Indonesia

8 Chapter Tax

    • Structure of Tax

       a.       General Tax Law ( Law Number 28 of 2007)

      Tax is a mandatory contribution to the owed country, forcefully by an individuals or entities, based on the law, without obtaining compensation directly and used for the need of the country for the people’s prosperity.

      Taxpayers shall be individuals or entities, covering taxpayers, tax withholders and tax collectors that have taxation rights and obligations in accordance with the provisions of taxation legislation.
      Taxable Entrepreneur shall be an entrepreneur that delivers taxable goods and/or provide taxable services subject to taxes pursuant to the Value Added Tax Law of 1984 and its amendments.
      Taxpayer Code Number shall be a code number given to a taxpayer as a means in taxation administration and used as personal identity or identifier of the taxpayer in exercising his/her taxation rights and obligations.
      Tax Year shall be a period of 1 (one) calendar year, except if the taxpayer uses a book year, which is not the same as calendar year.
      Any taxpayer fulfilling subjective and objective requirements in accordance with provisions of taxation legislation shall register with the office of the Directorate General of Taxation whose jurisdiction covers the residence or domicile of the taxpayer and accordingly, he/she is given a taxpayer code number.
      Any taxpayer as entrepreneur subject to taxes pursuant to the Value Added Tax Law of 1984 and its amendment shall report his/her business to the office of the Directorate General of Taxation whose jurisdiction covers the residence or domicile of the entrepreneur, and the business site for the purpose of validation as a taxable entrepreneur.
      The Director General of Taxation may appoint:
      1)      Place of registration and/or place of reporting businesses;
      2)      Place of registration at the office of the Directorate General of Taxation whose jurisdiction covers the business site, besides place of registration, for certain individual taxpayers as entrepreneurs.
      The Director General of Taxation shall ex officio issue taxpayer code numbers and/or validated taxable entrepreneurs, if the taxpayers or taxable entrepreneurs fail to fulfill their obligations to register the residence or domicile of the tax payer and to report his/her business to the Directorate General of Taxation. Taxation obligations of taxpayer having issued by taxpayer code number and/or validated as taxable entrepreneurs ex officio shall start from the moment when the taxpayers fulfill the subjective and objective requirements pursuant to the provisions of taxation legislation in not later than 5 (five) years before the issuance of taxpayer code number and/or validation as taxable entrepreneurs.
      The abolition of taxpayer code number shall be done by the Director General of Taxation if:
      1)      Application for abolition of taxpayer code number is submitted by taxpayer and/or his/her heirs in the case of the taxpayer not longer fulfilling the subjective and/or objective requirements in accordance with provisions of taxation legislation.
      2)      Corporate taxpayer is liquidated because of business discontinuation or merger;
      3)      Permanent-establishment taxpayer discontinues its business activity in Indonesia;
      4)      The Director General of Taxation deems it necessary to abolish taxpayer code number of taxpayer no longer fulfilling the subjective and/or objective requirements in accordance with provisions of taxation legislation.
      Following examination, the Director General of Taxation shall make decision on application for abolition of taxpayer code number in 6 (six) months in case of individual taxpayer or 12 (twelve) months in the case of corporate taxpayer, as from the date of receipt of complete application. The Director General of Taxation ex officio or on the basis of application of taxpayer can revoke validation of taxable entrepreneur.
      The Director General of Taxation, following examination, shall make decision on application for revocation of validation of taxable entrepreneur in 6 (six) months as from the date of receipt of complete application
      A tax period equivalent to one calendar month or other period of time regulated by a regulation of the Minister of Finance shall be 3 (three) calendar months at the maximum.
      Any taxpayer shall fill a tax return properly, completely and clearly in Indonesia language by using Latin letters, Arabic numbers, the rupiah currency, and sign and submit it to the office of the Directorate General of Taxation where the taxpayer is registered or validated or other places stipulated by the Director General of Taxation. The signing can be done in an ordinary ways, by a stamp signature or electronic or digital signature, all of them having the same legality, with the technical procedures regulated by or on the basis of a regulation of the Minister of Finance. The taxpayer already securing a permit from the Minister of Finance to perform bookkeeping by using foreign language and currency other than the rupiah, shall submit a tax return in the Indonesian language and permitted currency other than the rupiah with the implementation here to regulated by or no the basis of regulation of the Minister of Finance. The taxpayer shall pick up directly a tax return in the place appointed by the Director General of Taxation or by other methods whose technical procedures are regulated by or on the basis of a regulation of the Minister of Finance.
      The deadline for the submission of tax return shall be:
      1)      For Periodic tax return, no later than 20 (twenty) days after the end of the tax period;
      2)      For annual income tax return of individual taxpayer, no later than 3 (three) months after the end of the tax year;
      3)      Annual income tax return of corporate taxpayer, no later than 4 (four) months after the end of the tax year.
      Taxpayers with certain criteria can report several tax periods in one tax return. The taxpayers with certain criteria and procedures for reporting shall be regulated by or on the basis of a regulation of the Minister of Finance. The deadline and procedures for reporting the withholding or collection of tax by government treasurers and certain bodies shall be regulated by or on the basis of a regulation of the Minister of Finance.
      If a tax return is not submitted within the period of time or prior to the extended deadline for the submission of tax return, the taxpayer shall be subject to administrative sanction in the form of fine as much as Rp500, 000 (five hundred thousand rupiah) in the case of periodic value-added tax return and Rp100, 000(a hundred thousand rupiah) in the case of other periodic tax returns and Rp1, 000,000.00 (one million rupiah) in the case of annual income tax return of corporate taxpayer as well as Rp100,000.00 (one hundred thousand rupiah) in the case of annual income tax return of individual taxpayer.
      The administrative sanction in the form of fine shall not be imposed on:
      1)      Individual taxpayers already passing away;
      2)      Individual taxpayers no longer undertaking independent business activity or job;
      3)      Individual taxpayers having the status of foreign citizens who have not lived in Indonesia anymore;
      4)      Permanent establishment no longer undertaking activity in Indonesia;
      5)      Corporate taxpayers no longer undertaking business activity but not yet dissolved in accordance with the provisions in force;
      6)      Treasurers no longer conducting payment;
      7)      Taxpayers affected by disaster, with the provisions here to ruled by a regulation of the Minister of Finance; or
      8)      Other taxpayers ruled by or on the basis of a regulation of the Minister of Finance.”
      Taxpayers can extend the period of submission of the annual income tax return to another period of 2 (two) months at the most by notification in writing or other methods to the Director General of Taxation with the provisions be regulated by or on the basis of a regulation of the Minister of Finance. The notification shall be accompanied by a letter of statement on the provisional calculation of tax due in 1 (one) tax year and tax payment form as evidence of the settlement of the remainder of tax due, with the provision here to be regulated by or on the basis of a regulation of the Minister of Finance. If a tax return is not submitted in accordance with the deadline or the extended deadline for the submission of annual tax return, a admonitory shall be issued. The model and content of tax return as well as information and/or documents, which must be attached to it shall be regulated by or on the basis of a regulation of the Minister of Finance.
      A tax return shall be considered not being submitted if:
      1)      The tax return is not signed;
      2)      The tax return is not fully accompanied by information and/or documents;
      3)      The tax return certifying overpayment is submitted after 3 (three) years, following the expiration of tax period, part of tax period or tax year and taxpayer had been reminded in writing.
      If the tax return is considered not being submitted, the Director General shall notify it to the taxpayer.
      Any taxpayer shall fill and submit a tax return in a correct, complete and clear way and sign it. If a taxpayer is a body, a tax return shall be signed by the board of executives or the board of directors. If a taxpayer appoints a proxy by special power of attorney to fill and sign tax return, the special power of attorney shall be attached to the tax return.
      The annual income tax return filled by the taxpayer required to perform bookkeeping shall be accompanied by a financial statement in the form of balance sheet and profit/loss statement as well as other information needed to calculate the amount of taxable income. The financial statement shall be finance statement of the respective tax payers. If the financial statement is audited by public accountant but not enclosed to tax return, the tax return shall be considered incomplete and unclear thus the tax return shall be considered being not submitted.
      The tax return directly submitted by a taxpayer to the office of the Directorate General of Taxation shall be given the date of receipt by the official appointed to that effect, while the annual tax return shall also be given proof of receipt. A tax return can be sent by mail with evidence of sending of the letter or other ways regulated by or on basis of a regulation of the Minister of Finance. The Proof and date of sending the tax return, provided that the tax return is already complete, shall be regarded as proof and date of receipt.
       
