DGT Lowers Royalty Tax To 6 Percent, Here Are The Rules!

JAKARTA - The Directorate General of Taxes (DJP) provides convenience for taxpayers (WP) by reducing the effective tariff on income tax deductions (PPh) Article 23 on royalty income received by private taxpayers (WP OP) from 15 percent of the gross amount of royalties to 6 percent.

These provisions are to provide convenience and legal certainty for WP OP users of the Neto Income Calculation Norm (NPPN) who receive royalties.

"The reduction in effective rates as well as being a better service quickwin and reducing the cost of compliance of taxpayers because the taxpayer's Annual Notification Letter (SPT) is not always more payable," said the Director of Counseling, Services, and Public Relations of the Directorate General of Taxes at the Ministry of Finance, Dwi Astuti, quoting Antara.

The reduction in royalty tax effective rates is stipulated in the Regulation of the Director General of Taxes concerning Technical Guidelines for Procedures for Cutting, Depositing, and Reporting of Taxes Article 23 on Royalty Income Received by OP taxpayers who apply Income Tax Calculations Using NPPN.

He said the regulation regulates royalty income received or obtained by WP OP NPPN users, namely WP OP who carry out business activities or free work with a gross circulation in one year of less than Rp4.8 billion, subject to a Article 23 tax cut of 15 percent with a Article 23 tax cut of 40 percent of the total gross royalty income excluding value added tax (VAT).

In other words, the effective tariff for cutting PPh Article 23 on royalty income received by WP OP NPPN users is 6 percent of the total gross royalty or decreased from before, which was 15 percent.

In addition to reducing effective rates, said Dwi, the ease and legal certainty in the regulation is in the form of the possibility of not undergoing a restitutional examination of the Annual SPT which has tended to pay more.

Annual SPT with a higher pay status is entitled to receive a tax refund that has been paid (restitution), but must go through an examination mechanism in accordance with Article 17B of the General Provisions and Tax Procedures Law (UU KUP). The period of examination is 12 months longer.