Published PMK, Natura and Enjoyment of Employees Must be Measured and Withheld with Income Tax

The employer or the giver of enjoyment in the form of in-kind or pleasure is obliged to deduct income tax on the kind and benefits given to employees.

The income tax deduction scheme for employees in kind or benefits is carried out with the PPh 21 deduction mechanism which must be carried out starting July 1, 2023.

Income tax withholding by employers or reimbursement providers or rewards in kind and/or benefits by employers will be made at the end of the month in which the transfer or transfer of rights to a facility/enjoyment occurs.

While the range from January to June 2023, exempted from the obligation to withhold PPh 21 because the PPh tax obligations are determined using a self-assessment scheme.

"Replacement or compensation in connection with work or services in kind and/or enjoyment received or obtained from January 1, 2023 to June 30, 2023 ... for the Income Tax payable must be calculated and paid for himself and reported by the recipient in a Tax Return Income,” reads Article 24 PMK 66/2023 quoted on Thursday (06/07).

This policy regarding income tax on in-kind/enjoyment is based on the taxable-deductible concept, which means that if the object is taxed at the employee level, then the object can be charged at the employer level.

Provisions regarding reimbursement costs or compensation given in kind/favors as a deduction from gross income are effective from 1 January 2022 or the 2022 financial year of the employer begins.

Simultaneously with the entry into force of this provision, PMK 167/PMK.03/2018 concerning the Provision of Food and Beverages for All Employees and Reimbursement or Rewards in the Form of Kinds and Benefits in Certain Areas and Related to the Implementation of Work which can be deducted from the Employers Gross Income is revoked and declared invalid.