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

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.