      b.      Income Tax Law
       
      Tax Subject
       
      Tax Subject consist of:
      1)      Individual and undivided inheritance as a unit in lieu of the beneficiaries;
      2)      Entity; and
      3)      Permanent establishment. A permanent establishment is a Tax Subject which, for taxation purposes, is treated as a corporate taxpayer.
       
      Tax Subject consists of resident and non-resident Taxpayer.
      Term resident Taxpayer means:
      a)      individual who resides in Indonesia, an individual who has been present in Indonesia for more than 183 (one hundred and eighty-three) days within any 12 (twelve) months period, or an individual who has been residing in Indonesia within a particular taxable year and intends to reside in Indonesia;
      b)      entity established or domiciled in Indonesia, except part of government bodies which fulfills these criteria as follows:
      1. Its establishment is pursuant to the laws;
      2. financed by State Budget or Local Government Budget;
      3. Its revenues are included in State Budget or Local Government Budget; and
      4. Its book keeping is audited by the government auditor; and
      c)       Any undivided inheritance as a unit in lieu of beneficiaries.
       
      The term non-resident tax payer means:
      a)      An individual who does not reside in Indonesia, has been present in Indonesia for not more than 183 (one hundred and eighty-three) days within any 12 (twelve) months period, and an entity which is not established and is not domiciled in Indonesia conducting business or carrying out activities through a permanent establishment in Indonesia; and
      b)       Any individual who does not reside in Indonesia, has been present in Indonesia for not more than 183 (one hundred and eighty-three) days within any 12 (twelve) months period, and any entity which is established outside Indonesia and is not domiciled in Indonesia, which may receive or accrue income from Indonesia other than from conducting business or carrying out activities through permanent establishment.
       
      A permanent establishment is an establishment used by an individual who does not  in Indonesia, an individual who has been present in Indonesia for not more than 183 (one hundred and eighty-three) days within any period of 12 (twelve) months, and an entity which is established out side Indonesia and is not domiciled in Indonesia conducting business or carrying out activities which may include:
      a)      a place of management;
      b)      a branch;
      c)       a representative office;
      d)      an office;
      e)      a factory;
      f)       a workshop;
      g)      a warehouse;
      h)      a space for promotion and selling;
      i)        a mine and a place of extraction of natural resources;
      j)        an area of oil and gas mining;
      k)      a fishery, animal husbandry, agriculture, plantation, or forestry;
      l)        a construction, installation or assembly project;
      m)    any kind of services provided by employees or any other persons, provided that the services were done in more than 60 (sixty) days within a period of 12 (twelve) months;
      n)      an individual or entity acting as a dependent agent;
      o)      an agent or employee of insurance company which is established outside Indonesia and is not domiciled in Indonesia, receiving insurance premium or insuring risk in Indonesia; and
      p)      computer, electronic agent or automatic equipments owned, rented, or used by any electronic transaction provider to conduct business through internet.
       
      Tax Subject does not include the following:
      a)      representative office of foreign countries;
      b)      officials of diplomatic and consular missions, or any other foreign official and any individual who work for and stay with them provided that they are not Indonesian citizens, and in Indonesia they do not receive nor accrue income other than from their position and their official duty in Indonesia, provided that the aforementioned country grants reciprocal treatment;
      c)       any international organization provided that:
      1.       Indonesia is a member of the aforementioned organization ; and
      2.       they do not conduct business or engage in other activities to derive income from Indonesia, except providing the government with loan which the fund comes from the members’ contribution;
      d)      the officials of the representative of international organizations, provided that they are not Indonesian citizens and do not conduct any business, engage in activities nor other employment to derive income from Indonesia.
       
