If you are in the business world, you already understand that business and taxes are inseparable. In essence, all business people must understand that if they already have a business, then they are also obliged to pay taxes to the state.
Yes, entrepreneurs who have run a business and meet the requirements are obliged to pay taxes to the state or are referred to as taxable entrepreneurs (PKP). In accordance with Law (UU) No. 42 of 2009, PKP is an entrepreneur or business actor who delivers taxable goods (BKP) and / or delivers taxable services (JKP).
These taxable persons do not include small entrepreneurs whose limits have been set, except for small entrepreneurs who file themselves as taxable entrepreneurs.
Thus, not all entrepreneurs are required to become PKP, except those who have fulfilled all the requirements. Then, what are the requirements to apply to become a PKP? And what are the benefits if a business becomes a PKP? Check out the full explanation here!
Requirements and Procedures for Filing for Taxable Person for VAT Purposes
As mentioned earlier, there are exceptions for PKP, namely small entrepreneurs whose limits have been set by a decree of the Minister of Finance. But there is no need to worry, because even small entrepreneurs can still apply and choose to become PKP. Small entrepreneurs who can apply for PKP are those who have a turnover limit of up to IDR 4.8 billion per year. In addition, make sure that you have submitted your income tax returns for the last two tax years and do not have any tax debts, unless you have received approval for installment or postponement of tax payments. Then, the application for confirmation as a PKP can be done by filling out the Taxable Entrepreneur Confirmation Form which can be downloaded on the tax.go.id page and completing several documents. Documents that must be completed include:
- Copy of ID card for Indonesian citizens
- Copy of Taxpayer Identification Number (NPWP)
- Copy of passport, copy of Limited Stay Permit Card (KITAS) or Permanent Stay Permit Card (KITAP) for foreigners
- A statement letter stamped in the name of the taxpayer containing details of the business activities carried out and the location of business activities
Inauguration Function of Taxable Person for VAT Purposes
PKP status has a function as an identification mark for entrepreneurs who carry out taxable goods / services transactions to be able to collect taxes. As a VAT collector, PKP has the following obligations:
- Collecting VAT and STLG payable.
- Depositing accrued VAT when the output tax is greater than the creditable input tax and depositing payable STLG.
- Reporting VAT and STLG that are still outstanding.
READ ALSO: Let’s Recognize What is PKP and its Benefits for Business Actors
By having the status of a Taxable Entrepreneur, the taxpayer also has the following rights:
- Crediting VAT In if the outgoing tax is less than the input tax.
- Can utilize tax incentive facilities such as a preliminary refund of VAT overpayments.
So, what are the benefits of becoming a taxable person?
After knowing the definition and requirements for filing for PKP, then you must be wondering, what are the benefits of becoming a PKP for business actors? In addition to having rights and obligations, of course there are also various benefits that business actors feel if they hold the status of PKP. What are they?
Legalized Business
By having PKP status, business actors can show that their business and industry management is good and legal. In addition, it also shows that the business has good tax compliance.
Credibility of the Established Business
PKP status will increase the credibility of the company and its value in the industry. This is because at least, PKP status will only be owned by businesses or industries that carry out their tax obligations in an orderly manner.
Big Business Cooperation Opportunities
In addition to legal business and credibility, the PKP status will also provide opportunities and rights for transactions with government treasurers and participating in auctions held by the government.
Improving Production Efficiency
By holding the status of PKP, economically the burden of production and investment in the BKP and JKP owned will be borne by the end consumer, so that the financial circulation is healthier.
Increase Revenue from VAT
The advantage of becoming a taxable entrepreneur can also increase VAT revenue optimally. Because the input tax can be credited, it can reduce the selling price of goods/services to be lower even though there has been no delivery of BKP/JKP.
How about KH Friend? With some of the benefits and rights that have been explained, it’s no wonder then that many business people want PKP status? This advantage can have an impact both in the short and long term. Provided that entrepreneurs with this status can really maintain tax compliance and carry out obligations properly.
KH Contact
Considering that the benefits felt can also have an impact both in the short and long term, there is no longer any reason to delay obtaining PKP, yes! Well, to take care of it, you can also use the services of Kontrak Hukum. We have been trusted since 2018 by thousands of companies as a partner to fulfill legal and tax needs at affordable and efficient prices, including the management of PKP.
READ ALSO: Let’s understand PKP and Non PKP and their differences here!
For service information, visit KH Services – PKP page. If you have questions about other business needs, you can also consult for free at Tanya KH or send a direct message (DM) to Instagram @kontrakhukum.
