Descriminatory Taxations Regulations

There are discriminatory taxation regulations:

1.  Decision of the Minister of Finance Number 416/KMK.04/1994 concerning Net Income Specific Calculation Norm For Resident Shipping Enterprise Taxpayers

According to the provisions of Article 2 paragraph (1) the Decision of the Minister of Finance Number 416/KMK.04/1994, net income for domestic shipping enterprise taxpayers  is determined 4% of the gross turnover. The term gross turn over means gross consideration or pecuniary substitute in  cash or in monetary value received or obtained by domestic shipping enterprise taxpayer from transporting people and / or goods loaded from one port to another port in Indonesia and / or from ports in Indonesia to  ports out side Indonesia vise versa.

Further in accordance with the provisions of Article 2 paragraph (2) of the above Decision  the amount of Income Tax on income derived from the carriage of persons and / or goods for shall be 1.2% of the gross turn over.

Remarks:

The amount of 1.2% of Income Tax obtained from multiplication of Income Tax rate of 30% against  Net Income Specific Calculation Norm of 4%, or 30% x 4% = 1.2% of the gross turn over.

2.  Decision of the Minister of Finance Number 417/KMK.04/1996, concerning Net Income Specific Calculation Norm For Foreign Shipping and Foreign Airline Enterprise Taxpayers

According to the provisions of Article 2 paragraph (1) Decision of the Minister of Finance Number 417/KMK.04/1996,  net income for foreign shipping and foreign airline enterprise taxpayers is determined 6% of the gross turnover.

The term gross turn over means gross consideration or pecuniary substitute in  cash or in monetary value received or obtained by foreign shipping and foreign airline enterprise taxpayers from transporting people and / or goods loaded from one port to another port in Indonesia and / or from ports in Indonesia to ports out side Indonesia.

Further, pursuant to the provisions of Article 2 paragraph (2) the above Decision, Income Tax on income derived from the carriage of persons and / or goods for Taxpayers for foreign shipping and foreign airline enterprise taxpayers shall be 2.64% of the gross turnover.

The Income Tax of 2.64% of the gross turn over shall be final tax in nature.

Remarks:

The figure of  Income Tax of 2.64 obtained from the following calculation:

  • Gross turn over = 100%
  • Gross turn over: 6% x 100%                                                             = 6%
  • Corporate Income Tax payable:30% x 6%                                 = 1.8% – / –
  • Taxable income after deducted by tax (branch profits)      = 4.2%
  • Tax on branch profits payable: 20% x 4.2%                              = 0.84 +
  • Total Income Tax payable                                                                ​​= 2.64% of gross turn over.

3.   Decision of the Minister of Finance Number 475/KMK.04/1996, concerning Net Income Specific Calculation Norm For Domestic Airline Enterprise Taxpayers 

According to the provisions of Article 2 paragraph (1) the Decision of the Minister of Finance Number 475/KMK.04/1996, net income for  Domestic Airline Enterprise Taxpayers is determined 6% of the gross turn over.

The term gross turn over means gross consideration or pecuniary substitute in  cash or in monetary value received or obtained by domestic shipping enterprise taxpayer from transporting people and / or goods loaded from one air port to another air port in Indonesia and / or from air ports in Indonesia to foreign air ports. The term domestic airline enterprise taxpayer means airline enterprise domiciled in Indonesia that generates income from charter agreement.

Further, pursuant to the provisions of Article 2 paragraph (2) of the above Decision, Income Tax on income from the carriage of persons and / or goods for domestic airline enterprise taxpayer shall be 1,8% of the gross turn over .

The 1.8% Income Tax is creditable against the Corporate Income Tax and shall be reported in Annual Corporate Income Tax.

Remarks:

The Income Income Tax of 1,8% of gross turn over from the multiplication  Income Tax rate of 30% against Net Income Specific Calculation Norm of 6%, or 30% x 6% = 1.8% of the gross turn over.

Comments:

From the description above, we may come to the conclusion that  for domestic shipping enterprise taxpayers, foreign shipping and foreign airline enterprise taxpayers, and domestic airline enterprise taxpayers, until recently they are imposed Corporate Income Tax with the tax rate of 30%. Whilst, since January 1, 2010 other taxpayers are imposed Corporate Income Tax with the tax rate of 25%.

This being the case, obviously raises the discriminatory imposition of taxes. In addition, the adoption the tax rate of 30% positively contrary to the provisions of Article 17 paragraph (2a) of  Act No. 36 of 2008 which stipulates that the Corporate Income Tax rate of 28% turned into a 25% effective as of the tax year 2010.

Throughout the authors knowledge, to date, the three Decisions of the Minister of Finance mentioned above are still going on. Its have not been revoked or amended to be adjusted with the provision of the new Income Tax Act (Act Number 36 Year 2008).

If discrimination is allowed, what the world says???

Do you have idea or comments on this case? Your comments are highly appreciated.

About Jaja Zakaria

Nama saya Jaja Zakaria, saya tinggal di Depok, Jawa Barat, kurang lebih 40 km dari Jakarta Selatan. Saya alumni Fakultas Hukum Universitas Gadjah Mada, Yogayakarta, dan Opleidings Instituut Financien, Den Haag, Belanda di bidang Hukum Pajak Internasional. Saya pengarang beberapa buku, e-book, dan makalah-makalah perpajakan. Pengalaman saya antara lain pernah menjadi anggota delegasi Indonesia dalam perundingan Perpajakan dengan Denmark, Mesir, Kanada, Uni Emirat Arab, Kuwait, Turki, Brunei Darussalam, Pilipina, Vietnam, Mongolia, dan Taiwan; dalam Study Group on Asian Tax Administration and Research (SGATAR) meeting; dan dalam Joint Commission Indonesia - China. Saya juga anggota International Word Tax Expert.

Posted on May 27, 2013, in English Version, Forum, Taxation Topic and tagged , , , , . Bookmark the permalink. 12 Comments.

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