Tax liabilities for a particular period or year must typically be paid to the State Treasury through a designated tax-payment bank (bank persepsi) and then accounted for to the ITO through the filing of the relevant tax returns. Tax payments and tax returns filing for a particular tax must
be undertaken monthly or annually, or both monthly and annually (depending upon the tax obligation in question). Tax payments should generally be conducted electronically. The opportunity to use electronic channels to complete tax filing obligations is also available.
A summary of these tax obligations is as follows:
Monthly tax obligations
Annual tax obligations
Late payments of the above taxes incur interest penalties at 2% per month, with a maximum of 48%. Part of a month, for example a single day, is considered a full month.
Late filing of a tax return or failure to file a tax return incurs an administrative penalty at the following amounts:
For annual income tax returns, taxpayers may extend the filing deadline by up to two months. This may be done by filing a written notification to the DGT before the deadline, together with a tentative tax calculation. The tax due according to the tentative calculation (if any) must be settled before submitting the extension notification. If the actual
tax due based on the final tax calculation is higher than the tentative calculation, an interest penalty of 2% per month will apply to the difference until the shortfall is paid.
Failure to file a tax return by the relevant deadline may
result in the DGT to issue a warning letter to the taxpayer in question. The warning letter will typically require the taxpayer to file the tax return within 30 days of the warning letter date. Ignoring such a letter can prompt the DGT to issue an official tax assessment along with an administrative penalty of 50% of the assessed tax.
Except for corporate and individual income taxes, taxes are
to be accounted for on a decentralised basis. A company
with business units (branches) spread over the country must accordingly account for the tax obligations to the district service tax offices with which the branches are registered. Please refer to pages 50-51 regarding centralisation of VAT reporting.
In general, the main form of a tax return must be prepared in electronic format (e-tax returns), except for certain taxpayers. E-tax returns can be filed to the ITO either in the conventional manner, i.e., submitting the hard copy and the soft copy of the tax returns to the relevant ITO, or through e-filing, i.e., by submitting the e-tax returns through DGT’s website or by using an application service provider.