      In determining the taxable income of a resident Taxpayer and a permanent establishment, the following are not deductible :
      a)      distribution of profit in whatever name or form, such as dividends, including dividends paid by an insurance company to policyholders, and any distribution of the surplus by a cooperative;
      b)      expenses charged or incurred for the personal benefit of shareholders, partners or members;
      c)       formation or accumulation of reserves, except:
      §  reserve for bad debt of a bank and other business which conduct business as a creditor, financial lease company, consumer finance company and factoring company;
      §  reserves in an insurance business including reserve for social aid made by Social Security Agency;
      §  guarantee reserve for Deposit Guarantor Institutions;
      §  reserves for cost of reclamation in general mining;
      §  reserve for cost of reforestation in forestry business;
      §  reserve for closing and maintaining industrial waste site conducted by industrial waste processing business.
      d)      insurance premiums for health, accident, life, dual purpose, and education insurance which are paid by an individual Taxpayer, except those paid by an employer where premiums is treated as income of the Taxpayer;
      e)      consideration or remuneration related to employment or services given in the form of a benefit in kind, except provision of food and beverages for employees or consideration or remuneration given in the form of a benefit in kind in certain regions and in connection with employment as stipulated by or based on the Minister of Finance Regulation;
      f)       excessive compensation paid to shareholders or other associated parties as a consideration for work performed;
      g)      gifts, aid or donations, and inheritances as referred to in Article 4 paragraph (3) subparagraph a and subparagraph b, except donations as referred to in Article 6 paragraph (1) subparagraph i to subparagraph m and zakat received by an Amil Zakat Board or other amil zakat institutions established or approved by the government or compulsory religious donation for the followers of religions acknowledged by the Government, received by religious institutions established and approved by the Government, which are stipulated by or based on a Government Regulation;
      h)      income tax;
      i)        cost incurred for the personal benefit of a Taxpayer or his dependents;
      j)        salary paid to a member of an association, firm, or limited partnership the capital of which does not consist of stocks;
      k)      administrative penalty in the form of interest, fines, and surcharges, as well as criminal penalty in the form of fines imposed pursuant to the tax laws.
      Expenditures for earning, collecting, and securing of income having a useful life of more than one year, shall not be charged directly to income but shall be deducted through depreciation or amortization.

      Tax Object

       
      Taxable Object is income, which is defined as any increase in economics capacity received by or accrued by aTaxpayer from Indonesia as well as from offshore, which may be utilized for consumption or increasing the taxpayer’s wealth, in whatever name and form, including:
      a)      compensation or remuneration received or accrued in respect of employment or service rendered, including salary, wage, allowance, honorarium, commission, bonus, gratuity, pension, or other forms of remuneration, unless otherwise stipulated by this Law;
      b)      lottery prizes, or gifts in respect of employment or activities, and reward;
      c)       business profits;
      d)      gains from the sale or transfer of property, including:
      1.       gains from a transfer of property to a company, a partnership, and other entity in exchange for shares or capital contribution;
      2.       gains accrued by a company, a partnership or other entities from the transfer of property to its shareholders, partners or members;
      3.       gains from a liquidation, merger, consolidation, expansion, split-up, acquisition, or reorganization in whatever name and form;
      4.       gains from transfer of property in the form of grant, aid or donation, unless they are given to relatives within one degree of direct lineage, and to religious body, educational or other social entity including foundation,cooperative, or to any individual who conducting micro and small business which stipulated by Minister of Finance, provided that aforementioned parties have no business, employement, ownership nor control relationship; and
      5.       gains from the sale or the transfer of part or all of mining rights, participation in financing, or capitalization in a mining company;
      e)      refund of tax payments which already deducted as an expense and any additional payment of tax refund;
      f)       interest including premium, discounts, and compensation for loan repayment guarantees;
      g)      dividends, in whatever name and form, including dividends from an insurance company to its policyholders, and distribution of net income by a cooperative;
      h)      royalty or compensation from the use of right;
      i)        rents and other income from the use of property;
      j)        annuities;
      k)      gains from the discharge of indebtedness up to a certain amount stipulated by Government Regulation;
      l)        gains from foreign exchange
      m)    gains from revaluation of assets;
      n)      insurance premium;
      o)      contribution received by or accrued by an association from its members who are taxpayers engaged in business or independent services;
      p)      an increase in net wealth from income which has not been taxed;
      q)      income from sharia business;
      r)       compensation as stipulated by Laws concerning General Provisions and Tax Procedures; and
      s)       surplus of Bank of Indonesia.
       
      There shall be excluded from taxable object:
      a)      1. aids or donations, including zakat received by amil zakat board or other amil zakat institutions established or approved by the Government and received by eligible zakat recipients or compulsory religious donation for the followers of religions acknowledged by the Government, received by religious institutions established and approved by the Government and received by eligible donations recipients, which are stipulated by or based on a Government Regulation and;
       
