Definition of Tax Amnesty, Background, Objectives, Benefits, Regulations, Examples

Definition of Tax Amnesty, Background, Objectives, Benefits, Regulations and Examples – Tax Amnesty or tax amnesty. It is a government program for taxpayers to pay all taxes on their wealth.

Definition of Tax Amnesty, Background, Objectives, Benefits, Regulations and Examples

For more details about the tax amnesty, follow the following review on the meaning of the tax amnesty, background, purpose of the tax amnesty, benefits, regulations, advantages and examples.

Understanding Tax Amnesty

Tax Amnesty is an abolition of taxes that should be owed, not subject to tax administration sanctions and criminal sanctions in the field of finance taxation, through disclosing Assets and paying Redemption Debt as regulated in Law no. 11 of 2016 About Forgiveness Tax.

So the meaning of Tax Amnesty according to Law no. 11 of 2016 is an abolition of taxes that should be owed, not subject to sanctions tax administration and criminal sanctions in the field of taxation, by disclosing assets and paying the ransom as stipulated in the law this.

Tax Amnesty Background

Tax Amnesty in Indonesia is carried out due to several backgrounds or something that underlies it, namely:

• Tax Amnesty is enforced in Indonesia because of the large number of Indonesian state assets both inside and outside the country or abroad that have not or not all been reported in the Annual Tax Return Income.
• Tax Amnesty aims to increase state revenues and economic growth as well as to raise awareness and public compliance in carrying out the obligation to pay taxes, therefore issuing a Forgiveness policy Tax.
• The case of the Panama Papers, which is a document that lists the number of entrepreneurs who have assets abroad, especially in tax-free countries such as Panama.

Purpose of Tax Amnesty

Tax Amnesty has objectives in its implementation, namely:

• So that the number of taxpayers increases and is aware of the importance of paying taxes
• In order to increase tax revenue in the short term
• In order to integrate an informal sector into the economy
• So that unused funds can be used
• A first step in the new regime's policy of imposing greater sanctions

Tax Amnesty Benefits

There are several benefits of this tax amnesty or tax amnesty for several parties, let's see.

Benefits of Tax Amnesty for the Government

With the implementation of a tax amnesty or tax amnesty, it will increase the government's income in the tax sector, this is very effective in reducing the decreasing state revenue. Tax Amnesty will automatically withdraw funds from abroad to Indonesia and become a new tax source.

Tax Amnesty Benefits for Developers

The property sector will grow with the enactment of this tax amnesty, because this policy is related to taxes which are an indicator of the revival of a property business in Indonesia.

Tax Amnesty Benefits for Investors

With the implementation of this tax amnesty or tax amnesty, not only the government and developers are happy, investors are also bolder in making purchases of property. Investors are not afraid to invest their money in Indonesia.

Tax Amnesty Benefits for Taxpayers

The benefits of tax amnesty for Taxpayers are as follows:

• Erase the tax payable for which the probate decision has not been issued, is not subject to tax administration sanctions, and is not subject to criminal sanctions in the field of taxation, for a tax obligations in the tax period, part of the Fiscal Year, and Fiscal Year, until the end of the Last Fiscal Year relating to the tax obligations of PPh and VAT or PPnBM.
• Elimination of a tax administration sanction in the form of interest or fines.
• There is no tax audit, preliminary evidence examination, and an investigation into criminal offenses in the taxation sector.
• Termination of a tax audit, examination of preliminary evidence and investigation of Criminal Acts in the Taxation Sector.

Tax Amnesty Regulations

The following are the regulations of the tax amnesty.

Tax Amensty. Subject and Object

Article 1 of the Regulation of the Directorate General of Taxes Number PER-11/PJ/2016 explains what the subject and object of the tax amnesty are, as follows:

• Taxpayers who have an obligation to submit an Annual Income Tax Return are entitled to a Tax Amnesty
• Individuals such as farmers, fishermen, retirees, Indonesian workers or subjects of undivided inheritance tax, which amount his income is in the last tax year under non-taxable income, he can not use his right to participate in a pardon Tax.
• Indonesian citizen who does not reside in Indonesia for more than 183 (one hundred and eighty three) days within a period of 12 month and has no income from Indonesia is a Foreign Tax Subject and may not exercise his right to participate in the Forgiveness Tax
• In the event that the Taxpayer as referred to in paragraphs (2) and (3) does not exercise his right to participate in the Tax Amnesty, the provisions as referred to in Article 18 paragraph (2) of Law Number 11 of 2016 concerning Tax Amnesty do not applied.

