Timesofummah.com – Every Indonesian citizen is required to pay taxes, be it vehicle taxes, residence taxes, income taxes, and others. However, do you know the meaning of the tax itself?
A. Understanding Tax
Taxes in the Big Indonesian Dictionary (KBBI) have the meaning of mandatory levies, usually in the form of money that must be paid by residents as mandatory contributions to the state or government in relation to income, ownership, purchase price of goods, and so on.
In simple terms, tax payments can be interpreted as an obligation that must be carried out by citizens in an effort to finance the state and national development. All tax payment procedures must comply with existing laws and regulations.
Usually the type of tax that is often known by many people is the motor vehicle tax. Have you ever heard of income tax and land and building tax? The two taxes need to be known by many people, both in terms of understanding and how to calculate them. By knowing the two types of taxes, we will try to pay taxes on time.
If you want to know about income taxes and land and building taxes, let’s look at the two taxes, from understanding to formulas and how to calculate them.
B. Definition of PPh and PBB
1. Income Tax (PPh)
Income Tax is a tax imposed on individuals or entities on income earned during one tax year. In this case, income is an economic ability that can be used to meet daily needs or increase wealth for both domestic and foreign. In simple terms, income can be interpreted as profit from a business, honorarium, salary, gifts, and so on.
2. Land and Building Tax (PBB)
If we have a plot of land or have a place to live, the land and residence will be taxed. The tax imposed on land ownership or residence is called Land and Building Tax or commonly abbreviated as PBB.
Initially this tax was a central tax, but since Law No. 28 of 2009 concerning Regional Taxes and Levies (PDRD) appeared, rural and urban PBB became a regional tax. However, PBB on plantations, forestry, mining, is still part of the central tax.
C. Subject of Income Tax and Land and Building Tax
“Tax Subject” is a term in the taxation law which is indicated for an individual (personal) or an organization (group) based on the applicable tax law. The thing that needs to be underlined in the “tax subject” is that a person or entity is a “tax subject” but not all people and entities are taxed.
In other words, “subject tax” will only be imposed on individuals who have met the taxpayer requirements. Meanwhile, the entities subject to taxpayers are Limited Liability Companies (PT), Limited Liability Companies, State or Regional Owned Enterprises with any name and in any form, partnerships, corporations or other associations, firms, joint ventures, cooperative associations, and permanent establishments.
Basically, tax payments must be made if there is income earned in Indonesia. Thus, if a person or entity no longer earns income or income in Indonesia, there is no need to pay taxes.
The conditions that are not subject to taxpayers are as follows.
- When died;
- When choosing to leave Indonesia for good;
- When the legal entity is liquidated, the legal entity is no longer subject to taxation.
1. Subject of Income Tax (PPh)
Based on the Income Tax Law, it is not clear what is meant as an income tax subject, but in general the income tax subject is divided into three groups, namely:
- Individuals and inheritance that have not been divided into a single unit replace those who are entitled;
- Entities consisting of Limited Liability Companies (PT), Limited Liability Companies, State or Regional Owned Enterprises with any name and in any form, partnerships, companies or other associations, firms, joint ventures, cooperative associations, and other business entities;
- Permanent establishment (BUT) is a business carried out by a person who does not reside in Indonesia or is in Indonesia for not more than 183 days within a period of 12 months or an entity that is not established and is not domiciled in Indonesia. The bodies referred to are management positions, company branches, representative offices, workshops, office buildings, and workshops.
- Domestic tax subjects will be taxed on income derived from Indonesia, meanwhile, foreign tax subjects will be taxed based on income originating from Indonesia.
Domestic tax subjects will be taxed based on net income or net income at a general rate, while foreign tax subjects are taxed based on gross income or gross income at a comparable tax rate.
Domestic tax subjects are required to notify the Annual Tax Return (Annual SPT) as a medium for calculating the tax payable, while foreign tax subjects are not required to notify the Annual Tax Return because their tax obligations have been fulfilled through final withholding taxes.
