1. If the gross circulation is above IDR 50 billion, it will be calculated according to Article 17 paragraph (1) b of the HPP Law, without the facility of reducing tariffs. The corporate income tax rate is 22% x taxable income.
Mentioned in Article 17 paragraph (1) part b of Law no. 7 of 2021 concerning Harmonization of Tax Regulations (HPP), the tax rate applied to Taxable Income for domestic Corporate Taxpayers and permanent establishments of 22% comes into force in the 2022 tax year.
2. Domestic corporate taxpayers in the form of a public company with the total number of paid-up shares traded on the stock exchange in Indonesia at least 40% and meeting certain requirements as stipulated in Article 65 PP No. 55 of 2022 can obtain a rate of 3% lower than 22% or the rate is only 19%.
This is regulated in Article 17 paragraph (2) b of the HPP Law. To be able to get this rate, all the requirements above must be met. If there are requirements that are not met, then the rate is according to point a above. Previously, the Income Tax Law applied a 17% rate.
3. Tariff according to Article 31E paragraph (1) First Type of Income Tax Law.
The condition is that the gross turnover of Corporate Taxpayers is up to IDR 4.8 billion.
If the circulation of business exceeds this limit, then this tariff may not be used.
Income Tax payable is calculated at 50% x 22% x taxable income or only 11% x taxable income. 50% lower than in point a above.
This rate is still valid because it was not removed in the HPP Law. For Corporate Taxpayers who cannot use the Final Income Tax rate of 0.5% of their business circulation because they are no longer within the period when they are allowed to use Final Income Tax, they can still use this facility.
Example:
PT Y’s gross circulation in the 2022 tax year is IDR 4,500,000,000.00 with taxable income of IDR 500,000,950.00.
Taxable income is first rounded in full thousands down to IDR 500,000,000.00. All taxable income derived from gross turnover is subject to a rate of 50% of the applicable Corporate Income Tax rate because PT Y’s gross turnover does not exceed Rp.4,800,000,000.00.
Income tax payable: (50% x 22%) x IDR 500,000,000.00 = IDR 55,000,000.00
4. Rates according to Article 31E paragraph (1) Type Two of the Income Tax Law.
If the gross turnover is between IDR 4.8 billion and IDR 50 billion, then corporate taxpayers get a rate reduction facility of 50% of the rate imposed on taxable income from gross turnover which amounts to IDR 4.8 billion.
This is regulated in Article 31E paragraph (1) of the Income Tax Law. This rule was also not deleted in the HPP Law, so it is still in effect.
Further arrangements for Article 31E paragraph (1) of PPh facilities can be found in the Circular Letter of the Director General of Taxes. There it is stated that the rate reduction facility in Article 31E paragraph (1) of the Income Tax Law is not an option, so that for domestic Corporate Taxpayers who have an accumulated gross turnover of up to IDR 50 billion, the PPh rate applied to taxable income for Corporate Taxpayers in the country must follow the provisions of tariff reduction.
5. The tariff is 0.5% of business turnover every month and is final.
This applies according to Article 69 PP No. 55 of 2022 concerning Adjustment of Regulations in the Field of Income Tax, as long as Corporate Taxpayers still meet the criteria to be subject to final Income Tax.