      2. gifts received by relatives within one degree of direct lineage, and to religious body, educational or other social entity including foundation, cooperative, or to any individual who conducting micro and small business which stipulated by or based on a Minister of Finance Regulation, provided that aforementioned parties have no business, employement, ownership nor control relationship; and
      b)      inheritance;
      c)       assets including cash received by an entity, in exchange for shares or capital contribution;
      d)      consideration or remuneration in the form of benefits in kinds in respect of employment or services received or accrued from a Taxpayer or the Government, except given by a non Taxpayer, Taxpayer which is imposed by final tax or Taxpayer using deemed profit;
      e)      payments by an insurance company to an individual in connection with health, accident, life or education insurance;
      f)       dividends or distribution of profit received by or accrued by a resident limited corporation, cooperative, state-owned enterprises, or local government-owned enterprises through ownership in enterprise established and domiciled in Indonesia, provided that:
      1. dividends are paid out from retained earnings;
      2. limited corporations and state-owned enterprises and local-owned enterprises receiving the dividends must own at least 25% of the total paid-in capital;
      g)      contributions received or accrued by a pension fund which its establishment is approved by the Minister of Finance, either paid by an employer or an employee;
      h)      income from a capital investment of the pension fund  in certain sectors as determined by the Minister of Finance Decree;
      i)        distribution of profit received or accrued by a member of a limited partnership, whose capital does not consists of shares, partnership, association, firma, and kongsi, including a unit holder of collective investment contract;
      j)        income received or accrued by a venture-capital company in the form of profit distribution of a joint-venture company established and conducting business or engage in activities in Indonesia, provided that:
      1. the investee is a micro, small, medium-sized enterprise, or engaged in activities in business sectors stipulated by or based on the Minister of Finance Regulation; and
      2. the investee’s shares are not traded in the stock exchange in Indonesia;
      k)      scholarships that fulfill certain requirements which are stipulated by or based on the Minister of Finance Regulation;
      l)        a surplus received or accrued by an institution or a non-profit organization engaged in education and /or research and development, which has been listed in corresponding institutions, which is reinvested in the forms of infrastructures of education and / or research and development, within no more than 4 (four)years period of time since it is received or accrued, as stipulated by or based on the Minister of Finance Regulation.
      m)    aid or donation paid by The Social Security Agency to a certain Taxpayer, as stipulated by or based on the Minister of Finance Regulation.
      Resident Taxpayers and permanent establishments are entitled to claim the deductions in the form of expenses to earn, to collect and secure income from their gross income, including:
      a)      costs which are directly or indirectly related to business, among others:
      §  costs of materials;
      §  costs in relation with employment or services including wages, salaries, honoraria, bonuses, gratuities and remuneration in the form of money;
      §  interest, rents and royalties;
      §  travel expenses;
      §  waste processing expenses;
      §  insurance premiums;
      §  advertisement and selling expenses as stipulated by or based on the Minister of Finance Regulation administrative expenses;
      §  taxes other than income tax;
      b)      depreciation of tangible asset and amortization of rights and other expenditures which have useful life of more than 1 (one) year;
      c)       contributions to a pension fund which its establishment is approved by the Minister of Finance;
      d)      losses incurred from the sale or transfer of properties owned and used in business or used for the purpose of earning, collecting and securing income;
      e)      losses from foreign exchange;
      f)       costs related to research and development carried out in Indonesia;
      g)      scholarships, apprenticeships and training expenses;
      h)      debts which are actually uncollectible, provided that:
      §  it has been expensed in commercial profit and loss statement;
      §  the Taxpayer shall submit the list of bad debts to the Directorate General of Taxes;
      §  the case has been filed to court or government agencies which handle state’s receivables or there is a written agreement on the discharge of indebtedness between the debtor and creditor; or it has been published in media; or there is creditor’s which states certain amount of bad debts have been written off;
      §  the requirement stated above does not apply for small debtors gains from the discharge of indebtedness up to a certain amount stipulated by Government Regulation. The procedure of which shall be stipulated by or based on Minister of Finance Regulation.
      i)        donation for national disaster which is stipulated by a Government Regulation;
      j)        donation for research and development conducted in Indonesia which is stipulated by a Government Regulation.
      k)      costs of social infrastructure development which is stipulated by a Government Regulation;
      l)        donation in the form of education facilities which is stipulated by a Government Regulation;
      m)    donation for sport enhancement which is stipulated by a Government Regulation.
      The loss incurred, after subtracting the deductions from gross income, shall be carried forward for a maximum of five successive years. An individual who is a resident Taxpayer is entitled to claim personal exemptions. The amount of personal exemptions is as follows;
      a)      Rp15.840.000,00 (fifteen million eight hundred and forty thousand rupiah) for an individual Taxpayer;
      b)      additional Rp1.320.000,00 (one million three hundred and twenty thousand rupiah) for a married Taxpayer;
      c)       additional Rp15.840.000,00 (fifteen million eight hundred and forty thousand rupiah) for married Taxpayers’ spouse provided they file a joint tax return as referred to in paragraph (1) of article 8;
      d)      additional Rp1.320.000,00 (one million three hundred and twenty thousand rupiah) for each dependent family member related by blood and by marriage in a direct lineage, and an adopted child with a maximum of three dependents;
      The application above is based on the facts and circumstances at the beginning of a taxable year or fraction of a taxable year. After The Minister of Finance consultation with the House of Representatives, shall stipulate the adjustment of personal exemptions.
      If there is a transfer or withdrawal of asset or a withdrawal of asset for other reasons, then the remaining book value of the asset shall be deducted as a loss and the selling price or insurance payment received or accrued shall be treated as income in the year the asset is withdrawn. If the insurance payment can only be identified at a later date, then subject to the approval of the Director General of Taxes the amount of the loss shall be deducted at a later date. If there is a transfer of tangible assets, then the remaining book value of the asset may not be treated as a loss by the transferor.
      Income or Losses of a Married Women
      Income or losses of a married woman at the beginning of a taxable year or fraction of a taxable year, including loss originating from previous years that have not been offset, shall be deemed as income or loss of her husband, except where the income is received or accrued exclusively from one employer and from which tax has been withheld and the employment is not related to the business or independent personal service of husband or any other relative.
      Income of a married individual shall be taxed separately if;
      a)      they live separately based on a court decision;
      b)      it is requested in writing by both the husband and wife on the basis of an agreement for the separation of property and income;
      c)       it is requested by the wife who chooses to meet her tax right and obligation separately.
      The net income of a married individual shall be taxed on aggregate net income of the married individual, and the amount of tax to be paid by each of them shall be in proportion to their respective net income. The income of a minor child shall be added up to the income of the parents.
      Depreciation with respect to cost of purchasing, erecting, expanding, improving, or replacing tangible assets, except land that bears ownership right, a right to build, a right to cultivate, and a right to use that is held for earning, collecting, and securing of income that has a useful life of more than one year, shall be calculated on a straight line basis over the useful life stipulated for the assets. Depreciation with respect to tangible assets, other than building, may also be calculated under the declining balance method over the useful life of the asset by applying the rate of depreciation to the book value, and at the end of the useful life the remaining of the book value shall be fully depreciated, provided that the method is adopted consistently. Depreciation shall commence in the month expenditures are incurred; except for the asset still in progress, the depreciation shall commence in the month when the process is completed. Subject to the approval of the Director General of Taxes, a Taxpayer may start to claim depreciation at the beginning of the month the asset is used to earn, to collect and to secure income or of the month the asset produces income. If a Taxpayer revalues the asset, then the basis of depreciation for the asset shall be the value resulting from the revaluation. For the purpose of calculating depreciation, the useful life and the rate of depreciation for tangible asset shall be as follows :
      Group of Tangible Assets
      Useful Life
      Rate of Depriciation Under
      Rate of Depriciation Under
      Paragraph (1)
      Paragraph (2)
       
      I.           Non Building Class :
       
      Group 1
      Group 2
      Group 3
      Group 4
       
      II.         Building Class :
       
      - Permanent
      - Non Permanent
       
       
       
      4 Years
      8 Years
      16 Years
      20 Years
       
       
       
       
       
      20 Years
      10 Years
       
       
       
      25%
      12,5%
      6,25%
      5%
       
       
       
       
       
      5%
      10%
       
       
       
      50%
      25%
      12,5%
      10%
       
       
       
       
       
       
       
       
       
      Amortization with respect to cost of acquiring intangible asset and other costs including cost of extending right to build, right to cultivates, right to use, and goodwill that has a useful life of more than one year which is used to earn, to collect and to secure income shall be calculated under straight line method or declining balance method by applying the amortization rate to the costs or the book value and at the end of the useful life the remaining of the book value shall be fully amortized provided that the method is adopted consistently. Amortization shall commenced in the month where the expenditures are incurred except for certain businesses which shall be stipulated by the Minister of Finance Regulation. For the purpose of calculating amortization, the useful life and the rate of amortization shall be as follows :
      Group of Intangible Assets
      Useful Life
      Rate of Amortization Under
      Straight Line Method
      Declining Balance Method
       
