From the point of view of taxation, family is considered as a single economic unit, meaning that the incomes or losses of all family members, including married women, are consolidated into a single unit for tax purposes and the tax obligations are performed by the head of the family.
If desired, the husband and the wife’s net incomes can be taxed separately under a written agreement based on:
- An asset separation agreement (PH); or
- The wife’s intention to choose to perform her tax rights and obligations separately (MT);
with tax calculated based on the sum of their consolidated net incomes and each liable for tax in proportion to their respective net income.
If you, as an Individual Taxpayer including a married woman not conducting business or independent personal service and earning income above Non-Taxable Income or a married woman conducting business or independent personal service, have your tax administered separately because you:
- Live in separation under a court judgment;
- Have a written agreement for asset separation; or
- Choose to perform your tax rights and obligations separately from your husband despite the absence of a court judgment or an asset separation agreement;
you are required to apply for your own Taxpayer Identification Number (TIN).
Married woman with asset separation or choosing to perform tax obligations separately
|
Description |
Performing tax rights and obligations together with husband |
Choosing to perform tax rights and obligations separately from husband |
|
Performance of rights and obligations |
Using the husband’s TIN |
Using the wife’s own TIN |
|
Existing TIN |
Required to apply for TIN revocation |
Required to submit a Statement Letter of Intention to Perform Tax Obligations Separately |
|
Income received or earned
|
Considered as the husband’s income or loss, unless: Such income is received or earned from one employer only with withholding Article 21 Income Tax and the work is not related to the business or independent personal service of the husband or other family members |
Based on the consolidated wife and husband’s net income, the Income Tax Payable is in proportion to their respective net income |
|
Married woman’s income earned from one employer only |
If Article 21 Income Tax has been withheld from it and the work is not related to the business or independent personal service of the husband or other family members, the withholding Article 21 Income Tax is final |
Article 21 Income Tax from the employer as a tax credit |
|
Income Tax withholding agent or collector |
Required to show the husband or head of the family’s TIN to the Income Tax withholding agent or collector |
Required to show the wife’s own TIN to the Income Tax withholding agent or collector |
|
Calculation of Income Tax |
Pursuant to article 8 paragraph 1 of the Income Tax Laws |
Pursuant to article 8 paragraph 3 of the Income Tax Laws |
|
Obligation to file Annual Tax Return |
Performed by the husband |
Performed by the married woman herself |
|
Other rights and obligations |
Performed by the husband |
Performed by the married woman herself |
Example of Calculation for Asset Separation or Choosing to Perform Tax Obligations Separately
Wife’s Income from One Employer
The husband’s net income is Rp150,000,000.
The wife’s net income from one employer is Rp100,000,000.
| Husband | Wife |
Net income | 150,000,000 | 100,000,000 |
Consolidated net income (husband and wife) | 250,000,000 | |
Non-Taxable Income (KI/3) |
| |
Taxpayer himself | 54,000,000 | |
Additional for a married Taxpayer | 4,500,000 | |
Additional for a wife | 54,000,000 | |
Additional for family members | 13,500,000 | |
| 126,000,000 | |
Taxable Income | 124,000,000 | |
Total Income Tax Payable | 13,600,000 | |
| (150,000,000 : 250,000,000) x 13,600,000 | (100,000,000 : 250,000,000) x 13,600,000 |
Income Tax Payable | 8,160,000 | 5,440,000 |
Wife’s Income from Conducting Business and Subject to Final Income Tax under Government Regulation No. 23 of 2018
The husband’s net income is Rp150,000,000.
The wife, who conducts business and falls into the category of Taxpayer with a certain gross income under the Government Regulation No. 23 of 2018, has a gross income of Rp100,000,000 for the January to December period.
| Husband | Wife |
Gross income |
| 100,000,000 |
Net income | 150,000,000 |
|
Consolidated net income (husband and wife) | 150,000,000 | |
Non-Taxable Income (K/3) |
| |
Taxpayer himself | 54,000,000 | |
Additional for a married Taxpayer | 4,500,000 | |
Additional for family members | 13,500,000 | |
| 72,000,000 | |
|
| |
Taxable Income | 78,000,000 | |
Total Income Tax Payable 5% x 50,000,000 = 2,500,000 15% x 28,000,000 = 4,200,000 | 6,700,000 | |
Income Tax Payable | 6,700,000 | - |
Income Tax Payable under Government Regulation 23/2018 = 100,000,000 x 0.5% | - | 500,000 |
Wife’s Income from Conducting Business and Subject to General Rate
The husband’s net income is Rp150,000,000.
