Services Detail
In the circular it is also mentioned that for the purposes of calculating the income tax payable, the company must re-examine whether the company’s costs can be deducted (Deductible Expenses/DE) or cannot be deducted (Non Deductible Expenses/NDE). As mentioned in the circular, NDE is regulated in Article 9 of ITL.
NDE in calculating the income tax payable in
accordance with Article 9 of ITL are as follows:
- Pdistribution of profits by any name and in any form such as dividends, including dividends paid by insurance companies to policyholders, and distribution of remaining cooperative business results;
- costs charged or incurred for the personal benefit of shareholders, partners or members;
- formation or fertilization of reserve funds, except:
- Handle objections, requests for advance rulings, voluntary disclosures of errors, tax audits and investigations
- 1. reserves for doubtful accounts for banking businesses and other business entities that distribute credit, finance leases with option rights, consumer finance companies and factoring companies calculated based on applicable financial accounting standards with certain limitations after coordinating with the Financial Services Authority;
- 2. reserves for insurance businesses including social assistance reserves formed by the Social Security Body;
- 3. guarantee reserves for the Deposit Insurance Corporation;
- 4. Reserves for reclamation costs for mining businesses;
- 5. Reserves for replanting costs for forestry businesses; and for industrial waste processing industry
- 6. Reserves for closure and maintenance costs for industrial waste disposal sites
- that meets certain requirements;
- d. health insurance premiums, accident insurance, life insurance, dual-purpose insurance and scholarship insurance, paid by individual Taxpayers, unless paid by the employer and the premium is calculated as income for the Taxpayer concerned;
- e. amounts exceeding reasonable amounts paid to shareholders or related parties as compensation in connection with work performed;
- f. donated assets, assistance or donations, and inheritances except for donations or obligatory religious donations for adherents of recognized religions in Indonesia, received by religious institutions established or authorized by the government, the provisions of which are regulated by or based on Government Regulations;
- g. Income Tax;
- h. costs charged or incurred for the personal benefit of Taxpayers or their dependents;
- i. salaries paid to members of partnerships, firms, or limited partnerships whose capital is not divided into shares;
- j. administrative sanctions in the form of interest, fines, and increases, as well as criminal sanctions in the form of fines related to the implementation of provisions of tax laws and regulations.
- k. Expenditures to obtain, collect and maintain income that has a useful life of more than 1 (one) year but rather charged through depreciation or amortization.
