Friday, July 21, 2017
Government Still Assessing Potential Tax Rules for Online Transportation Application Companies
Prayogo Serevin Wisnumurti, Nanda Narendra Putra
The government is still reviewing the various types of tax levies which will be applied to providers of online transportation applications. At the present time, the Directorate General of Taxes at the Ministry of Finance (Direktorat Jenderal Pajak – DGT) is still formulating technical rules for the collection of taxes from online transportation-application companies.
The Director of Counselling, Services and Public Relations at the DGT, Hestu Yoga Saksama, recently stated that his department was reviewing the various types of taxes which will be collected from the incomes of online transportation companies. This is a relatively new industry for Indonesia, being approximately only two years old, and the DGT is responsible for formulating the appropriate tax-collection measures which apply across this new sector of the economy.
“We are currently formulating the relevant law. Everyone who has an income is required to pay taxes, however seeing as this is a new area of the economy, then we should really formulate a new type of tax. Indeed, this sector differs considerably from industry,” Mr. Hestu explained in Jakarta on Wednesday, 19 July.
However, according to Hestu, the type of tax that will ultimately be imposed will not represent a completely new formulation but will instead resemble a more common form of tax, such as income tax (pajak penghasilan – PPh) or value-added tax (pajak pertambahan nilai– PPN). As this new tax regime has not yet been implemented, providers of online transportation applications are still calculating their PPh and PPN at the general rate of tax. However, after the relevant studies have been completed and the new rules have been published, then all subsequent calculations will utilize a new special rate formulated for providers of online transportation applications.
In addition, Mr. Hestu explained that this rule would also become binding on other application providers operating outside the field of online transportation. Therefore, it is vital that any mechanism that is ultimately implemented is first well prepared and formulated, so that any tax-collection procedures can be easily implemented by the DGT.
“If you are talking about PPh, then it can be charged by way of a self-reporting, self-appraisal mechanism. However other PPh mechanisms can also be employed, such as collections through other parties. This also applies to other businesses,” Mr. Hestu explained.
Based on the results of a Hukumonline investigation, providers of online transportation can be classified as domestic legal entities insofar as they are established or domiciled within Indonesia. Being a tax subject of a domestic legal entity obviously has implications for the company concerned, including obligations regarding the payment, withholding and reporting of taxes such as PPh21, 23 and 26.
Meanwhile, from the perspective of PPN, providers of online transportation companies are to be categorized as Taxable Entrepreneurs (Pengusaha Kena Pajak - PKP) if such companies undertake deliveries of taxable goods and/or taxable services which are subject to tax under the Law on Value-Added Tax for Goods and Services and Sales Tax for Luxury Goods (Undang-Undang Pajak Pertambahan Nilai Barang dan Jasadan Pajak Penjualanatas Barang Mewah – UU PPN) and not categorized as small-scale entrepreneurs, as stipulated under Ministry of Finance Regulation No. 197/PMK.03/2013.
In the case of goods-delivery services, such services may become subject to PPN in accordance with Ministry of Finance Regulation No. 38/PMK.011/2013 (Regulation 38/2013). Meanwhile, from a driver’s perspective, if their income exceeds the Non-Taxable Income (Penghasilan Tidak Kena Pajak – PTKP) threshold of IDR 36 million per year for Individual Taxpayers (Wajib Pajak Orang Pribadi – WPOP), IDR 39 million per year for Married Taxpayers (Wajib Pajak Kawin – WPK), with an additional IDR 3 million threshold for additional dependents, then they will also be affected by PPh Law Article 21 and will be required to be in possession of a Taxpayer Registration Number (Nomor Pokok Wajib Pajak – NPWP).
Previously, Pudji Hartanto Iskandar, the Director General of Land Transportation at the Ministry of Transportation, stated that the providers of online transportation companies, based on Ministry of Transportation Regulation No. 32 of 2016 on the Organization of Non-Fixed-Route Public-Transportation Services, had to be Indonesian legal entities which met certain minimum criteria, such as possession of a bank account in which they could store income from the sale or delivery of services.
“Currently, we are also assessing additional input from the DGT regarding criteria for providers of information technology-based applications which engage in business activities within Indonesia,” Mr. Pudji explained, as quoted by the Indonesian news agency ANTARA in early March of this year.
In addition to the above-mentioned obligations, application providers are also required to own or control servers or data centers which are domiciled within Indonesia; to undertake marketing, promotional and other related activities; and to operate consumer-complaint management services.