2. Subject of Land and Building Tax (PBB)
Persons or entities that are required to pay Land and Building Tax (PBB) in accordance with the provisions of the PBB Law can be referred to as PBB subjects. PBB tax is imposed on subjects who already own buildings or benefit from land (land). Based on the Agrarian Law, the rights to land and buildings in the PBB are property rights, building use rights, cultivation rights, use rights, and management rights.
However, in some cases the building or land used is not clearly known who the owner is and the PBB has not been paid, the Director General of Taxes has the authority to determine and determine who the tax subject will be responsible for paying off the tax debt.
What is done when the Director General of Taxes determines the tax subject is conducting field research, which is followed by determining the tax subject on a building or land whose owner is not yet known.
The selection of PBB subjects to pay taxes or pay off tax debts even though they do not have rights to the buildings or land used, has been stated in Law Number 12 of 1994.
However, if the subject who has been determined by the Director General of Taxes has an objection, the tax subject can file an objection by writing a statement which states that the subject of PBB is not a person or entity that has to pay the said PBB.
The thing that needs to be underlined when making PBB payments is that the status of ownership rights over land and buildings has nothing to do with the PBB payment process. This is because the appointment of a person or entity by the Director General of Taxes is not proof of ownership of land and buildings.
D. Objects of Income Tax and Land and Building Tax
1. Object of Income Tax (PPh)
Income or income earned from work is an object of tax. Income or income has a very broad meaning, so Law No. 36 of 2008 was enacted in which the object of income tax is contained in articles 21, 22, 23, and 26.
However, there are certain types of income that are not part of the income tax object. The following types of income are not part of the income tax object.
- Other income as contained in the Income Tax Act.
- Assistance or donations such as zakat and religious donations.
- Grant funds as long as they are not related to ownership, work, or control between related parties.
- Replacement or remuneration related to work or services in the form of enjoyment from the Taxpayer or the Government, if provided by a non-Taxpayer or certain Taxpayer will become Income).
2. Land and Building Tax Object (PBB)
The objects of the Land and Building Tax are immovable objects. In simple terms, the earth’s surface which includes land, deep waters, and the sea. Meanwhile, a building is a construction that is built on land/water with a technique that is planted or patented. The building categories are as follows:
- Toll road;
- Swimming pool;
- Environmental roads that become one unit with the building complex;
- Luxurious fence;
- Sports venues;
- Luxurious gardens;
- Oil, water and gas refineries;
- Other facilities that provide benefits.
- The following are not included in the object of the PBB:
- Land or buildings intended for public purposes, such as worship, health, education, culture, social, and others.
- Land or buildings used for public burials of ancient relics, museums, and so on.
- Land or buildings used by diplomatic representatives or consulates. This is done so that RI’s representative buildings abroad are also not subject to PBB fees.
- Land that is part of protected forests, nature reserves, national parks, and so on.
- Land and buildings used by representatives of international organizations as determined by the Minister of Finance.
E. Formulas and Methods of Calculating Income Tax
In calculating income tax, it is necessary to carry out several stages. To make it easier to understand each stage, an example case will be given.
1. Calculating net income
All income earned during one year of work is gross income. Therefore, to calculate the income tax required net income for one year.
Net income can be calculated by reducing the gross income (gross) dependents such as credit, insurance, debt, and others. Example: 80,000,000 (gross) – 5,000,000 (depends) = 75,000,000, so the net income for one year is 75,000,000.
2. Calculating Non-Taxable Income (PTKP)
If you have earned net income for one year, the next step is to calculate Non-Taxable Income (PTKP). The purpose of calculating PTKP is to find Taxable Income (PKP).
PTKP already has a rate that has been set by the Directorate General of Taxes. The PTKP rates that need to be known are as follows:
IDR 54,000,000 for individual taxpayers.
IDR 4,500,000 additional for married taxpayers.
IDR 54,000,000 for the wife whose income is combined with the husband’s income.
An additional IDR 4,500,000 for each blood family member in a straight line as well as adopted children who are fully dependent, a maximum of 3 people for each family.
