Category: Tax & Accounting
Written by Dewi Tri Utami on 05/09/2022
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.
Taxable enterprises / persons (PKP / Pengusaha Kena Pajak) doesn’t consist of all business owners. Those with a turnover of more than 4.8 billion who exports taxable goods and services and those who engage in activities to provide taxable goods and services meet the requirements for inclusion as a PKP.
With this service, we can help you determine your eligibility as a PKP, apply for such status, calculate monthly VAT obligations, lodge monthly VAT reports to the Tax Authority, and help in issuing Tax Invoices.
Taxable enterprises / person (PKP / Pengusaha Kena Pajak) are business owners who engage in activities related to providing taxable goods and services. They are subject to taxation under the Indonesian Value Added Tax Law (VAT Law) of 1984 and its amendments. The scope of PKP is determined by an order issued by the Minister of Finance, and small business owners can choose to apply as a PKP.
Enterprises under the VAT Law consist of those who engage in business activities that produce, export, import, engage in trading, use intangible goods from outside the Customs Area, engage in service businesses including exporting services, and use services from outside the Customs Area.
The VAT Law’s Article 1 number 1 defines the term “Customs Area”, which refers to the Republic of Indonesia’s territory. It consists of the following:
On the other hand, PKP refers to a business person who provides Taxable Goods (BKP/Barang Kena Pajak) or Taxable Services (JKP/Jasa Kena Pajak), which are both subject to tax under the VAT Law. Thus, the provided items or services set non-PKP apart from PKP. If the recipient is a BKP or JKP, we refer the businessperson as PKP. Enterprises/individuals must declare their company to be verified as PKP if they submit BKP, hand over JKP, export BKP, JKP, or export intangible BKP within the Customs Area.
The Tax Service Office issued an official letter known as the inauguration letter, given to PKP. Registered enterprises/individuals then will be taxed. In addition, they will have additional rights and obligations.
Small business owner who has not been confirmed as PKP conducts business activities involving the delivery of goods and services, including taxable products (BKP) and taxable services, are not required to collect or submit Value Added Tax (VAT).
Small business owners who do not have PKP status but wish to be one must register with the Tax Service Office (KPP/Kantor Pelayanan Pajak). Through self-registration (NPPKP/Nomor Identitas Pengusaha Kena Pajak), they will obtain Taxpayer Identification Number (NPWP/Nomor Pokok Wajib Pajak) and Taxable Enterprises Identification Number.
Below are the requirements of a Taxable Enterprises/Persons (PKP):
A PKP is subject to certain duties or requirements, such as:
There are several advantages of being a Taxable Enterprises / Persons (PKP / Pengusaha Kena Pajak). Below are some of the benefits of being a PKP:
Although there are benefits, PKP must maintain order and discipline when reporting tax invoices and VAT Period Tax Returns. If a PKP submits tax invoices and reports SPT Masa late, it may be subject to administrative penalties such as fines and/or interest as well as criminal penalties.
There are two methods for PKP registration: manual and online.
The tax consultants at Putranto Alliance can assist you with determining your eligibility to become a PKP, applying for that status, calculating your monthly VAT liabilities, submitting monthly VAT reports to the Tax Authority, and assisting with the issuance of Tax Invoices.
Value Added Tax, also known as VAT, is a tax levied on the sale and purchase of goods and services made by individual taxpayers or company taxpayers who have qualified as taxable enterprises (PKP).
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