In the Era of Natura Taxation, There are Details of Certain Natura Limits Not Subject to Tax

Generally, employers can provide in-kind either in the form of facilities or goods to their employees. So what are the natura that does not have to be deducted income tax and what is the limit of natura that does not have to be deducted income tax by the employer?

Based on PMK 66/2023 which was just inaugurated this July, there are types of nature and enjoyment that are given certain restrictions to be excluded from the object of income tax as stated in the annex belied.

1.           Parcels

Employers who usually provide parcels in the form of foodstuffs, beverage ingredients, food and/or drinks in the context of religious holidays (Idul Fitri, Christmas, Nyepi, Vesak, and Chinese New Year) are not deducted income tax as long as they are received by all employees.

While the parcels given outside of that, the government sets a limit of value of no more than Rp 3 million for each employee per tax year. If it is more than that, then the employer must deduct income tax 21.

2.           Work Equipment

Work equipment facilities from employers, including computers, laptops, or cellular phones along with supporting facilities such as credit or internet connection are also excluded as long as they are received by employees to support the work concerned.

3.           Health Facilities

Health service facilities and treatment from employers received or obtained by employees are not subject to income tax if given in the context of handling:

1.        work accidents;

2.        occupational diseases;

3.        life-saving emergencies; or

4.        Follow-up care and treatment as a result of occupational accidents and/or occupational diseases.

4.           Sports Facilities

Sports facilities from employers other than golf, horse racing,  motorized boat racing, gliding, and/or automotive sports facilities received by employees are exempt from tax objects if in total the value is not more than IDR 1.5 million for each employee in a tax year.

5.           Residential Facilities

Residential facilities from employers that are communal, such as mes, dormitories, boards, or barracks for employees are exempt from withholding income tax. Meanwhile, for individual residences, income tax is not collected if the overall facilities are worth no more than Rp 2 million for each employee within a period of 1 month.

6.           Vehicle Facilities

Vehicle facilities from employers for employees can be excluded from income tax if the vehicle is received by non-shareholder employees and has an average gross income in the last 12 months up to Rp 100 million from the employer concerned.

7.           Pension Contribution Facility

The contribution facility for workers pension funds to pension funds whose establishment has been authorized by the Financial Services Authority borne by the employer has not changed from before. This facility is not subject to withholding income tax 21

8.           Worship Facilities

Worship facilities provided by employers to their employees, including in the form of prayer rooms, mosques, chapels or temples intended solely for worship activities, are exempt from withholding income tax 21 employees who use these facilities.

For information, this provision applies to natura from the 2023 tax year. Meanwhile, all in-kind and/or received or obtained by employees or service providers during 2022 are not included in the object of income tax on in-kind.