Definition of Income Tax

Course : Tax Law Lecture : Rahayu Credit Hours : 2 Credits Semester Sessions : 1 Semester, 2019/2020 Session Prepared By : Nicky Aviles LECTURE NOTES A. Definition of Income Tax Earnings that have obtained by every must Taxpayers who have NPWP ( number tree must taxes ) is mandatory imposed tax that is tax income . Tax income is tax imposed _ on subject tax on the income he earns on year taxes may also be imposed tax For income in part year taxes may also be imposed tax For income in part year tax when obligation tax its subjective started or end year tax . subject tax received _ or obtain income , in Law no. 36 of 2008 concerning Tax Income ( PPh ) is called Must Tax . Must Tax subject to tax on income received _ or he got during One year tax or can also be imposed tax For income in part year tax if obligation tax its subjective started or end in year tax . Following definition from a number of expert about Tax Income : According to Official (2003), is as following : Tax income is tax imposed _ to subject tax on income received _ or he got in something year taxes (p.74). According to Kesit (2001), is as following : Tax income is tax imposed _ to income which is obtained by must tax ( entity effort ) above activities carried out in Indonesia (p.1). According to Hartanto (2003), is as following : Tax income is tax imposed _ or collected only on income ( derived from treasure or capital), and No tax collected _ or imposed on treasure and capital (p.136). Temporary it , Standard Accountancy Finance (2002) provides definition as following : Tax income is calculated tax _ based on tax regulations And tax imposed on income hit tax company . Income Tax is a type of subjective tax whose tax obligations are attached to the Tax Subject concerned, meaning that the tax obligations are intended not to be delegated to other Tax Subjects. Therefore, in order to provide legal certainty, it is important to determine the start and end times of subjective tax obligations. B. Legal Basis of Income Tax Income tax (PPh) in Indonesia was regulated for the first time by Law Number 7 of 1983 with an explanation in the State Gazette of the Republic of Indonesia of 1983 Number 50. Subsequently, this regulation was amended by :  Law Number 7 of 1991  Law Number 10 of 1994  Law Number 17 of 2000  Law Number 36 of 2008 From July 2003 to December 2004, the government implemented a government-borne tax system regulated in: Government Regulation Number 47 of 2003 and Minister of Finance Decree Number 486/KMK.03/2003 . Changes in Non-Taxable Income (PTKP) have also been adjusted several times in:  Regulation of the Minister of Finance Number 564/KMK.03/2004, valid for the 2005 tax year (as well as eliminating the tax borne by the government).  Regulation of the Minister of Finance No. 137/PMK.03/2005, valid for the 2006 tax year C. Income tax subject According to the Act Number 36 of 2008 , the subject of income tax is as follows: 1. Private Person namely individuals who reside in Indonesia, individuals who are in Indonesia for more than 183 (one hundred and eighty three) days within a period of 12 (twelve) months, or individuals who in a tax year are in Indonesia and have the intention to residing in Indonesia. 2. Undivided Inheritance namely the inheritance of someone who has died and has not been divided but generates income, then the income is subject to tax. 3. Body bodies established or domiciled in Indonesia, except for certain units of government agencies that meet the following criteria:  its formation based on the provisions of the legislation;  the financing comes from the State Revenue and Expenditure Budget or the Regional Revenue and Expenditure Budget;  the revenue is included in the budget of the Central Government or Regional Government; And  the bookkeeping is checked by the state functional supervisory apparatus; And 4. Permanent form of business i.e. a business form used by an individual who does not reside in Indonesia or is in Indonesia for no more than 183 days within a twelve-month period, or an entity that is not established and domiciled in Indonesia, which carries out activities in Indonesia. And what is not included as a Tax Subject is as follows: A. Representative bodies of foreign countries; B. Diplomatic representative officials, and consulates or other officials from foreign countries and people who are seconded to those who work for and live with them, provided that:  not an Indonesian citizen; And  in Indonesia do not receive or earn other income outside of the position or work;  the country concerned provides reciprocal treatment; C. International Organizations stipulated by Decree of the Minister of Finance with the following conditions:  Indonesia is a member of the organization;  not running a business or other activity to obtain income from Indonesia other than providing loans to the government whose funds come from member contributions; D. Officials representing international organizations determined by a Decree of the Minister of Finance with the following conditions: E. not an Indonesian citizen; And F. not running a business or activity or other work to earn income from Indonesia.