      Group 1
      Group 2
      Group 3
      Group 4
       
      4 Years
      8 Years
      16 Years
      20 Years
       
      25%
      12,5%
      6,25%
      5%
       
      50%
      25%
      12,5%
      10%
        
      Expenditures incurred prior to the establishment and the capital expansion of an entity shall be deducted in the year the expenditures are incurred or amortized. Amortization of expenditures to acquire rights and other expenditures that have a useful life of more than one year in oil and gas industry shall be calculated under the unit of production method. Amortization of expenditures to acquire mining rights, rights on forestry concession and rights on the exploitation of natural resources and other natural products that have a useful life of more than one year, shall be calculated using the unit of production method, up to a maximum of 20% (twenty percent) per year. Expenditures incurred prior to commercial operations, which have useful life of more than one year, shall be capitalized and amortized. In case of transfer of intangible asset or rights, the book value of the asset or the rights shall be deducted as a loss and the payment received shall be treated as income in the year the transfer occurred. In case of a transfer of intangible asset that complies with the conditions, the book value of such asset shall not be treated as a loss by the transferor.
      Deemed profit to determine net income shall be formulated and adjusted from time to time, and issued by the Director General of Taxes. An individual Taxpayer whose gross income of business activities or independent service in on year is less than Rp4.800.000.000,00 (four billion eight hundred million rupiah), may calculate his net income by applying the deemed profit, provided that it is communicated to the Director General of Taxes wihtin the first three months of the taxable year concerned. A Taxpayer who calculates net income using the deemed profit as referred to in, shall be obliged to keep records as referred to in the provisions of the Law on General Rules and Procedures of Taxation. A Taxpayer who fails to inform the Director General of Taxes to choose deemed profit is deemed to choose to keep books of account. A Taxpayer who is obliged to keep books of account or records, including a Taxpayer, but fails to keep or completely keep records or books of account, or fails to reveal records or books of account or supporting evidence, in such case the net income will be calculated using deemed profit and the gross income will be calculated in other basis as stipulated by or based on the Minister of Finance Regulation.
      Taxable income of a resident Taxpayer in a taxable year shall be income reduced by allowable deductions. Taxable income of Taxpayer shall be calculated by applying deemed profit as stipulated in that article, and in case of an individual Taxpayer, the amount as calculated by applying the deemed profit is deducted with personal. Taxable income of a non resident Taxpayer conducting business or engaged in activities through a permanent establishment in Indonesia in a taxable year, shall be income by allowable deductions. In case the tax obligation of an individual resident Taxpayer covers only a fraction of a taxable year, his taxable income is calculated by multiplying the net income therefrom with a fraction which would arrive at a full year net income.
      Tax Rate
      The tax rate applicable to each taxable income brackets is as follow :
      a)      Resident Individual Taxpayer
      Taxable Income Tax Brackets
      Tax Rate
      Rp 50.000.000,00 or less
      5%
      Over Rp 50.000.000,00 –
      Rp 250.000.000,00
      15%
      Over Rp 250.000.000,00 –
      Rp 500.000.000,00
      25%
      Over Rp 500.000.000,00
      30%
       
