Introduction

Individual companies, often referred to as individual PTs, are solo-run business entities falling under the category of Micro and Small Enterprises as per Law no. 11 of 2020 Concerning Job Creation.

Understanding Taxation

Taxation is the mandatory contribution to the state, obligatory for individuals or entities as per legal mandates. This contribution, devoid of direct reciprocation, is channeled towards the state's necessities, fostering the welfare of its populace. Tax payment embodies both civic duty and participation, crucial for state funding and national advancement.

Tax Rates for Individual PTs

Individual PTs can benefit from the Final Income Tax rate, currently set at 0.5%, delineated in Government Regulation Number 55 of 2022. This rate is applicable to gross monthly income not exceeding IDR 4.8 billion within a tax year. Should turnover remain under this threshold, the 0.5% rate persists until the end of the tax year, lasting a maximum of four years.

Tax Obligations

Tax responsibilities for individual PTs encompass various actions:

1. Deduction of VAT and PPnBM from transactions.

2. Depositing VAT and PPnBM.

3. Filing periodic VAT SPT reports.

4. Compiling tax invoices.

Consequences of Non-compliance

Failure to submit financial reports by individual PTs invites penalties such as written warnings, service access termination, or even legal entity status revocation.

Example Tax Calculation

For instance, consider PT ACES established in January 2021, with a turnover of IDR 960,000,000 for the year. Calculating the corporate income tax payable:

0.5% x IDR 960,000,000 = IDR 4,800.00

Final PPh is remitted per tax period based on the business circulation records.