The Indonesian Government just passed a new regulation with regard to an update of non-taxable income. The update has an effective date of January 1, 2016. The regulation was issued by the Director General of Taxation under DGT Regulation No. PER-32/PJ/2015 (see initial story in the October 2015 Global Payroll issue).
The Non-Taxable Income Exemption has been increased From IDR 36,000,000.00 to IDR 54,000,000.00 effective January 2016. Due to the fact that the Regulation is effective January 1, 2016, all previous cycle payrolls 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 June 2016 and any tax overpayment that occurred can be compensated for the period of July to December 2016. Therefore, a reprocessing of the monthly income tax returns is needed. The new increased base will apply beginning August 1, 2016.
Your payroll provider should be able to complete the monthly recalculation and revised income tax return. Note that it is mandatory to perform the reconciliation and revision per the government mandate for the period of January–July 2016 with the new updated nontaxable income base and it applies to all companies in Indonesia.
The deadline for the submission of the revised monthly tax returns is end of October 2016.