The wife, who conducts business or independent personal service and does not meet the criteria of Taxpayer with a certain gross income subject to Income Tax under the Government Regulation No. 23 of 2018, has a net income of Rp100,000,000.
| Husband | Wife |
Net income | 150,000,000 | 100,000,000 |
Consolidated net income (husband and wife) | 250,000,000 | |
Non-Taxable Income (KI/3) |
| |
Taxpayer himself | 54,000,000 | |
Additional for a married Taxpayer | 4,500,000 | |
Additional for a wife | 54,000,000 | |
Additional for family members | 13,500,000 | |
| 126,000,000 | |
Taxable Income | 124,000,000 | |
Total Income Tax Payable | 13,600,000 | |
| (150,000,000 : 250,000,000) x 13,600,000 | (100,000,000 : 250,000,000) x 13,600,000 |
Income Tax Payable | 8,160,000 | 5,440,000 |
Woman Living in Separation
Living in separation means that the husband and the wife live separately under a court judgment.
The tax provisions specify that:
1. Registration
A wife who has lived in separation, within one month of the divorce having legal certainty, must have her own TIN.
2. Calculation
The Non-Taxable Income status for both the husband and the wife becomes Unmarried (TK) and can be added with the actual and allowed number of dependents.
3. Reporting
For the year when the divorce is final, the income reported on the Annual Tax Return should be the part of income post the divorce. Meanwhile, the part of income pre the divorce should still be reported on the husband’s Annual Tax Return.
For the immediately following year, the wife should report her entire income on her own Annual Tax Return.
Example of Calculation for Woman Living in Separation
The husband has a business as a lawyer and the wife has a salon business in Jakarta. They are divorced under the court judgment dated 31 May 2017. They have 2 children, and based on the court judgment, they each have 1 child in their custody.
It is known that the husband and the wife’s incomes are as follows:
Husband (one Tax Year) in the amount of Rp1 billion;
Wife:
• 1/1/2017 – 31/5/2017 in the amount of Rp300,000,000;
• 1/6/2017 – 31/12/2017 in the amount of 500,000,000.
Calculation of husband’s tax
Husband’s gross income (Net Income Calculation Norms for a lawyer in Jakarta = 50%) | Rp1,000,000,000 |
|
Husband’s net income from independent personal service (50% x Rp1,000,000,000) |
| Rp500,000,000 |
Wife’s gross income up to 31 May 2017 (Net Income Calculation Norms for a salon in Jakarta = 50%) | Rp300,000,000 |
|
Wife’s net income (50% x 300,000,000) |
| Rp150,000,000 (+) |
Total net income |
| Rp650,000,000 |
Non-Taxable Income (K/2) |
| Rp121,500,000(-) |
Taxable Income |
| Rp378,500,000 |
Income Tax Payable |
|
|
5% x 50,000,000 |
| Rp2,500,000 |
15% x 200,000,000 |
| Rp30,000,000 |
25% x 128,500,000 |
| Rp32,125,000 |
Income Tax Underpayment/Overpayment |
| Rp64,625,000 |
After the divorce, the wife applies for a TIN on 5 June 2017. This is in accordance with the provisions that a divorced wife is required to apply for her own TIN no later than one month following the date of the court judgment. As the wife already has her own TIN in June 2017, she has an obligation to file an Annual Tax Return using the following calculation:
Calculation of wife’s tax
Wife’s net income as of 1 June 2017 (50% x 500,000,000) | Rp250,000,000 |
Non-Taxable Income (TK/1) | Rp58,500,000 (-) |
Taxable Income | Rp191,500,000 |
Income Tax Payable |
|
5% x 50,000,000 | Rp2,500,000 |
15% x 141,500,000 | Rp21,225,000 (-) |
Income Tax Underpayment/Overpayment | Rp23,725,000 |