      b)      Tax rate applicable to entities as a resident Taxpayer and permanent establishment is 28% (twenty eight percent).
      The highest tax rate may be lowered but shall not be lower than 25% (twenty five percent) which is stipulated by the Government Regulation. The tax rate becomes 25% (twenty five percent) which applies starting from the tax year of 2010. Entity as a resident Taxpayer and public company whose at least 40% of their paid in capital are traded in the Indonesian stock exchange and meet other certain requirements can obtain a rate of 5% (five percent) lower than the tax, which is stipulated by or based on Government Regulation. Tax rate applicable to dividend received by an individual resident Taxpayer is a maximum of 10% (ten percent) and final in nature. For the purposes of the application of tax rates, the amount of taxable income shall be rounded down in thousands. Where an individual resident Taxpayer’s obligation covers only a fraction of a taxable year, his tax payable is calculated by the fraction of the number of days divided by 360 and multiplied by the amount of the tax payable for one full year. For the purpose of the calculation of tax payable, one month is deemed to be 30 (thirty)days. A special rate on income may be applied by virtue of the Government Regulation, provided that it does not exceed the highest marginal rate.
      PPh 21
      The following persons are obliged to withhold tax on remuneration in whatever form received or accrued by individual resident Taxpayer in respect of employment, services rendered, or any other similar activities:
      a)      an employer who pays salaries, wages, honoraria, allowances, and other similar remuneration in respect of an employment exercised either by permanent employees or non-permanent employees;
      b)      a government treasurer who pays salaries, wages, honoraria, allowances, and other similar remuneration in respect of an employment, services, and any other similar activities;
      c)       pension fund or other entity that pays pension and any other similar remuneration in whatever form in consideration of past employment;
      d)      an entity that pays honoraria or other similar remuneration in respect of services rendered, including professional services or any other activities of an independent character; and
      e)      a person who organizes an activity and pays remuneration in respect of services connected therewith.
      Notwithstanding the preceding provisions, a diplomatic agent and international organization are not obliged to withhold tax. An income to be withheld monthly derived by a permanent employee or a retired person shall be the amount of gross income after deducted by an official expenditure or pension expenditure determined by the Minister of Finance Regulation, pension contribution, and personal exemption. An income to be withheld derived by a daily wage earner, weekly wage earner, and other non permanent employee shall be the amount of gross income after deducted by a portion of income which is exempt from withholding tax as determined by the Minister of Finance Regulation. A rate applicable to income shall be the tax rate. The tax rate applicable for unregistered resident Taxpayer is 20% (twenty percent) higher than those registered resident Taxpayer.
      PPh 22
      The Minister of Finance may designate:
      1.       government treasurers to withhold tax in connection with payment for supply of goods;
      2.       certain entities to withhold tax from Taxpayer who conduct in import activities or other business activities; and
      3.       certain entities to withhold tax from Taxpayer who purchase very Luxurious Goods.
      Regulations governing the tax base for withholding purposes, the criterion, the characteristic and amount of withholding of taxes, shall be stipulated by or based on the Minister of Finance Regulation. Withholding tax rate for unregistered resident Taxpayer is 100% (one hundred percent) higher than those registered resident Taxpayer.
      Witholding Tax
      The following income, in whatever name and form, paid, apportioned to be paid, or on the due date of payment by a government institution, a resident taxable entity, a person who organizes an activity, a permanent establishment or a representative of any other non resident enterprises to a resident Taxpayer or permanent establishment, shall be subject to withholding tax of :
      a)      15% (fifteen percent) of the gross amount of:
      §  Dividends, in whatever name and form, including dividends from an insurance company to its policyholders, and distribution of net income by a cooperative;
      §  Interest, including premium, discounts, and compensation for loan repayment guarantees;
      §  royalties; and
      §  prizes and awards, bonus, and similar payments other than a person who organizes an activity and pays remuneration in respect of services connected therewith.
      b)      2% (two percent) of the gross amount of:
      §  rent and other income in connection with the use of property, except rent and other income in connection with the use of property of the following income may be subject to a final income tax:
                                                                                       i.            income in the form of interest from deposit and other savings, interest bonds and state bonds, interest paid by a cooperative to its individual members;
                                                                                     ii.            Income in the form of lottery prizes;
                                                                                    iii.            income from a transaction of shares and other securities, derivative transactions traded in exchange, and sales of share or transfer of capital contribution from its company partner received by a venture-capital company;
                                                                                   iv.            income from transfer of property such as land and/or building , construction services business, real estate business, and renting land and/or building; and other certain incomes;
      §  Compensation in connection with technical, management, construction, consultation and other services, except those following persons are obliged to withhold tax on remuneration in whatever form received or accrued by individual resident Taxpayer in respect of employment, services rendered, or any other similar activities:
      1.       an employer who pays salaries, wages, honoraria, allowances, and other similar remuneration in respect of an employment exercised either by permanent employees or non-permanent employees;
      2.       a government treasurer who pays salaries, wages, honoraria, allowances, and other similar remuneration in respect of an employment, services, and any other similar activities;
      3.       pension fund or other entity that pays pension and any other similar remuneration in whatever form in consideration of past employment;
      4.       an entity that pays honoraria or other similar remuneration in respect of services rendered, including professional services or any other activities of an independent character; and
      5.       a person who organizes an activity and pays remuneration in respect of services connected therewith.
      Notwithstanding the preceding provisions, a diplomatic agent and international organization are not obliged to withhold tax. An income to be withheld monthly derived by a permanent employee or a retired person shall be the amount of gross income after deducted by an official expenditure or pension expenditure determined by the Minister of Finance Regulation, pension contribution, and personal exemption. An income to be withheld derived by a daily wage earner, weekly wage earner, and other non permanent employee shall be the amount of gross income after deducted by a portion of income which is exempt from withholding tax as determined by the Minister of Finance Regulation.
      Withholding tax rate for unregistered resident Taxpayer is 100% (one hundred percent) higher than those registered resident Taxpayer. An individual who is a resident Taxpayer may be appointed by the Director General of Taxes as a withholding agent.
      Withholding tax shall not apply to:
      a)      income paid or owed to a bank;
      b)      lease payment in finance lease agreements;
      c)       dividends and dividends received by individual taxpayers;
      d)      distributed profit;
      e)      profit which is distributed by a cooperative to its members; and
      f)       income paid or payable to a financial service entity which serves as a loan intermediary and/or financing stipulated by the Minister of Finance Regulation.
      PPh 26
      The following income, in whatever name and form, paid, apportioned to be paid, or on the due date of payment by a government institution, resident taxable entity, a person who organizes activities , permanent establishment, or a representatives of a nonresident company to a non-resident Taxpayer other than a permanent establishment in Indonesia, shall be subject to withholding tax of 20% (twenty percent) of the gross income:
      1.       dividends;
      2.       interest including premium, discount. and compensation for loan repayment guarantees;
      3.       royalties, rent and other income in connection with the use of the property;
      4.       compensation in connection with services, works, and activities;
      5.       prizes and awards;
      6.       pension and other periodic payments;
      7.        premium of swap and other hedging transactions; and/or
      8.       gains from the discharge of indebtedness.
      The domicile country of the foreign taxpayer other than those who conducting business or performing business through a permanent establishment in Indonesia is the country or where the foreign taxpayer resides where he or she actually receives benefit from that income (beneficial owner). Gains from the sale or transfer of assets in Indonesia other than the following income may be subject to a final income tax:
      o   income in the form of interest from deposit and other savings, interest bonds and state bonds, interest paid by a cooperative to its individual members;
      o   Income in the form of lottery prizes;
      o   income from a transaction of shares and other securities, derivative transactions traded in exchange, and sales of share or transfer of capital contribution from its company partner received by a venture-capital company;
      o   income from transfer of property such as land and/or building , construction services business, real estate business, and renting land and/or building; and
      o   other certain incomes;, derived by a non-resident Taxpayer other than a permanent establishment in Indonesia, and insurance premiums paid to a foreign insurance company, shall be subject to withholding tax of 20% (twenty percent) on the deemed profit.
      Gains from the sale or transfer of shares, the sale or transfer of shares of a conduit company or special purpose company which is established or domiciled in tax haven countries and the conduit company or the special purpose company is the affiliation of an entity established or domiciled in Indonesia or a permanent establishment in Indonesia, could be deemed as the sale or transfer of shares of an entity that is established or domiciled in Indonesia or permanent establishment in Indonesia, is subject to withholding tax of 20% (twenty percent) of the estimated net income.
      The implementation of the regulations is stipulated by or based on the Minister of Finance Regulation. Taxable Income after deducted from income tax of a permanent establishment in Indonesia is subject to be taxed of 20% (twenty percent), unless the profit is re-invested in Indonesia, the further regulation is stipulated by or based on the Minister of Finance Regulation. The withholding tax is treated as final tax, unless:
      1.       The withholding tax on income; and
      2.       The withholding tax on income received or accrued by a non-resident individual or non-resident company that has changed its status into a resident taxpayer or a permanent establishment.
       
