FINANCE

Corporate Income Tax (PPh): Types and How to Calculate

The types and methods of calculating Corporate Income Tax or PPH are as follows, which will be reviewed by the Mekari Journal Blog.

When you own a company or business entity, you certainly have an expectation that the company you have will get big profits and profits.

If a company has a promising income, they are required to pay a certain amount of Corporate Income Tax to the government online using an online tax application or offline.

It is also an obligation of every citizen.

Therefore, for those of you who own a business, you must know what is meant by corporate income tax and its types and methods of calculation.

Definition of Corporate Income Tax

Corporate income tax or commonly referred to as PPhB is a state tax imposed on every additional capability received by a taxpayer from a business entity, both from within and outside the country.

This PhD will be imposed on the income of individuals and business entities that they receive for one tax year.

However, apart from individuals, taxes are also imposed on companies for the management of goods and services that are their business.

Subject and Object of Corporate Income Tax (PPh)

Subjects and objects that are included in corporate income tax have been regulated in the provisions of the legislation which will be explained as follows:

Corporate Income Tax (PPh) Subject

Is every business entity that is given the obligation to make tax payments to be deposited into the state treasury, be it for a monthly or annual period.

What types of business entities are subject to tax?

  • Limited Liability Company (PT)
  • Other Companies
  • State-Owned Enterprises (BUMN)
  • Regional Owned Enterprises (BUMD)
  • Village Owned Enterprises (BUMDes)
  • Business
  • Share
  • Cooperative
  • dll.

However, not all parties who are excluded or do not have to pay corporate income tax, such as:

  • Representative bodies of foreign countries.
  • An international organization was established by the Minister of Finance provided that Indonesia becomes part of the organization.
  • Not carrying out an activity where to earn income from Indonesia, other than providing loans to the government whose funds are obtained from the contributions of its members.
  • Certain units of government agencies that meet the criteria
    • Its formation is in accordance with the rules imposed by law.
    • Funding is sourced from the APBN or APBD.
    • The revenue is included in the central or regional government budget.

The object of Corporate Income Tax (PPh)

Included in the object of corporate income tax is the income received by the business material.

The main object that becomes the target of corporate income tax is the income from the company. Any additional economic capacity will be subject to corporate income tax.

However, there are also types of income that are subject to corporate income tax even though they do not come from the corporate income itself, namely:

  1. Help or Donations from the Company. It also includes zakat and other forms of religious donations whose provisions have been regulated based on existing government regulations.
  2. Corporate Grants. Grants provided by the company are also included in the object of corporate income tax. Grant assets whose provisions have been regulated by the government must comply with corporate income tax regulations.
  3. Inheritance. Inheritance is also one of the objects of corporate income tax based on government regulations that have been set.
  4. Reimbursement or Compensation. What is meant by compensation or compensation here is related to work. Either in kind or in the form of enjoyment used by the taxpayer.
  5. Cash deposit. Assets in the form of cash deposits received by the company and used as a substitute for capital or as a substitute for shares are also subject to corporate income tax based on government regulations.
  6. Other Income. Other income is also stated in the income tax law.

Various Types of Corporate Income Tax (PPh) in accordance with the applicable Articles

There are several types of income taxes that must be paid and reported by companies or corporate taxpayers, namely:

  • Income Tax Article 21, regulates withholding from the results of work, services, or activities with the name and in any form received or obtained by the Taxpayer and must be paid every month.
  • Income Tax Article 22 regulates the collection of taxes from taxpayers that are charged to certain business entities for carrying out trading activities related to exports, imports, and re-imports.
  • Income Tax Article 23, regulates withholding taxes made by tax collectors from taxpayers when there is a transaction that refers to a dividend transaction or profit-sharing in shares, royalties, interest, gifts and awards, rent, and other income related to the use of assets other than land. and transfer of buildings or services.
  • Income Tax Article 25 regulates tax installments originating from the amount of income tax payable according to the SPT PPh minus the income tax that has been collected and the income tax paid or payable abroad and may be credited.
  • Income Tax Article 26 regulates the tax imposed on income originating from Indonesia and received by foreign taxpayers other than a permanent establishment (BUT) in Indonesia.
  • Income Tax Article 29 stipulates that the amount of tax payable by a company in a tax year is greater than the number of tax credits that have been deducted by other parties and have been deposited.
  • Income Tax Article 15, regulates tax reports related to the Special Calculation Norms for certain groups of Taxpayers, including Corporate Taxpayers engaged in International shipping or aviation sector Overseas insurance companies, Oil, gas, and geothermal drilling
  • Income Tax Article 4 Paragraph (2) relates to taxes collected from income withheld from interest on deposits, bonds, deposits, etc.

Here’s a more complete explanation:

Article 15

This tax is a tax report related to specific calculation norms for certain groups of taxpayers.

Where when you have a business entity, you become a corporate income taxpayer who works as an entrepreneur.

Because there are a number of taxes that need to be paid.

