amount of the installment reduction for each reporting period.
Furthermore, the realization report file that has been filled out completely and correctly and has been accompanied by a Tax Payment (SSP) or printed billing code in accordance with the provisions in PMK 44/2020 is uploaded through the same channel.
In accordance with the provisions of PMK 44/2020, in order to be able to take advantage of tax incentives in accordance with PMK 44/2020, employers and / or taxpayers have the obligation to submit reports on the utilization realization of each incentive received. Each incentive has its own provisions in its reporting.
- For reports on the use of Income Tax Article 21 incentives. Based on Article 4 paragraph (1), (2), and (3) PMK 44/2020, the employer must submit the realization of Article 21 PPT DTP through certain channels on the www.pajak.go.id page by using the form format according to the example listed in the Appendix letter E PMK 44/2020. In summary, the realization report of Article 21 Income Tax DTP includes the identity of the employer’s taxpayer, the number of employees entitled to receive incentives, the amount of gross income and Article 21 income tax at the relevant tax period, and a list of the identities of the employees receiving the incentives. Submission of income tax realization report Article 21 DTP is enclosed with a Tax Payment (SSP) or printed billing code affixed with stamp or the writing “PPh ARTICLE 21 is borne by the government and submitted by the employer no later than the 20th of the following month after the tax period ends.
- For the report on the utilization of DTP final PPh incentives. Pursuant to Article 7 paragraph (1) through paragraph (5) of PMK 44/2020, taxpayers who have certain gross circulation who utilize the final PPH DTP incentives must also submit realization reports through certain channels on the www.pajak.go.id page and must arranged according to the format of the form listed in Attachment letter H PMK 44/2020. In summary, the DTP final PPh realization report includes the identity of the taxpayer and the income tax payable on the income received or obtained. The report also contains a summary of gross circulation of transactions with tax cutters or collectors. As for taxpayers who pay the UMKM final PPh through cutters or collectors, the cutter or collector must make an SSP or print a billing code affixed with a stamp or the inscription “Final PPh borne by the government. The realization report must be attached with the SSP or printed billing code in accordance with the provisions above, then, the realization report and its attachments are submitted no later than the 20th of the following month after the end of the tax period The procedures for submitting the realization report of the use of this incentive are also regulated further in Circular Letter No. SE-29/PJ/2020 which is the implementing regulation of PMK 44/2020. In this circular it is stated that employers and / or taxpayers can download the format and file types of realization report of PPh Article 21 DTP and final DTP PPh on page www.pajak.go.id.
Meanwhile, reports on the realization of exemption from collecting Article 22 income tax and reducing installments of Article 25 income tax were uploaded in accordance with the two deadlines set in PMK 44/2020.
- Not later than July 20, 2020 for the April 2020 tax period to the June 2020 tax period.
- October 20, 2020 for the July 2020 tax period to the September 2020 tax period. If the employer and/or taxpayer has not submitted the realization report until the specified date, the DGT information system will provide notification to the employer / taxpayer Account Representative concerned. Furthermore, the notification will be followed up in accordance with the provisions of the legislation in the field of taxation.
However, currently there is only reporting access to the ‘Covid-19 Incentive e-Reporting’ feature available for Article 21 DTP PPh and DTP final PPh for MSMEs.
As a further explanation, if the employer and/or the taxpayers still have not submitted the realization report until the date specified, the information system of the Directorate General of Taxes will provide a reminder in the form of a notification to the account owner of the employer and/or taxpayer concerned.
If you have difficulties in submitting a report on the realization of the use of tax incentives. We are Indoservice, a trusted and experienced Tax Service Provider, ready to help with the best service and also fast to handle your needs in taxation, don’t hesitate to contact us immediately and get the best deals.