Withholding Tax Is: Control, Tax Objects, And Characteristics

Illustration of tax calculations (Stevepb/Pixabay)

YOGYAKARTA Withholding tax is one of the tax collection systems implemented in Indonesia. The mechanism is to authorize third parties to determine the amount of tax owed by taxpayers.

Basically, tax obligations are the responsibility of each holder of the Taxpayer Basic Number (NPWP).

Tax obligations include a year-long calculation of income, payable tax calculations, tax payments, and tax reporting at the end of the year.

The presence of the withoutholding tax system makes it easier for tax obligations to be implemented, considering the role of third parties in calculating taxes and immediately withdrawing a number of taxes that should have been carried out by taxpayers themselves.

So, what is withholding tax? Check out the full information in the review below.

Withholding tax is a tax collection system in which the government gives the authority to those who pay income to cut taxes from income recipients and deposit them into the state treasury.

In other words, the withoutholding tax is a tax payment system carried out by third parties.

In the withoutholding tax system, the third party is neither the fiscus (tax apparatus) nor the taxpayer concerned. The third party in question is the company where taxpayers work.

For example, cutting employee salaries by companies, so that these employees no longer need to pay the tax to the tax office.

For proof of tax payments, it is usually issued proof of deductions or tax deposits (SSP).

The government has determined the types of taxes whose payments are made using the withholding tax method.

Here are some types of taxes that are objects of withholding tax, namely:

PPh Article 21 is income tax in the form of salary, wages, honorarium, allowances, and other payments.

PPh Reservoir Article 21 is a party that provides income to taxpayers of domestic individuals related to work. For example, a job-giving company that cuts employee salaries.

PPh Article 22 is an income tax imposed on certain agencies, both government and private, which carry out export, import, and re-import activities.

The collection of PPh Article 22 consists of government treasurers related to the distribution of goods, certain agencies related to income from import activities, as well as corporate taxpayers related to payments from buyers for luxury sales.

What is meant by PPh Article 23 is a tax cut sourced from domestic taxpayer income and a fixed form of business derived from capital utilization (dividents, interest, and royalties), services (hosts and service rewards), or the implementation of activities (gifts, awards, and bonuses) in addition to those deducted by Article 21.

PPh Article 4 Paragraph (2) is a tax cut from income with its own treatment which is regulated through government regulations and is final.

The types of taxable income referred to are deposito interest and other savings, income from stock transactions and other securities in the stock exchange, income from the transfer of assets in the form of land or buildings, construction business income, and income from discounts on State Treasury Letters.

PPh Article 26 is a tax deduction from the income of foreign taxpayers on income that does not come from carrying out business activities sourced from Indonesia.

Tax Withholding Characteristics

Withholding tax is a very effective tax collection system. This is because there is a real-time economic shift from income recipients to third parties.

This system is in accordance with the basic tax principle, namely the convenience of paying taxes (convention of payment) for income recipients.

The characteristics or characteristics of the withholding tax, namely:

This is information about withoutholding tax. From the explanation above, it can be concluded that withholding tax is a tax payment system carried out by third parties. Hopefully the review above can add insight to the loyal reader VOI.ID.