This type of tax must also be paid in accordance with what is stated on the SKT (Registered Certificate).

Taxpayers who are subject to Article 15 of Corporate Income Tax are as follows:

  • International shipping or airline companies.
  • Domestic shipping and aviation companies.
  • Overseas insurance company.
  • Oil and gas drilling company.
  • Foreign trading company.
  • Investor company in the form of BOT (Build, Operate, Transfer).

Article 21

This income tax is a tax on income in the form of salaries, wages, honoraria, allowances, and other payments in any name and form.

This is in accordance with corporate income tax related to work or position, services, and activities received by domestic taxpayers or employees who are paid monthly.

A company manages its tax collection by directly deducting employee income and depositing it into the state treasury through a bank.

This means that workers no longer have to pay this type of tax themselves.

Article 22

Article 22 income tax is a tax collection from taxpayers who carry out import activities from buyers on the sale of luxury goods.

These collectors include:

  • Treasurer of the central or regional government, government agency or institution, and other state institutions, with regard to payment for the delivery of goods.
  • Certain agencies, both government and private entities are concerned with activities in the import sector.
  • Corporate taxpayers collect buyer taxes on the sale of luxury goods.

Article 23

Article 23 of this corporate income tax is a tax withheld by the tax collector from the taxpayer.

Where when the transaction is carried out, it includes dividends, royalties, interest, gifts/awards, rent, and other income related to the use of assets other than land or buildings.

The PPh 23 rate is imposed based on the value of the Tax Base (DPP) or the gross amount of the income earned.

Therefore the rate of 15% of this gross amount consists of:

  • Dividends, except for the distribution of dividends to individuals, are subject to final.
  • Prizes and awards, other than those withheld from PPh 21.

The rate of 2% of the gross amount consists of:

  • Rent and other income related to the use of property, except rent of land and or buildings.
  • Fees for engineering services, management services, construction services, and consulting services
  • Other benefits that have been regulated in accordance with the Regulation of the Minister of Finance No. 141/PMK.03/2015

Article 25

Finally, there is Article 25 income tax.

This tax is a tax installment that can be calculated according to the amount of income tax payable, according to the Annual Income Tax Return minus the withheld income tax and the income tax payable abroad cannot be credited by the taxpayer.

How to Calculate Corporate Income Tax (PPh) 

In general, the calculation of the corporate income tax rate is 25% of the taxable income.

This amount has been regulated in tax regulations so that every business entity is obliged to comply with and carefully calculate the taxes that must be paid in order to become a business entity that complies with the regulations of corporate taxpayers.

There are several ways to calculate Corporate Income Tax, so you need to know how to calculate income tax so that you can manage taxes properly:

PT Sentosa Raya Buana earns a gross income of IDR 2 billion, so the amount of income tax from PT Sentosa Raya Buana is:

50% x 25% x IDR 5 billion = IDR 625 million

However, during the 2019 period, PT Sentosa Raya Buana has deposited employee income tax to the state treasury worth Rp 100 million and income tax article 23 worth Rp 200 million. So, the regular income tax of PT. Sentosa Raya Buana, namely:

IDR 625 million – IDR 100 million – IDR 200 million = IDR 325 million

Rp325 million is a figure that can be repaid by PT. Sentosa Raya Buana to the state treasury for the income of business entities in 2019.

Therefore, the above amount is the remaining tax that must be paid by PT. Sentosa Raya Buana in 2019.

The tax can be repaid by seeking approval from the local tax office.

 

No Information Amount
1 Gross Income 2.000.000.000
2 Income Tax Credit 21 100.000.000
3 Income Tax Credit 23 200.000.000
4 Corporate Income Tax (50% x 25% IDR 2 Billion) 625.000.000
5 Income Tax Payable ((4)-(2)-(3)) 325.000.000

More Accurate Income Tax Calculation Using Journal

For those of you who have a business, calculating business entity tax is indeed confusing, especially if the company does not have good accounting records.

In fact, good records affect the estimation and planning of business tax payments in the future.

Therefore, you can use the Journal as an automated tool to manage your taxes online.

Mekari Jurnal’s accounting software can help you perform tax calculations automatically in accordance with government regulations in Indonesia so that the process is faster, safer, and more profitable.

Through the Journal tax application feature that is integrated with DGT’s official partner, Klikpajak. All reporting processes from VAT, Employee Tax (PPh 21), and Final PPh to run more easily.

Some of the features that you can enjoy are:

  • Withholding tax report. Review the summary of tax calculations with withholding types from all online business financial activities.
  • Sales Tax Report. Monitor tax calculations with incremental types based on sales activity in your business.
  • E-Invoice. One-click to report VAT tax and immediately get a valid proof of report from DGT. The process is automated and more practical.

Immediately register your business now and enjoy a free trial of the Journal for 14 days.

That’s an explanation of what corporate income tax (PPh) is and how to calculate it with the right calculation. May be useful!

Follow Mekari Jurnal‘s social media for more information about the business, finance, and accounting.

 

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