To ease the burden of your tax expense payable by the end of the year, if you are not a Taxpayer subject to Final Income Tax rate under the Government Regulation No. 23 of 2018 or a certain individual entrepreneur, you are required to make monthly installments of Article 25 Income Tax.
In general, the Article 25 Income Tax installments should be:
net income multiplied by the tax rate, then divided by twelve or the number of months in the section of the Tax Year
In the case of an Individual Taxpayer, Non-Taxable Income should first be deducted from the net income before multiplying it by the tax rate.
1. If an Individual Taxpayer maintains bookkeeping and from it, their monthly net income can be derived, the fiscal net income should be calculated based on the bookkeeping;
2. If an Individual Taxpayer only maintains recording using the Net Income Calculation Norms or maintains bookkeeping but from it, their monthly net income cannot be derived, the fiscal net income should be calculated based on the Net Income Calculation Norms for gross income.
3. In the case of a Corporate Taxpayer, the fiscal net income should be calculated by deducting deductible expenses from gross income.
The Article 25 Income Tax installments for a newly registered Individual Taxpayer, and a newly registered Corporate Taxpayer not formed through merger/liquidation/change of form of business entity of a previously existing Corporate Taxpayer, will be nil.
Article 25 Income Tax must be paid no later than the 15th (fifteenth) day of the month immediately following the end of the Tax Period. Any Taxpayer having paid Article 25 Income Tax and received validation with a State Revenue Transaction Number (NTPN) is deemed to have filed their Periodic Income Tax Return on the date of validation.
Example of Calculation of Article 25 Income Tax
Mr. Beni (TK/0) is registered as a Taxpayer with Tax Office (KPP) A on 1 February 2015. His annual fiscal net income in 2018 is Rp100,000,000. His monthly Article 25 Income Tax for 2019 is as follows:
Annual Net Income = Rp100,000,000
Non-Taxable Income (TK/0) = Rp54,000,000 (-)
Taxable Income = Rp46,000,000
Income Tax Payable = 5% x Rp46,000,000 = Rp2,300,000
His Article 25 Income Tax installment for 25 April 2019 is = 1/12 x Rp2,300,000 = Rp191,666.67.
PT. Mulia is registered as a Domestic Taxpayer with Tax Office C on 1 February 2015. Its annual gross income is over Rp50 billion. Its net income (taxable profit) can be calculated based on the bookkeeping of Rp120,000,000 annually. Its Article 25 Income Tax for February 2019 is as follows:
Net Income (taxable profit) for 2019 = Rp120,000,000
Income Tax Payable = 25% x Rp120,000,000 = Rp30,000,000
Its monthly Article 25 Income Tax installment for 2019 = 1/12 x Rp30,000,000 = Rp 2,500,000.