A foreign company called PT PMA, after starting to operate in Indonesia, of course, has prepared tax and financial issues or accounting management. It is an obligation for PT. PMA pays taxes and reports the company’s financial status regularly, usually, they use a tax and accounting service consultant.
Foreign businessmen who have established a PT PMA in Indonesia, are required to pay taxes as well as taxpayers who pay in various countries including monthly and annual tax deductions, monthly and annual income taxes, Value Added Tax (VAT), Luxury Goods Sales Tax ( LGST) —if only, along with the company’s investment plans.
All taxes must be paid at the local tax office, where the company office is located. However, if you have difficulty or are still confused about the payment procedure, please contact the tax and accounting services nearest to your area.
Tax laws & regulations for PT PMA
When a PT PMA has a domicile letter in Indonesian territory, it will be treated as an Indonesian taxpayer, so the company has an obligation as a resident taxpayer. Taxation regulations in Indonesia combine both a self-assessment system and an income tax system.
To find out more about tax laws and regulations, the Indonesian government has published:
General Provisions and Taxation Law no. 28 of 2007;
Income Tax Law No. 36 of 2008;
The Value Added VAT (called “Tax on Goods and Services and Sales on Luxury Goods”) law No. 42 of 2009.
To fulfill the obligation to pay taxes, according to tax and accounting services, PT PMA can choose one of these two options:
- Hire a tax and accounting service to do all tax reporting and payments.
- Find tax and accounting services to help companies deal with taxes.
- All tax reports and documents must be sent to the local tax office, where your main head office is located (registered address), which can be assisted by the nearest tax and accounting services consultant.
Schedule of tax payments in Indonesia
Usually, the tax payment schedule has to be paid every month and to provide a wider picture of the tax schedule in Indonesia, we provide a brief overview below:
- Corporate taxes that must be reported monthly include Corporate Income Tax, Withholding Tax, Other Withholding Taxes, as well as VAT and LGST. This tax is usually paid before the 10th of the following month for withholding taxes and before the 15th of the following month for Corporate Income Tax.
The first three taxes must be filed or reported before the 20th of the following month, while especially for VAT and LGST, they must be reported at the end of the following month, if you have trouble reporting you can ask the help of the nearest tax and accounting services consultant.
- The tax and accounting services consultant will tell you, taxes payable annually include Corporate Income Tax, Personal Income Tax, and Land and Building Tax (both for offices and factories or warehouses – if any). The deadline for the first two is before filing the tax return, and the time limit for the latter is 6 months after receiving the tax return from the tax office.
Warning if there is a delay in paying taxes
There was a tax penalty
Late payment of corporate and individual taxes in Indonesia can result in fines. Taxpayers have to pay interest of 2% per month for late fees.
For this reason, it is advisable to follow strict deadlines and the need for a tax and accounting services consultant to take care of all tax payment needs so that there are no delays, because only one working day is late, it will be counted as a month’s penalty.
Conducting a Tax Audit
It is not an obligation for corporate taxpayers to conduct financial audits conducted by public accountants. The local tax office will not place interest in your company if you always provide complete data or documents during your tax reporting period.
It is also important to ensure that you never miss any deadlines and follow all rules and regulations that are applied by Indonesian tax regulations. For that, the best solution for your tax problems is as follows:
1) Using tax and accounting services consultants
Tax and accounting services consultants are people who provide tax and accounting services to taxpayers and companies. But, why do we need tax and accounting services?
To help answer that question, here is a brief review of the tax consultant that you need to read. The hope is that you will gain a basic understanding of this profession so that it can help you decide whether tax and accounting services are important or not.
What is a tax and accounting services consultant?
A tax and accounting services consultant is a person who provides tax and financial consulting services to taxpayers in the framework of exercising their rights and fulfilling their tax obligations following tax laws and regulations.
That is, a tax and accounting services consultant is a person whose job is to help taxpayers take care of all matters relating to taxes and corporate or personal finances. So that those who use these services can carry out their tax obligations properly.
Currently, in Indonesia, many companies use tax and financial consulting services in the context of company efficiency.
The following are services that are usually provided by tax and financial service consultants to their service users:
Tax and accounting services consultants take care of matters related to client tax compliance such as calculating, paying, and reporting taxes.
2)Assistance in Examination.
Tax and accounting services consultants have the responsibility to represent or assist clients during tax audits. This is done because many clients do not understand their tax problems. Tax consultants also help prepare data/documents needed during the audit.
3)Tax Report Audit.
This is a service for evaluating data related to tax burdens that are detrimental to client companies.
Tax and accounting services consultants will perform tax planning services aimed at optimizing profits for clients.
Tax and accounting services consultants will offer consulting services on tax and financial issues, which can be paid or free depending on the commitment made
If the client needs a tax overpayment return (restitution), a tax consultant can help you from data preparation, submission of refunds, examinations to the final process of receiving the tax overpayment.
7)Tax dispute resolution.
A tax consultant has to provide tax dispute resolution services. For example, if the client plans to file tax objections, appeals, etc.
Benefits of Using Tax and Accounting Services Consultants
The following are the benefits taxpayers get when using Tax and Accounting consulting services, here is an overview :
- It is more efficient because the error rate is very small, so there is less risk of paying more.
- The company is not burdened with tax administrative matters when making the report and the reporting process because this has been handled directly by experts from the tax consultant.
- Companies are more comfortable when undergoing tax audits because they are accompanied by a consultant who understands audit procedures and anticipates the risk of loss due to errors in calculations.
- Can solve problems quickly and thoroughly so that it does not take up the mind and time of company leaders.
- Companies can focus more on business development.
- Company owners and management can carry out activities as usual without any burden because tax matters have been handled by competent people.
- Companies can do tax planning or tax planning.
Is it necessary to use a Tax Consultant Service?
After getting complete information about tax and accounting above, some of you must still be curious about whether it is important to use a tax consultant? Moreover, the cost of hiring a tax consultant is not cheap so that it can burden the company’s cash.
Actually, the decisions taken must consider the needs of taxpayers who use tax consulting services. Therefore, you must estimate your needs with financial means.
Check and check the human resources in the company first. It could be that you have enough human resources to take care of your tax obligations yourself.
We always provide solutions for you!
When your income increases dramatically, we highly recommend that you open a different PT PMA so that you don’t have to pay large sums of money just for your corporate taxes. To find out how to do that, contact our professional team from BINKA Consulting to discuss all the things you want to decide, we are here to help!
If you need further detailed information on tax and accounting services as well as the tax reporting process in Indonesia, do not hesitate to contact BINKA Consulting and we will provide all necessary information and assistance.
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