According to the law, income tax article 23 is a tax imposed on capital growth, provision of services, or gifts and gifts, except those that are deducted from income tax according to income generating parties (buyers or recipients of services).
Then, as already mentioned, different income tax rates apply under Article 23 depending on the services covered by that Article 23. It should also be noted that the final value of PPh 23 varies from 2 percent to tens of percent.
In addition, income tax article 23 does not have an NPWP or Taxpayer Identification Number, which is also different from a taxpayer who has an NPWP. This refers to the legal basis for income tax article 23 which regulates the determination of the final PPh 23 object of PPh23.
Of course, the final PPh 23 does not apply to all services. Taxpayers who carry out service activities are required to understand the PPh 23 tax, and what types of PPh 23 services are, including the types of technical services for Article 23
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Article 23 of the income tax generally applies when a transaction occurs between a revenue supplier (buyer or service recipient) and a revenue recipient (for example, seller or service provider).
After that, the income recipient withholds income tax and notifies the state. As an income tax collector, article 23 is obliged to make a tax withholding letter and submit it to the opposing party or the person whose income tax is withheld.
For details on the types of Income Tax article 23 services and PPh 23 service rates as well as PPh 23 prices without the basis for NPWP and PPh 23 tax assessments, to continue the technical explanation of PPh 23 services which are determined in the final percentage, see the following explanation below.
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The Following are The Tariffs and Objects of Article 23 Income Tax or Income Tax Article 23
The percentage of Income Tax Article 23 is determined by the tax base value (DPP) or the gross amount of income. Income is subject to two types of tariffs, namely a tax of 15 percent and 2 percent. Rates depend on PPh 23 points, for example:
1. Tariff 15 Percent of the Gross Amount
- Dividends, except distribution of final fees, interest, and licenses to individuals.
- Premiums and bonuses, except those withholding income tax 21.
2. Tariff 2 Percent of Gross
- Rent and other income related to the use of the property.
- Replacement of planning services, management services, construction services, consulting services, and other services that are deducted based on the 21 other Service Income Tax Laws listed in PMK no. 141/PMK.03/2015.
3. Taxpayers Who Do Not Have NPWP are Subject to a Higher Tax Rate than Article 23 Income Tax
There are several types of services covered in Article 23 Income Tax which has been added by the Government. The type of service is listed in the PMK number. 1 1/PMK.03/2015, among others:
- Law
- Architecture
- Urban planning and landscape architecture
- Designer (design)
- Appraisal (appraisal)
- Actuaries
- Accounting, bookkeeping, and attestation of financial statements
- Appraiser (appraisal)
- Actuary
- Accounting, bookkeeping, and attestation of financial statements
- Cleaning or cleaning service
- Vacuum the septic tank
- Pool maintenance
- Catering or catering
- Freight forwarding
- Logistics
- Document management
- Packing
- Laboratory and/or tests, except those conducted by educational institutions or those related to academic research
- Drilling in the field of oil and gas (oil and gas) extraction, except for drilling carried out by permanent business units
- Creation of promotional tools for films, advertisements, posters, photos, slides, cliches, banners, brochures, billboards, and folders
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The Subject of Withholding / Withholding Income Tax PPh23
The subject of withholding is the Taxpayer who gives the other party a certificate of withholding 23. The tax withheld or collected here is the Taxpayer who receives the Article 23 withholding letter from the transaction counterparty.
Withholding PPh 23 in Corporate Form
- State agency Income tax holder
- domestic agency
- Event organizer
- Permanent place of business
- Or other foreign company representatives
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Tax Deductions for Individuals
Income tax article 23 Domestic individual taxpayers (only in the case of income tax article 23 rental) are allocated as withholding PPh 23. A decree (SKP) issued by the head of the tax service must be KPP.
But the default format is not available for certain domestic individual Taxpayers that have been determined by the Director General of Tax Withholding based on PPh 23 KEP-50/PJ/1999, namely:
- Accountant
- Architect
- Doctor
- Notary
- State PPAT. sub-district managers, lawyers, and self-employed consultants
- The person who manages the company that records the rental payments.
- This self-employed taxpayer withholds income tax under Article 23 only on income other than land and buildings.
Subjects subject to a tax deduction for this type of PPh 23 service are as follows according to Article 23, namely the first is a Domestic Taxpayer (WP), can be an individual or corporate Taxpayer and the second is a Permanent Place of Business.
Article 23 Exemption from Income Tax
Not all income is subject to Article 23 Income Tax. The following is a list of Article 23 income tax exemptions:
1. Income owed or returned to the bank.
2. Rent paid or payable in connection with option leases.
3. Dividends or profit sharing received or obtained by joint stock companies as domestic taxpayers from the share capital of cooperatives, BUMN/BUMD, business units established and located in Indonesia with the following conditions:
- Dividends are received from the remaining income fund.
- Participation of a BUMN/BUMD joint stock company in a dividend company of at least 25% (twenty-five percent) of the total paid-up capital.
- Part of the profits received or accumulated by the trust company, whose capital is not divided into shares, corporations, partnerships, corporations, and joint ventures, including the owners of investment contract shares.
- Cooperative SHU paid by cooperatives to its members.
- Income paid or paid by financial services to those who act as distributors of loans and/or financing.
The legal basis for PPh 23 which regulates Article 23 of Income Tax and the provisions of this Article 23 regarding the submission of Income Tax Returns has several tax provisions as the legal basis. The legal basis for PPh Article 23 is several tax laws that determine the percentage of tax that must be paid:
Article 23 Income Tax Law no. 7 of 1983, as last amended by Law no. 36/2008 concerning the fourth amendment to Law no. 7/1983 on income tax
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