Starting January 1, 2022, this is the Tax Amnesty Volume II Scheme

The government and the House of Representatives (DPR) have agreed to discuss Level I of the Draft Law on the Harmonization of Tax Regulations (RUU HPP). One that is regulated is tax amnesty or Tax Amnesty.

Deputy Chairman of Commission XI of the House of Representatives, Dolfie, who is also the Chair of the Working Committee on the HPP Bill, revealed that the first phase of the discussion of the HPP Bill has been completed and the bill has been initialed by various parties involved.

“Phase I has been completed. The bill has been initialed by the head of the commission, the head of the office, and government representatives,” explained Dolfie to CNBC Indonesia, Thursday (30/9/2021).

The Ministry of Finance’s Tax Supervision Expert Staff, Nufransa Wira Sakti, revealed that the Tax Regulation Harmonization Bill (RUU) will be ratified next week.

“Not today. Next week, hopefully (the HPP Bill will be passed),” he said

Then what about the Tax Amnesty scheme in the HPP Bill?

Dolfie said that the tax amnesty in the HPP Bill is not called Tax Amnesty. “But the taxpayer’s voluntary disclosure program,” he said.

From the draft HPP Bill received by CNBC Indonesia, there are two schemes for the taxpayer voluntary disclosure program.

It is explained, taxpayers can disclose net assets that have not been or are not disclosed in the statement letter as long as the Director General of Taxes (DGT) has not found data and/or information regarding the said assets.

“The net assets in question are the value of assets minus the value of debt as referred to in Law Number 11 of 2016 concerning Tax Amnesty,” explained the bleid draft of the HPP Bill.

As quoted in Article 5 of the draft HPP Bill, assets acquired and reported by taxpayers from January 1, 1985 to December 31, 2015, are calculated by multiplying the rate by the tax base. What is stipulated as follows, as quoted in Article 7:

a. 6% (six percent) of net assets located within the territory of the Unitary State of the Republic of Indonesia, provided that it is invested in:

1. business activities in the natural resources processing sector or the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or
2. state securities;
b. 8% (eight percent) of net assets located within the territory of the Unitary State of the Republic of Indonesia and not invested in:
1. business activities in the natural resources processing sector or the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or
2. state securities;/

c. 6% (six percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia, provided that:
1. transferred to the territory of the Unitary State of the Republic of Indonesia; and
2. invested in:
a) business activities in the natural resources processing sector or renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or
b) state securities;
d. 8% (eight percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia with the following provisions:
1. transferred to the territory of the Unitary State of the Republic of Indonesia; and
2. not invested in:
a) business activities in the natural resources processing sector or renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or
b) state securities;
e. 11% (eleven percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia and not transferred to the territory of the Unitary State of the Republic of Indonesia.

The basis of tax imposition is the amount of net assets that have not been or are not disclosed in the statement letter. The value of the assets used as a guide for calculating the amount of net assets is also calculated according to five provisions.

First, the nominal value for assets in the form of cash or cash equivalents. Second, the value determined by the government is the Tax Object Selling Value (NJOP) for land and/or buildings. As well as the selling value of motorized vehicles for motorized vehicles.

The third provision for disclosure of net assets, namely the value published by PT Aneka Tambang Tbk., for gold and silver. Fourth, the value published by the Indonesia Stock Exchange, for shares and warrants traded on the Indonesia Stock Exchange.

Fifth, the value published by PT Penilai Harga Efek Indonesia, for state securities and debt securities and/or sukuk issued by companies,

according to the condition and condition of the assets at the end of the last Fiscal Year.

If there is no value that can be used as a guideline with the 5 provisions above, then the value of the property is determined based on the value of the assessment results of the public appraiser service office.

The second tax amnesty scheme is to disclose net assets through a notification letter for disclosure of assets submitted to the DGT from 2016 to 2020.

Here are the rates details:

12% (twelve percent) of net assets located within the territory of the Unitary State of the Republic of Indonesia, provided that it is invested in:

business activities in the natural resources processing sector or in the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or state securities;
14% (fourteen percent) of net assets located within the territory of the Unitary State of the Republic of Indonesia and not invested in:

business activities in the natural resources processing sector or in the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or state securities;
12% (twelve percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia, provided that:

transferred to the territory of the Unitary State of the Republic of Indonesia; and invested in: business activities in the natural resources processing sector or in the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or state securities; 14% (fourteen percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia with the following provisions: transferred to the territory of the Unitary State of the Republic of Indonesia; and not invested in: business activities in the natural resources processing sector or in the renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or state securities;

18% (eighteen percent) of net assets located outside the territory of the Unitary State of the Republic of Indonesia and not transferred to the territory of the Unitary State of the Republic of Indonesia.

The basis of tax imposition as referred to in paragraph (2) is the amount of net assets that have not been or are under-reported in the Annual Income Tax Return of individuals for the 2020 Fiscal Year.

The value of assets used as a guideline for calculating the amount of net assets as referred to in paragraph (4) is determined based on: nominal value, for assets in the form of cash or cash equivalents; or cost, for assets other than cash or cash equivalents.

Tax amnesty mechanism

The notice of disclosure of the property must be accompanied by:

a. final proof of income tax payment
b. a detailed list of assets along with information on property ownership reported
c. debt list
d. statement of transferring net assets into the territory of the Unitary State of the Republic of Indonesia, in the event that the Taxpayer intends to transfer net assets located outside the territory of the Unitary State of the Republic of Indonesia into the territory of the Unitary State of the Republic of Indonesia

e. statement will invest net assets in:

– business activities in the natural resources processing sector or renewable energy sector within the territory of the Unitary State of the Republic of Indonesia; and/or
– state securities, in the event that the Taxpayer intends to invest the net assets as referred to in Article 5 paragraph (7) letter a and letter c.
After the Taxpayer attaches his obligations above, the DGT will then issue a certificate of submission of the notification of the disclosure of assets by the Taxpayer.

However, if based on the results of the research it is known that there is a discrepancy between the disclosed net assets and the actual situation, the DGT may correct or cancel the certificate.

Meanwhile, Taxpayers who have obtained a certificate by the DGT are not subject to administrative sanctions as referred to in Article 18 paragraph (3) of Law Number 11 of 2016 concerning Tax Amnesty.

It is also known that the government does not allow the notification of disclosure of assets and attachments by the taxpayer as a basis for investigation, investigation, and/or criminal prosecution against taxpayers.

“Data and information sourced from the notification letter on the disclosure of assets and its attachments which are administered by the Ministry of Finance or other parties related to the implementation of this Law cannot be used as a basis for investigation, investigation, and/or criminal prosecution against taxpayers,” as quoted Article 6 CHAPTER V concerning the Program for Voluntary Disclosure of Taxpayers in the HPP Bill.

Further provisions regarding the procedure for disclosing net assets are regulated by a Regulation of the Minister of Finance.