The Indonesian Government has just passed a new regulation with regards to an Update of Non-Taxable Income. The update has an effective date of January 1, 2015. The regulation was issued by Director General of Taxation on 7 August 2015 under DGT Regulation No PER-32/PJ/2015.

The Non-Taxable Income Exemption has been increased From IDR 24,300,000.00 to IDR 36,000,000.00 effective January 2015. Since the regulation is effective January 1, 2015, all previous payroll cycles have to be recalculated to account for the increase in the Non-Taxable Base. The taxpayer must recalculate and revise the monthly income tax returns for the period of January to July 2015, and any tax overpayment that occurred can be compensated for the period of July to December 2015. Therefore, a reprocessing of the monthly income tax returns is needed. August 1, 2015, going forward the new increased base will apply.

Please note that it is mandatory to perform the reconciliation and revision per the government mandate for the period of January – July 2015 with new updated nontaxable income and it applies to all companies in Indonesia.

Kira Rubiano, Sr. Partner Management Specialist – Europe/Asia Pac provides Celergo alerts