Understanding the Example of Foundation Tax Calculation: Complete Guide to Safe Financial Reporting from Fines

Illustration of an example of calculating foundation tax (freepik)

YOGYAKARTA - Managing a non-profit organization requires extra diligence, especially when preparing examples of foundation tax calculations to comply with the applicable regulations of the Directorate General of Taxes.

Transparency in financial statements is the key to the sustainability of the foundation. You must understand how to calculate tax liabilities properly to maintain the credibility of the institution in the eyes of donors and the government.

Dilansir VOI dari laman Binus University, berikut ini beberapa hal yang perlu Anda ketahui soal pajak dalam yayasan:

Why Do Foundations Still Have to Pay Taxes?

Based on Law of the Republic of Indonesia Number 28 of 2004, a foundation is a legal entity consisting of separate wealth to achieve social, religious, and humanitarian goals.

Although it has no members and is non-profit, the foundation is still an Income Tax Subject.

The government considers that any additional economic capacity received by the foundation must be reported.

Therefore, foundations are required to have an NPWP, maintain bookkeeping, and report the Annual Income Tax Return of the Agency like commercial companies.

Types of Taxes Attached to Foundations

Tidal is well known that the foundation has quite complex tax obligations, both as a taxpayer and as a tax payer for others, including:

Income tax Article 21: Deduction of tax on the salaries of managers, lecturers, or staff. Income tax Article 23: Deduction of tax on the use of services (such as consultant services) or rental of vehicles. Income tax Article 4 paragraph (2): Final tax on interest on deposits, rent of land or buildings, or construction services when building a building. Income tax Article 25: Installment tax that must be paid each month if there is an annual obligation.

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Tax Objects and Non-Tax Objects of Foundations

However, not all funds that enter the foundation's pocket are subject to tax. The following are the details:

Tax objects, including:

Income from business, activities, or services. Interest on deposits, bonds, and property rentals. Profits from the transfer of property (gifts/contributions).

Not Taxable Objects, including:

Assistance or donations from the Government. Zakat received by the zakat amil agency (BAZIS). Bequests received as long as there is no business or ownership relationship between the giver and the recipient.Gross Income Deduction Component

Then, to get the residual value, which will be calculated for tax purposes, the foundation can deduct gross income by operational costs, including:

Salary and honorarium for teaching staff or staff. Administrative costs, office stationery, and electricity or water. Research, development, and scholarship costs for poor students. Land and Building Tax (PBB) for campus or building. Example of Calculation of Education Foundation Tax

In order to be more understanding and clear, let's see the following simulation to understand the application of surplus:

Case Study

The "Non Klunting" Education Foundation has a total gross income in 2023 of Rp. 8,000,000,000. After deducting the allowable operating expenses, a surplus of Rp. 750,000,000 is obtained.

Scenario 1 (Tax Free)

If within 4 years (until 2027), all of the Rp750,000,000 fund is used to build a laboratory or library, then the remaining surplus is not due to the Corporate Income Tax.

Scenario 2 (Non-Sarpras Use)

However, if in 2024, Rp200,000,000 of the remaining more is used to purchase operational vehicles for administrators (not education sarpras), then the Rp200,000,000 fund must be subject to Corporate Income Tax in the 2023 tax year (making a correction to the tax return).

Scenario 3 (Expiration)

If after 4 years the remaining balance of more than Rp550,000,000 has not been used for the construction of sarpras, then the funds become the object of PPh Badan in the fifth tax year.

Thus, a foundation has a dual tax responsibility, namely reporting its own income and deducting the taxes of others.

So, for example, the calculation of foundation taxes, now with the proper management of surplus funds for the development of infrastructure, foundations can enjoy tax exemption facilities legally.