3. Calculating Taxable Income (PKP)
After getting the results of the PTKP calculation, the next step is to calculate the Taxable Income (PKP). To find out the amount of PKP, a reduction is made between net income and PTKP.
Example: 75,000,000 – 54,000,000 (not yet married) = 19,000,000, then the PKP obtained is 19,000,000.
4. Calculating Income Tax (PPh)
If you have obtained a PKP, the next step is to calculate income tax. To calculate income tax, it is necessary to know the amount (percent) that has been determined by the Directorate General of Taxes. The following is the calculation of the amount of income tax that must be paid for one year.
Taxable Income up to IDR 50,000,000.00 (fifty million rupiahs) is subject to a rate of 5% (five percent)
Taxable Income of more than Rp. 50,000,000.00 (fifty million rupiah) up to Rp. 250,000,000.00 (two hundred and fifty million rupiah) is subject to a rate of 15% (fifteen percent)
Taxable Income of more than Rp. 250,000,000.00 (two hundred and fifty million rupiah) up to Rp. 500,000,000.00 (five hundred million rupiah) is subject to a rate of 25% (twenty five percent)
Taxable Income of more than IDR 500,000,000.00 (five hundred million rupiah) is subject to a rate of 30% (thirty percent).
Example: 19,000,000 x 5% (under 50,000,000) = 950,000, so the income tax to be paid for one year is 950,000.
5. Examples of cases of calculating Income Tax
Bagus is a father who already has one wife and one child. He earns 96,000,000 per month and has a dependent load of 4,000,000 per month. Here’s how to find income tax.
a) Net income = (gross income – dependents)
= 96,000,000 – 4,000,000
b) PTKP (1 wife and 1 child)
54,000,000 + 4,500,000 + 4,500,000
c) PKP (net income – PTKP)
92,000,000 – 63,000,000
d) PPh (PKP x Percentage of PPh)
29,000,000 x 5%
Then the income tax that must be paid by Bagus is 1,450,000.
F. Formulas and Methods of Calculating PBB
Basically calculating the Land and Building Tax (PBB) is easy and difficult. As for how to calculate PBB, it requires the Selling Value of the Tax Object (NJOP). NJOP can be said as a reference or reference to find out the market price or average price when you want to sell or buy land or buildings.
Actually there are many aspects that affect the earth’s NJOP, such as geographical location, environmental conditions, benefits, and others. while the NJOP on the building is determined or influenced by the materials used in the building, location, environmental conditions, and others.
Things that need to be considered when calculating the amount of land and building tax that must be paid, namely the Value of the Tax Object (NJOP), the Sale Value of the Non-Taxable Object (NJOTKP), and the Taxable Selling Value (NJKP).
NJKP is needed to calculate PBB. NJKP can be obtained from 20% times NJOP. After getting the NJKP, the next step is to use the formula commonly used to calculate PBB is NJKP multiplied by 0.5%.
G. Case Example Calculating Land and Building Tax
Pak Bagyo wants to pay PBB and he has a building of 100 square meters and a land area of 150 square meters. The price of land in Pak Bagyo’s area is around 4,000,000 per meter, while the price for buildings is around 5,000,000. Here’s how to calculate PBB.
150 x 4,000,000 = 600,000,000
100 x 5,000,000 = 500,000,000
After getting the total value of land and buildings, then look for NJOP
600,000,000 + 500,000,000 = 1,100,000,000
20% x 1,100,000,000 = 220,000,000
0.5% x 220,000,000 = 1,100,000
Then the PBB that must be paid by Mr. Bagyo is 1,100,000
Tax is state revenue that is used to build the state and finance the state. Therefore, as a good citizen, it is proper to pay taxes on time.
Income Tax and Land and Building Tax are two types of taxes that exist in Indonesia. The two taxes have a different calculation method, either from the formula or from the percentage of tax that must be paid. Not only are the ways of calculating them different, the two taxes also have differences in terms of the “subject” of the tax and the “object of the tax.”
To find out more about Income Tax and Land and Building Tax, you can read these two book recommendations. By reading these two books, we will not be confused in calculating Income Tax and Land and Building Tax and increase the desire to pay taxes on time.