The Minister of Finance has released a new regulation of tax on land and/or building and tax on sale and purchase agreement of land and/or building.
The regulation covers tax rates for taxpayers who divert their rights on land or building, how to submit the tax, and information on those who are excluded from the obligation (Check the new regulation here).
Under the Minister of Finance Regulation Number 261/PMK.03/2016, the government imposes three types of income tax, related to objects.
First, the government imposes zero percent income tax of rights diversion on land and/or building to the government, state-owned enterprises which are assigned by the government, or provincial government-owned enterprises which hold assignments from their governors.
Second, taxpayers have to pay 1 percent of the rights diversion on land and/or building for modest houses and modest flats. The taxpayers in this clause are those who run business mostly in diverting rights on land and/or building.
Third, the government levies 2.5 percent income tax of net values for any rights diversion of land and/or building which are not stated in the previous clauses, under the 0 percent or 1 percent income tax.
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Submitting the Obligations
Based on the regulation, taxpayers must submit the obligations by themselves or cannot be represented by other parties. However, the government offers two options in facilitating taxpayers when submitting their obligations.
First, taxpayers may deposit their liabilities to banks’ teller. Second, the government provides taxpayers with electronic system in banks to make the payment easier.
Yet, this latest regulation from the Ministry of Finance does not apply to all taxpayers. There are some exceptions made. Individuals whose incomes are under the level of non-taxable income (PTKP), with diversion net value less than IDR 60 million are excluded from the tax obligations.
Furthermore, social institution, religious foundations, and small and medium enterprises are also excluded from the obligations above.
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