      a.       Value Added Tax / VAT (Law 42/2009)
      Value Added Tax shall be imposed to:
      1.       delivery of the Taxable Goods inside of the Customs Area of which is done by the entrepreneur;
      2.       import of the Taxable Goods;
      3.       utilization of the Taxable Services from outside of the Customs Area of which is done by the entrepreneur;
      4.       utilization of the Intangible Taxable Goods from outside of the Customs Area in the inside of Customs Area;
      5.       utilization of the Intangible Taxable Service from outside of the Customs Area in the inside of Customs Area;
      6.       export of the Tangible Taxable Goods by the Taxable Entrepreneur;
      7.       export of the Intangible Taxable Goods by the Taxable Entrepreneur; and
      8.       export of the Intangible Taxable Service by the Taxable Entrepreneur.
      Type of Goods that are subject to the Value Added Tax shall be certain goods within the group of goods as follow:
      1.       mining and drilling products of which are taken directly from their sources;
      2.       staple goods of which are mostly required by the people;
      3.       food and beverage of which are served in the hotel, restaurant, food shop, shop, or the similar is desired, including dine in and take out food, including food and beverage of which are presented by catering company; and
      4.       money, gold bullion, and securities.
      Type of services of which are not imposed the Value Added Tax shall be certain services within the group of service as follow:
      1.       medical services;
      2.       social services;
      3.       courier services with stamp;
      4.       financial services;
      5.       insurance services;
      6.       religious services;
      7.       education services;
      8.       art and entertainment services;
      9.       non advertisement broadcasting services;
      10.   land and water transportation services as well domestic air transport services of which is the integral part of the international air transport services;
      11.   employment services;
      12.   hospitality services;
      13.   services of which are provided by the Government in the framework of the implementation of general administration;
      14.   parking services;
      15.   public telephone service that uses coins;
      16.   remittance service by postal money order; and
      17.   catering services.
      In addition subject to the Value Added Tax, the Luxury Goods Selling Tax also subject to :
      1.       the delivery of Taxable Goods of which are categorized as luxury goods by the entrepreneur who produces such goods inside of the Customs Area of its business activity or work; and
      2.       import of the Taxable Goods of which is categorized as luxury goods.
      Luxury Goods Selling Tax shall only be imposed 1 (one) time at the delivery of such Luxury Taxable Goods by the entrepreneur who produces or at the import of such Luxury Taxable Goods.
      Value Added Tax or Value Added Tax and Luxury Goods Selling Tax on the returned Taxable Goods could be deducted from the payable Value Added Tax or Value Added Tax and Luxury Goods Selling Tax within Tax Period at which the Taxable Goods in question is returned. Value Added Tax of delivery of the cancelled Taxable Services, either overall or partial, could be deducted from the payable Value Added Tax within the Tax Period at which such cancellation is occurred.
      The tariff of Value Added Tax shall be 10 % (ten percent).  Tariff of Value Added Tax as much as 0 % (zero percent) shall be applied to:
      1.       export of the Tangible Taxable Goods;
      2.       export of the Intangible Taxable Goods; and
      3.       export of the Taxable Services.
      Tax tariff above could be changed at least 5% (five percent) and no more than 15% (fifteen percent) of which the change shall be set with Regulation of the Finance Minister.
      The tariff of Luxury Goods Selling Tax shall be stipulated at least 10% (ten percent) and not more than 200% (two hundred percent). Export of the Taxable Goods of which is categorized as Luxury Goods shall be subject to 10% (ten percent) tax.
      The payable Value Added Tax shall be calculated by multiplying the tariff as set forth in section 7 with the Tax Imposition Basis of which includes Selling Price, Replacement, Import Value, Export Value, or the other values.
      Input Tax within a Tax Period shall be credited with Output Tax within the same Tax Period. For the Taxable Entrepreneurs who have not produced so that they have not performed the delivery of tax payable, the Input Tax on the acquisition and/ or import of capital goods could be credited. The credited Input Tax should use the Tax Invoice of which meet the requirements as set forth in Article 13 section (5) and section (9), which is in the Tax Invoice should be included the description concerned with the delivery of Taxable Goods and/ or the delivery of Taxable Service of which at least includes:
      1.       name, address, Primary Number of Taxpayer of who deliver the Taxable Goods or the acceptor of Taxable Services;
      2.       name, address, Primary Number of Taxpayer of the buyer of Taxable Goods or the acceptor of Taxable Services;
      3.       type of goods or services, amount of Selling Price or Replacement, and discount;
      4.       Value Added Tax collected;
      5.       Luxury Goods Selling Tax collected;
      6.       code, serial, and Tax Invoice creation date; and
      7.       name and signature of the person who is responsible to sign the Tax Invoice.
      Tax Invoice should meet formal and material requirements.
      Taxable Entrepreneur who performs delivery  which is payable tax at the residence or the domicile or places at which the business activity is made or places other than residence or domicile and/ or places at which the business activity is made, shall be set with the Regulation of the Directorate General of Taxation.  Upon written notification from the Taxable Entrepreneur, the Directorate General of Taxation could establish 1 (one) or more place of payable tax. In case for import, payable tax shall be occurred at which the Taxable Goods are inserted and collected through the Directorate General of Customs. Individual or entity, who utilizes the Taxable Goods or Taxable Services from outside of the Customs Area in the inside of the Customs Area, shall be payable at the residence or domicile and/ or place of business activity.
      Taxable Entrepreneur shall be obliged to make Tax Invoice for each:
      1.       delivery of the Taxable Goods;
      2.       delivery of the Taxable Services;
      3.       export of the Intangible Taxable Goods; and/ or
      4.       export of the Taxable Services.
      It is excluded the Taxable Entrepreneur could make 1 (one) Tax Invoice of which includes all  delivery made to the buyer of Taxable Goods or the same acceptor of the Taxable Services during 1 (one) calendar month.
      Tax Invoice as set forth above should make:
      1.       at the delivery of the Taxable Goods and/ or at the delivery of the Taxable Services;
      2.       at the acceptance of payment in the event that the payment is occurred before the delivery of the Taxable Goods and/ or before the delivery of the Taxable Services;
      3.       at the acceptance of the installment payment in the event that there are partial delivery of work stages; or
      4.       at other occasion of which is set with or based on the Regulation of Finance Minister.
      Tax Invoice as set forth above, should be made at no more than end of the delivery month.
      In the Tax Invoice should be included the description concerned with the delivery of Taxable Goods and/ or the delivery of Taxable Service of which at least includes:
      1.       name, address, Primary Number of Taxpayer of who deliver the Taxable Goods or the acceptor of Taxable Services;
      2.       name, address, Primary Number of Taxpayer of the buyer of Taxable Goods or the acceptor of Taxable Services;
      3.       type of goods or services, amount of Selling Price or Replacement, and discount;
      4.       Value Added Tax collected;
      5.       Luxury Goods Selling Tax collected;
      6.       code, serial, and Tax Invoice creation date; and
      7.       name and signature of the person who is responsible to sign the Tax Invoice.
      Directorate General of Taxation could establish the certain document of which its capacity can be equated with the Tax Invoice. The payment of Value Added Tax by the Taxable Entrepreneur, should be performed at no more than the end of next month after end of Tax Period and before the Notification Letter of Tax Period is submitted. Notification Letter of Tax Period shall be submitted at no more than the end of next month after Tax Period ended.
      Payable tax is not collected partially or overall or excused from tax imposition either for temporary or permanently:
      1.       for the activity in certain area or certain places within the Customs Area;
      2.       for the delivery of certain Taxable Goods or the delivery of certain Taxable Services;
      3.       import of certain Taxable Goods;
      4.       for utilization of certain Intangible Taxable Goods from outside of the Customs Area in the inside of Customs Area; and
      5.       for utilization of certain Taxable Services from outside of the Customs Area in the inside of Customs Area.
      The delivery of Taxable Goods in the form of assets that based on its original purposes are not for sale by the Taxable Entrepreneur shall be subject to Value Added Tax, unless for the delivery of assets whose Input Tax could not be credited.
      Value Added Tax and Luxury Goods Selling Tax, which have been paid on the purchase of Taxable Goods of which takes out from the Customs Area by individual foreign passport, could be reclaimed. Value Added Tax and Luxury Goods Selling Tax that could be reclaimed as set forth in section (1) above should meet requirements as follow:
      1.       value of the Value Added Tax at least RP500.000, 00(five hundred thousand rupiah) and could be adjusted with the Government Regulation;
      2.       the purchase of Taxable Goods shall be made within 1 (one) month before the departure to abroad; and
      3.       Tax Invoice, except for column Primary Number of Taxpayer, address shall be filled with Passport number, and full address of the country issuing of the passport for the purchase to the individual foreign passport holder who does not has Primary Number of Taxpayer.
      The reclaim of Value Added Tax and Luxury Goods Selling Tax as set forth in section (1) above shall be made when the individual foreign passport holder leaves Indonesia and it is submitted to the Directorate General of Taxation through office of the Directorate General of Taxation in the airport of which is established by the Finance Minister. The document of which should be showed when reclaiming Value Added Tax and Luxury Goods Selling Tax shall be as follow:
      1.       passport;
      2.       boarding pass for the departure of the individual to the outside of Customs Area; and
      3.       Tax Invoice.
      Buyer of the Taxable Goods or the acceptor of Taxable Services shall be jointly and severally liable on the tax payment, as long as could not show the evidence that the tax has been paid.
      b.      Tax about Land or Building (Law 20/2000)
      Acquirement Tax Rights of Land and Building is tax that charged to acquirement the land and or building rights, hereinafter called tax.
      The acquirement rights of land and building is a deed or legal evet that result an acquired upon land and building rights by an individual or entity.
      Land or building rights is a rights upon land include the management rights, and also the building.
      The tax object is the acquirement of land and building rights. The acquirement of land and bulding rights includes :
      1.       Conveyancing because :
      a)      Trading
      b)      Exchange
      c)       Grants
      d)      Grants will
      e)      Inheritance
      f)       Income of a company or any other legal entity
      g)      Separation of rights that result a transition
      h)      Designation of buyer on tender/auction
      i)        Execution or implementation of judge decision that legally binding
      j)        Merger
      k)      Consolidation
      l)        Business expansion
      m)    Gifts
       
