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Navigating Natura Tax in the Annual Tax Return (SPT): A Guide for Taxpayers in Indonesia

Navigating Natura Tax in the Annual Tax Return (SPT): A Guide for Taxpayers in Indonesia

​As the first quarter of the year unfolds in Indonesia, Indonesian and expatriate taxpayers are required to file their Annual Tax Returns, known as Surat Pemberitahuan Tahunan (SPT). Beyond being a mere formality, the SPT serves as a comprehensive roadmap, shedding light on the intricate financial journey of the past year. However, this year brings an additional layer of complexity with the impending implementation of the Natura Tax in mid-2023, adding a new dimension to the tax landscape.

What is the Annual Tax Return or Surat Pemberitahuan Tahunan (SPT)?

The Annual Tax Return (SPT) is a crucial document for taxpayers to report their tax calculations, payments, taxable and non-taxable objects, as well as assets and liabilities, in alignment with tax laws. It's a form that taxpayers must file to report their income earned during the tax year. Personal incomes considered tax objectives and must be included in SPT are:

  • Incomes earned from work, such as salary, wages, bonuses, incentives, etc.

  • Incomes earned from an investment, such as dividends, revenue, royalty, etc.

  • Other incomes, such as prizes, tax refunds, etc.

  • Benefit in kind or Remuneration in-kind (natura)

To complete their SPT, the taxpayers require a withholding Article 21 Income Tax receipt (bukti potong PPh 21) that will be distributed by the employers at the end of the fiscal year. This document provides a comprehensive breakdown, including received income, deducted tax amounts, and any non-monetary taxable benefits, commonly referred to as natura tax.

Understanding the Implications of Natura Tax in the Annual Tax Return

Natura tax is a form of taxation applicable to non-monetary benefits, encompassing goods or services provided by companies to their employees for productive or economic activities; this is often referred to as "3M" (mendapatkan, menagih, memelihara penghasilan).

The natura tax is regulated under Law Number 7 of 2021 concerning the Harmonisation of Tax Regulations (HPP) and derivative regulations in Government Regulation Number 55 of 2022. Subsequently, the updated regulations were stipulated in PMK 66/2023 to make the implementation effective from July 2023.

The mid-year enforcement necessitates benefit recipients to be cautious when reporting their taxes, as it affects the calculation and reporting system, as follows:

  • Benefits received before the updated regulations in July 2023 should be reported in the annual tax return with self-calculated payment.

  • Benefits received subsequently require monthly withholding and remittance.

Enjoyments as Tax Object and Employee Exemptions

According to the HPP Law, specific types of non-cash benefits are exempt from taxation when provided by companies to employees for productivity and/or economic activities. These non-tax objects include enjoyments from specific area assignments; work-related obligations like uniforms; benefits funded by state (APBN), regional (APBD), or village budgets (APBDesa); and other enjoyments with specific types or limitations.

On the other hand, non-monetary benefits with a high value that do not directly contribute to the employee's productivity are classified as tax objects, for examples:

  • residences,

  • transportation,

  • meals,

  • vouchers,

and various amenities that possess a high value and do not directly