Additional Treasure

Article 2 of the Director General of Taxes Regulation Number PER-11/PJ/2016 explains what is meant by additional assets, as follows:

• Included in the definition of Additional Assets as contained in Article 6 of Law Number 11 concerning Tax Amnesty are:
• Inheritance; and/or
• Grants received by blood relatives in a straight line of one degree that have not or have not been reported in the Annual Income Tax Return.
• Inheritance assets as referred to in paragraph (1) letter a are not objects of Tax Amnesty if:
• Received by heirs who do not have income or have income under Non-Taxable Income; or inheritance has been reported in the testator's Annual Income Tax Return.
• The donated assets as referred to in paragraph (1) letter b are not objects of Tax Amnesty if:
• Received by an individual grantee who has no income or has income below the Non-Taxable Income; or the assets of the grant have been reported in the Annual Income Tax Return of the grantor.
• In the event that the heirs as referred to in paragraph (2) and the recipient of the grant as referred to in paragraph (3) do not exercise their rights to convey the inheritance and/or property grants in the Declaration Letter in the context of Tax Amnesty, the provisions as referred to in Article 18 of Law Number 11 of 2016 concerning Tax Amnesty do not applied.

Submission or Correction of Annual Income Tax Return S

Article 3 of the Director General of Taxes Regulation Number PER-11/PJ/2016 explains how the soul of the taxpayer does not participate in the tax amnesty. This is an answer to public concerns about Tax Amnesty. So, if you do not follow Tax Amnesty, then:

• For taxpayers who do not abuse their rights to participate in a tax amnesty, they can submit a tax amnesty Annual Income Tax Return or correcting the Annual Tax Return Income.
• For Assets obtained from income that has been subject to Income Tax or Assets obtained from income that are not income tax object and has not been reported in an Annual Income Tax Return, the following provisions apply: following:
• In the event that the Annual Income Tax Return has been submitted, the Taxpayer shall make corrections to the Annual Income Tax Return; or in the event that the Annual Income Tax Return has not been submitted, the Taxpayer may report the Assets in the Annual Income Tax Return.
• In the event that the Taxpayer does not use his right to participate in a Tax Amnesty and the Director General of Taxes finds data and/or information on the Assets obtained from January 1, 1985 to December 31, 2015 which has not been reported in the Annual Income Tax Return as referred to in referred to in paragraph (2), the provisions as referred to in Article 18 paragraph (2) of Law Number 11 of 2016 concerning a Tax Amnesty applied.

Fair Value of Assets

Article 4 Regulation of the Director General of Taxes Number PER-11/PJ/2016 which explains how to determine the Fair Value of Assets to be used. Then the Fair Value of the Assets is as follows:

• The Fair Value of Additional Assets is a value that describes a condition and condition of similar or equivalent assets based on the assessment of the Taxpayer.
• The Fair Value for Additional Assets as referred to in paragraph (1) other than cash or cash equivalents is the value describes a condition and condition of similar or equivalent assets based on the assessment of the Taxpayer at the end of the Year Last Tax.
• The Fair Value reported by the Taxpayer in an Asset Declaration Letter is not tested or corrected by the Director General of Taxes.

Example of Tax Amnesty

Mr. Subagio is an Indonesian businessman. Mr. Subagio has been living in his condo in Singapore for the last 3 years. Mr. Subagio intends to leave Indonesia for good and is still an Indonesian citizen. Mr. Subagio runs his business in Indonesia, Australia, Japan and South Africa. Congratulations, Mr. Subagio did not report an obligation to submit the Annual Income Tax Return, then Mr. Subagio has the right to participate in the Tax Amnesty program.
The solution is:

• Mr. Subagio is a party who has the right to participate in a Tax Amnesty
• In the event that Mr. Subagio does not exercise his right to participate in a Tax Amnesty program, Mr. Subagio needs to submit an SPT The latest annual income tax and previous years by paying the tax payable and the sanctions in accordance with the provisions in the field of taxation.

Thus it has been explained about Definition of Tax Amnesty, Background, Objectives, Benefits, Regulations and Examples, hopefully it can add to your insight and knowledge in the field of taxation, especially tax amnesty. Thank you for visiting