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Witholding Income-Tax Exemptions of BPJS Assets and the Procedures

 

indonesia-investments.com, Jakarta – The New Tax Exemption BPJS Regulation regulates
provisions on both types of Social Security, namely:

  1. BPJS Health (Kesehatan), where the main types of assets are divided into:
    • the direct assets; and
    • the assets of the Social Security Fund (DJS) for Health.
  2. BPJS Employment (Ketenagakerjaan), where the main types of assets are divided
    into:

    • the direct assets; and
    • DJS for Employment, which are further divided into work-accident insurance, life insurance, old-age security fund, and pension fund.

Under the New Regulation, only the assets of DJS Health and DJS Employment will be
available of witholding income-tax exemptions. The tax authorities will issue a special taxpayer
identification numbers (NPWP) to all BPJS institutions in order to implement the granting
of tax exemptions. This procedures aims to make the granting of withholding income tax
exemptions easier.

Reporting Procedures

In addition, the New Regulation regulates that the relevant BPJS institution needs to report
the exemptions of withholding income tax of any investment returns or fund growth deriving
from the assets of DJS for Health and DJS Employment to the local tax office. Reports
should be arranged in accordance with format stipulated under the Appendix of the New
Regulation. For the reporting period which runs from January to June, reports should be
submitted by the end of July. Whereas for the reporting period which runs from July to December,
reports should be submitted by the end of January.

The New Regulation has been in force since October 24, 2017.

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