Understanding PPh 21 Final for SMEs in 2023

Are you looking for a one-stop destination to secure your health and financial well-being? Look no further than liveaman.com, where you’ll discover a wide range of insurance and health products designed to protect and empower you!

Introduction

In 2023-2024, there have been significant updates regarding PPh 21 Final for SMEs (Small and Medium Enterprises) in Indonesia. Understanding these changes is crucial for SMEs to comply with tax regulations efficiently. This comprehensive guide aims to provide SMEs with a detailed understanding of PPh 21 Final, including its application, calculation methods, payment procedures, and exemptions.

Object and Taxpayer Subject to PPh Final UMKM:

Article 3 of PMK 164/2023 delineates the parameters within which domestic taxpayers, deriving income from businesses with specific gross circulation or turnover, are subject to PPh Final within predefined periods. This regulation not only defines the scope of applicability but also provides clarity on the applicable rates and exemptions for various categories of income. Understanding these provisions is essential for SMEs to accurately assess their tax liabilities and ensure compliance with tax laws.

Moreover, the inclusion of various types of taxpayers, such as individuals and entities like cooperatives, limited liability companies, and village-owned enterprises, underscores the comprehensive nature of PPh Final regulations. This inclusive approach ensures that a wide array of businesses operating within Indonesia’s economic landscape are subject to equitable tax treatment.

Notification Process for Taxpayers Opting for PPh Final

The notification process outlined in PMK 164/2023 is designed to facilitate seamless compliance for SMEs opting for PPh Final. By submitting written notifications to the Director-General of Taxes through the Tax Service Office (KPP), SMEs can formalize their election to be subject to PPh Final. This proactive approach empowers SMEs to assert their tax preferences and streamline their tax management processes.

The availability of a standardized format for the notification letter, as provided in Lampiran A PMK 164/2023, simplifies the process for SMEs, ensuring consistency and accuracy in documentation. Additionally, the specified deadline for submission offers clarity and enables SMEs to plan their tax-related activities effectively, avoiding any potential penalties or repercussions due to non-compliance.

Calculation of PPh Final for SMEs

The calculation of PPh Final for SMEs hinges on the monthly turnover derived from business operations. By applying the prescribed tax rate of 0.5% to the annual turnover, SMEs can ascertain their tax liabilities accurately. This straightforward calculation method provides SMEs with a clear understanding of their tax obligations, enabling them to budget and allocate resources accordingly.

Furthermore, the provision exempting individuals with annual turnovers not exceeding Rp500 million from PPh obligations underscores the government’s commitment to supporting the growth and development of SMEs. This exemption serves as an incentive for SMEs to expand their operations within a conducive tax environment, fostering economic growth and prosperity.

Example Calculation of PPh 21 Final

Consider an SME with a monthly turnover of Rp100 million. To calculate PPh 21 Final for a year, we’ll multiply the monthly turnover by 12 to get the annual turnover:

Annual Turnover = Monthly Turnover × 12

= Rp100 million × 12

= Rp1.2 billion

Since the annual turnover (Rp1.2 billion) is less than Rp4.8 billion, the SME falls within the 0.5% tax rate bracket. Therefore, the calculation for PPh 21 Final would be:

PPh 21 Final = Annual Turnover × Tax Rate

= Rp1.2 billion × 0.5%

= Rp6 million

Thus, the SME would be liable to pay Rp6 million as PPh 21 Final for the year.

Payment Procedure and Deadline for PPh Final for SMEs

PPh Final must be paid by SME taxpayers either through self-settlement or withholding by tax collectors. This section outlines the payment procedure and the deadline, both for self-settlement and withholding scenarios, ensuring compliance with tax regulations.

Exemption from Withholding Tax with Statement Letters

SME taxpayers with turnovers not exceeding Rp500 million are exempted from withholding tax in transactions with tax collectors. The article explains the process of obtaining exemption through the submission of statement letters, including a sample format, and the obligation of tax collectors to issue nil withholding tax certificates.

Conclusion

Navigating the PPh 21 Final regulations for SMEs in 2023-2024 requires a clear understanding of the applicable rules and procedures. By adhering to these guidelines, SMEs can fulfill their tax obligations effectively while benefiting from relevant exemptions and provisions. Keeping abreast of any updates or changes in tax laws and consulting with tax professionals can further ensure compliance and optimize tax management for SMEs.

Also read: Salary Regulation in Indonesia: Minimum Wage, Taxes, and Raise

Aman is a company that offers various health protection products for employees. By having reliable employee insurance like Aman, the company can provide essential benefits to its employees. In the long run, this can improve employee satisfaction, productivity, and retention. When it comes to employee health benefits, Aman is the right choice to assist companies and employees in meeting their health protection needs, register now!

Kennard, 2024. “Kemenkeu Terbitkan PMK 164/2023, Ketahui Tata Cara Pengenaan PPh Final UMKM”. pajakku.com. Available at: Kemenkeu Terbitkan PMK 164/2023, Ketahui Tata Cara Pengenaan PPh Final UMKM (pajakku.com)