In addition to individuals, corporate taxpayers or companies also have an obligation to report Annual Tax Return (SPT). This corporate Annual Tax Return is an income tax reporting letter that contains the amount of tax payable that must be paid to the state treasury. It serves as proof of accountability for its tax obligations to the state. In the Annual Tax Return, there is information related to business activities and tax administration. The information includes business or company financial statements, VAT and/or STLG activities, and income tax period. The deadline for corporate tax return reporting this year will be due on April 30, 2024. Through the 1771 SPT form, there are several steps that business actors must understand regarding the reporting of the Annual Corporate SPT. What are the provisions and procedures for reporting? Check out the explanation through the following article.
What is an annual corporate tax return?
Annual Corporate Tax Return is a letter used to report tax payments, tax objects and non-objects, assets and liabilities of the company in accordance with applicable tax laws and regulations. Unlike the Personal Annual Tax Return which has more than one form, the Corporate Annual Tax Return only has one type, namely the SPT 1771 form. Companies that use this SPT 1771 apply to business entities such as Limited Liability Companies (PT), Commanditer Venture (CV), Trade Enterprises (UD), organizations, foundations, and associations.
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The rules regarding the obligation to report the Annual Corporate Income Tax Return are regulated in Directorate General of Taxes Regulation No. PER-30/PJ/2017 on the Fourth Amendment to PER-34/PJ/2010.
Function of Annual Corporate Income Tax Return
The main function of the agency’s Annual Tax Return is to report all financial and taxation activities of the agency for one tax year. In addition, there are several other functions including:
Reporting Income
Business entities are required to submit information on the income earned during the tax year. This includes income from sales, services, investments, and other sources of income.
Reporting Expenses
The Annual Corporate Tax Return also includes information on various expenses incurred by the entity during the tax year. These expenses can include operating expenses, interest expenses, tax expenses, and so on.
Calculation of Profit or Loss
Annual corporate tax return contains a calculation of net profit or loss for one tax year. This profit or loss is calculated by subtracting total revenue from total expenses.
Calculation of Tax to be Paid
Based on net income, the corporate Annual Tax Return is used to calculate the amount of tax payable by the entity. Corporate tax is calculated based on the applicable tax rate.
Calculation of Residual Profit After Tax
After calculating the tax payable, the company’s Annual Tax Return may include the remaining profit after tax that can be used for various purposes, such as retained as reserves or distributed as dividends to shareholders.
Requirements for Reporting the Annual Corporate Income Tax Return
The reporting of this corporate Annual Tax Return is arguably more complex than the personal Annual Tax Return. Because there are many components that must be entered and filled in the attachment to the Annual Corporate Tax Return form. In addition, in reporting the annual corporate tax return, there are files, documents, and other things that must be prepared, including:
- For tax-paying, tax-withholding and/or tax-collecting, profit-oriented business entities:
- Company deed of establishment
- NPWP of company management
- Business and/or activity licenses issued by authorized agencies
- For not-for-profit business entities:
- TIN
- ID CARD
- For business entities that only have tax obligations as tax withholders and/or tax collectors (for example: Joint operation):
- Deed of establishment or cooperation agreement
- NPWP of each company member
- Business and/or activity licenses issued by authorized agencies
Furthermore, the general documents or files that must be prepared when filling out the annual corporate tax return are as follows:
- Annual Corporate Income Tax Return 1771.
- SPT Masa PPN, which includes all input and output Tax Invoices for the tax year.
- SPT Masa Article 21, from the beginning to the end of the tax year
- Proof of Income Tax Withholding Article 23, in one tax year
- Evidence of Income Tax Article 22 collection and Tax Payment Slip (SSP) Article 22 of import, in one tax year
- Proof of Income Tax Withholding Article 4 Paragraph 2, in one tax year. This file is required if you are a taxpayer with obligations under Government Regulation No. 46 Year 2013.
- Proof of Payment of Income Tax Article 25, in one tax year
- Proof of Payment for Tax Collection Letter (STP) of Income Tax Article 25, in one tax year
- Financial Statements, including financial statements audited by public accountants and supporting data (ledgers supporting financial statements, subsidiary ledgers supporting financial statements, company bank statements or savings, receipts and disbursements, archives of deeds of establishment or amendments and attachments to the Annual Income Tax Return).
How to Report Annual Corporate Income Tax Return?
After preparing all the files and other supporting documents that must be present when submitting the Annual Corporate Income Tax Return, here are the steps to report the Corporate Income Tax Return online:
- Log in to your e-Filling or e-SPT account on the DJP Online website.
- Click “e-Filing” or “e-SPT” then select “Create SPT”
- After that, several questions will appear. Answer these questions correctly so that the system can determine the appropriate type of tax return form. In this case, form 1771, as explained earlier.
- Then, fill out and complete the form provided. Answer some of the guiding questions that follow.
- Enter the verification code that was previously sent to your email address.
- Click “Submit SPT”. The Annual Corporate Income Tax Report is complete.
Sanctions for Not Reporting Annual Corporate Tax Return
Based on the regulations in the Law on General Provisions and Tax Procedures (UU KUP), corporate taxpayers who are late or do not report their annual tax return will be subject to sanctions in the form of fines to criminal sanctions. The amount of the fine for late reporting of the Annual Corporate Tax Return is IDR 1 million. Meanwhile, criminal sanctions for corporate taxpayers who deliberately do not report their Annual Tax Return in the form of imprisonment in accordance with Article 39 paragraph (1) of the KUP Law. The minimum imprisonment is 6 months and the maximum is 6 years for corporate taxpayers who deliberately do not report their Annual Tax Return.
In addition to imprisonment, a fine of at least 2 times the amount of tax payable that is not or underpaid will also be imposed. Or a maximum fine of 4 times the amount of tax payable that is not or underpaid.
Therefore, it is advisable to file the Annual Corporate Income Tax Return as soon as possible before the deadline or apply for an extension if needed to avoid late fees.
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READ ALSO: Annual Corporate Income Tax Return Reporting Deadline and How to Report It
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