      2.       administration of new rights because :
      a)      continuation rights release
      b)      outside the continuation rights release
      Land rights is :
      1.       proprietary (ownership)
      2.       right to culltivate
      3.       building rights (broking)
      4.       use rights (right of property)
      5.       proprietary of apartment
      6.       management rights
      The tax object that is not charged by tax of acquirement land and building rights is a taxable object that is obtained by :
      1.       diplomatic delegation
      2.       a state for government implementation
      3.       representative of international organization
      4.       individual or legal entity
      The bases of taxation is the value of tax object acquirement, which are :
      1.       trading is a transaction price
      2.       exchange is market value
      3.       grants are market value
      4.       grants will is market value
      5.       inheritance is market value
      6.       company income is market value
      7.       separation of rights that result a transition is market value
      8.       rights transition because of execution or implementation judge decision that legally binding is market value
      9.       administration a new rights as a cuntinuation from rights release is market value
      10.   administration a new rights outside the release rights is market value
      11.   merger is market value
      12.   consolidation is market value
      13.   business expansion is market value
      14.   gifts are market value
      15.   designation of buyer on tender is transaction price on tender minutes.
      If the tax object acquirement value is unknown or lower than the value of sales tax object that used on property taxation on the year of the happening of acquirement, the taxation bases that be used is tax object property tax.
      If the sales tax object property tax value have not be appointed yet, the amount of the sales tax object property tax will be appointed by the Minister.
      c.       Stamp Duty (Law 13/1985)
       
      On a stamp duty is taxed for a documents, such as :
      1.       Agreement and any others contract that made as a verification about deed, fact or circumtances, or civil situation;
      2.       Notarial deed;
      3.       A letter that contain the amount of money, more than Rp 1.000.000,00
      4.       Marketable securities, that the amount is more than Rp 1.000.000,00
      5.       Shares, that the amount is more than Rp 1.000.000,00
      The stamp duty is taped intact on the document that subject to stamp duty. The stamp is taped on the signature place.
      When in debted stamp duty i determined the matters:
      1.       Document that being made by one party, is when the document be submitted;
      2.       Document that being made by more than one party, is when the document is finished;
      3.       Document that being made abroad, is when be used in Indonesia.
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
      d.      Import Duty Tax (Law 17/2006)
       
      Import is an activity of importing goods into customs area. Goods imported to customs area are treated as import goods and subject to import duty. Import goods are subject to inspection. The inspection includes document inspection and goods inspection. The inspection is conducted selectively. Transportation of certain goods is monitored in customs area.
       
      Fulfillment of customs liabilities is implemented at customs office or other similar places by using customs manifest. Custom manifest is conveyed to custom and axercise officer at customs office or othe similar places. For implementation and monitoring of fulfillment customs liabilities, customs zone, customes office, and customes monitoring post are designated. Designation of customs zone, customs office, and customs monitoring post is implemented by the minister. Customs manifest may be conveyed in written form or electronic data.
       
      Import goods transported by transportation vehicle, must be unloaded in costums zone or maybe unloaded in other place after securing approval of head customs office. Import goods transported by transportation vehicle, may be unloaded to other transportation vehicle on the sea and the goods must be brought to customs office through the designated land. For the transporter who already unloaded in costums zone or maybe unloaded in other place after securing approval of head customs office, but the volume of import goods unloaded is less than the one notified in customs manifest, and he/she can not evidence that it happens beyond his/her control, is subjected to payment of import duty on the shortage and is subjected to administrative sanction in form of monetary charge of at least Rp 25.000.000,00 and maximum Rp 250.000.000,00. The transporter who already unloaded in costums zone or maybe unloaded in other place after securing approval of head customs office, but the volume of import goods unloaded is more than the one notified in customs manifest, and he is not able to evidence that it happens beyond his/her control, is subjected to administrative sanction in form of monetary charge of at least Rp 25.000.000,00 and maximum Rp 250.000.000,00. Import goods temporarily waiting to be exited from customs zone, can be stored at temporary store place. In certain cases, import goods maybe stored at other places similar to temporary store place.