Increase in Limit of Amount Gross Turnover Per Book Year To Determain Small Entrepreneur For VAT Purposes

Based on the Minister of Finance Regulation No. 68/PMK.03/2010, small entrepreneurs for Value Added Tax (VAT) purposes are entrepreneurs who for one book year do deliveries of taxable goods and / or taxable services with the amount of gross turn over and / or gross receipts of not more than IDR 600,000,000,00. They are not required to report their business activities to be designated as a Taxable  Entrepreneur. However, voluntarily they may choose to be designated as a Taxable  Entrepreneur.

Based on the Minister of Finance Regulation No. 197/PMK.03/2012, the limits on gross turn over and / or gross receive increased to not more than IDR 4,800,000,000.00 per book year for those who maintain book keeping, or per calendar year for those who do not maintain book keeping.

With this change, for entrepreneurs whose amount of their gross turn over and / or gross receipts are not more than IDR 4.8 billion per book year/ calendar year shall be regarded as the small entrepreneur. They are no longer required to report its business activities to be designated as a Taxable Entrepreneur.  However, voluntarily they may choose to be designated as a Taxable Entrepreneur.

For Entrepreneurs who had already been designated as the Taxable Entrepreneur, whereas the amount of their gross turn over and / or their gross receipts are not more than IDR 4.8 billion per book year/ calendar year, may apply for revocation of their status as the Taxable Entrepreneur.

Changes in the determination of the limits as small entrepreneur, became effective on January 1, 2014.

Comment:

In order to reduce the administrative burden of taxation, particularly in the form of the issuance of the Value Added Tax Invoice, depositing VAT payable, and the preparation and delivery of the Monthly VAT Return, which should be done every month, for entrepreneur whose amount of gross turn over  and / or gross receipts of not more than IDR 4.8 billion per book year / per year calendar, shall be more profitable to not designated as a Taxable Entrepreneur.

However, in my opinion, it would be more advantageous to choose to be designated as a Taxable Entrepreneur due to the condition that every transaction made with other parties will be included in the VAT system. Any VAT charged at the time of the purchase of taxable goods or use taxable services from other Taxable Entrepreneurs shall constitute Input Tax (Input VAT) which can be credited against  the Output Tax (Output VAT). The output VAT shall be imposed when the entrepreneur deliver taxable goods or render taxable services to other parties. As the consequences of their transactions included in the VAT mechanism, the entrepreneurs shall be neutral to VAT. In addition, if other Taxable Entrepreneurs purchase their taxable goods or use their taxable services the VAT to be imposed shall constitute as Input VAT which can be credited against the Output VAT by the buyer or the user of the service. So that, there will more buyer to purchase their taxable goods or more people to use their taxable services if the entrepreneur is the Taxable Entrepreneur, compared if the entrepreneur is not the Taxable Entrepreneur.

 

 

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 January 8, 2014, in English Version, New Tax Regulation, Taxation Topic and tagged , . Bookmark the permalink. 13 Comments.

  1. Thanks for sharing your thoughts. I really appreciate your efforts
    and I will be waiting for your further post thanks once again.

  2. Genuinely no matter if someone doesn’t know then its up to
    other people that they will help, so here it takes place.

  3. Does your blog have a contact page? I’m having trouble
    locating it but, I’d like to send you an e-mail. I’ve got some recommendations for your blog
    you might be interested in hearing. Either way, great website and I look forward to seeing it expand over time.

  4. Why people still make use of to read news papers when in this
    technological globe the whole thing is available on web?

  5. This piece of writing will assist the internet people for creating new web site or even a weblog from start to end.

  6. Thanks for the auspicious writeup. It in fact used to
    be a amusement account it. Glance advanced to more added agreeable from you!
    However, how can we communicate?

  7. What’s up colleagues, nice paragraph and fastidious arguments commented here, I am really enjoying by these.

  8. Touche. Outstanding arguments. Keep up the great effort.

  9. I like it when individuals get together and share views.
    Great site, keep it up!

  10. It’s amazing to pay a quick visit this website and reading the views of all friends concerning this post,
    while I am also eager of getting familiarity.

  11. Have you ever considered creating an ebook or guest authoring on other websites?

    I have a blog centered on the same topics you discuss and would love to have you
    share some stories/information. I know my readers would value your work.
    If you’re even remotely interested, feel free to shoot me an e-mail.

  12. If some one wants expert view on the topic of blogging and site-building after that i suggest him/her to pay a visit this web
    site, Keep up the good job.

  13. I really can’t believe how great this site is. Keep up the good work. I’m going to tell all my friends about this place.

%d bloggers like this: