Formalize the Rules of the Income Tax on Natura, Check Out the Tax Object Exemption Categories

Jul 05, 2023 02:17:12 pm
Manhajul Islam, S. Ak - BATS Consulting

The Minister of Finance officially regulates the income tax treatment of reimbursement or remuneration in connection with work or services received or obtained in kind and/or enjoyment via PMK 66/2023.

Belied is claimed to be a tool of the government to avoid efforts to erode the tax base through in-kind or enjoyment schemes so that rearrangement is needed.

Through this technical guideline, the government stipulates the provision of in-kind or enjoyment that is subject to income tax and exempt from income tax.

"Reimbursement or remuneration in respect of work or services received or obtained in kind and/or enjoyment constitutes income that is subject to Income Tax ...", reads article 3 of PMK No.66/2023.

Reimbursement or compensation in connection with the work or services referred to in the article is subject to income tax if:

a.    Relating to the employment relationship between the employer and the Employee;

b.   Reimbursement or compensation due to service transactions between Taxpayers;

c.    Reimbursement or remuneration in the form of goods other than money transferred ownership to the giver to the recipient; or

d.   Reimbursement or remuneration in the form of rights to the utilization of a facility and/or service sourced from the assets of the reimbursement or remuneration or third parties hired and/or financed by the giver

In addition, there are 5 categories of in-kind giving that are exempt from tax collection. The five include food, groceries, beverage ingredients, and/or beverages for all employees.

Second, the nature and/or enjoyment provided in a particular area. Third, the nature and/or enjoyment that must be provided by the employer in the performance of work.

Fourth, in-kind and/or enjoyment sourced or financed by the state budget, regional revenue and expenditure budget, and/or village revenue and expenditure budget. Fifth, nature and/or enjoyment with certain types and/or limitations.

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