Home Blog 5 Frequent Taxation Mistakes in Indonesia to Avoid Finance | Tax Reporting 5 Frequent Taxation Mistakes in Indonesia to Avoid InCorp Editorial Team 20 November 2018 4 minutes reading time Table of Contents 1. Filing Tax Return and Doing Tax Payment Late 2. Doing the Calculation Wrong 3. Forgetting the Tax Deductions 4. Mixing up Both Personal Tax and Business Tax 5. Using the Wrong Tax Filing Form Final Word When you are awaiting a tax refund in Indonesia, you definitely would want to receive it as soon as possible. The best way to assure this is to make sure that your tax refund in Indonesia is not delayed due to some frequent taxation mistakes. There are tonnes of mistakes for tax submission received by the Indonesian Tax Revenue every year. It might not only cause your refund to be delayed for a long period of time, but it will also cost you or your company in the form of monetary penalties. This year, do not let the common mistakes get the better of you. In this article, Cekindo has prepared a list of 5 taxation mistakes to avoid so that you can ensure that your tax return submission is error-free for every of your annual tax filing season. 1. Filing Tax Return and Doing Tax Payment Late This is definitely one of the biggest taxation mistakes of all time. Failing to fulfil tax filing and tax payment deadlines will cause severe tax penalty such as fine. There are different tax payment dates for different taxes in Indonesia. Most of the taxes are due for payment on the 10th of the following month. However, some taxes such as VAT should be paid at the end of the following month. As for tax filing deadlines, the deadline for an individual tax return is on 31st March and the deadline for company tax return must be submitted within 4 months after the end of the taxable year. Do not want to be late again? Download our handy Indonesian Tax Compliance Calendar 2019 for free. 2. Doing the Calculation Wrong According to the Tax Revenue in Indonesia, one of the most common tax mistakes includes doing the math calculation wrong. In order to avoid this pitfall, it is highly recommended for you to to take your time and enter all the correct data. You can also use an online software program to do the tax calculation, but the easiest and convenient way is to outsource your accounting by a professional agency. 3. Forgetting the Tax Deductions If you are unsure about a particular category for a tax deduction in Indonesia, it is recommended for you to read the prints of the instructions on the form carefully. Besides, you might want to check with your tax professional for certain tax deduction category. You might want to check: An Overview on Indonesia’s Tax Reporting and Planning 4. Mixing up Both Personal Tax and Business Tax If you mix up your personal and business taxes, no accurate record of funds exists for your tax calculations, which leads to further issues. In order to prevent this from happening, business owners are always advised to have a clear fund statement by separating their personal and business taxes and funds. Read also: Accounting and Tax Reporting in Indonesia: Deadlines, Warnings and Recommendations 5. Using the Wrong Tax Filing Form When you are filing your return, make sure you have clearly chosen the correct tax filing form as a wrong form (that also means wrong filing status) will cause your return to be rejected. You can obtain all these forms at your local tax offices (KPPs) or even download them online at Directorate General of Taxes (DGT) website. Cekindo can work with you and provide you with all necessary forms and documents with no hassles. Final Word Do yourself a favour and make sure that you are not one of those millions of taxpayers in Indonesia who commit the mistakes mentioned above. Your tax returns will be sent back even they consist of minor errors. Contact Cekindo, and we will make sure that your tax return application, as well as tax compliance in general, is hassle-free and legitimate. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions Should I submit tax reports if my company has been established but has no business activities? Yes, submitting monthly and annual tax reports is mandatory even if your company does not have any business activities, thus owing zero taxes. What taxes are involved? For employment, the company is subject to: Employee income tax article 21 VAT on both the service invoice and the salary invoice 2% recovery tax on salary invoice What are the deadlines for the annual tax return? The deadline for an individual tax return is 31 March. A corporate tax return must be lodged within four months after the end of the calendar year or taxable year. More information can be found here: 21 Must-Know Facts about Annual Tax Return in Indonesia. How is pricing determined for your finance, accounting, and tax services? To provide you with accurate pricing information for our finance, accounting, and tax services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the services may vary accordingly. For pricing details, please talk to our experts. Get in touch with us. 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