Check Here! Business Classification for Taxpayers

For KH friends who will calculate their tax obligations, or will take advantage of tax incentives provided by the government, at least they must know about the Business Field Classification (KLU). So, what is meant by KLU? What are the categories, structure, and how to find out? Check the full explanation here!

Definition of Business Classification

KLU itself is a code created and issued by the Directorate General of Taxes (DGT) to classify taxpayers into the appropriate type of business entity. The Ministry of Investment itself defines KLU as a classification of Indonesian economic activities or activities that produce products, both goods and services. This classification is carried out to provide uniformity of concept, definition, and classification of business fields in economic development in Indonesia.

Business Classification Code Structure

To understand more about KLU, KH friends also need to know the writing structure. Writing the KLU code consists of a 5-digit code, namely:

Principal Group

This is a further explanation of the category. Each category is elaborated into one or more main categories according to the nature of each main category (maximum 5 main categories, except processing industry).Each main category consists of two digits as its code.

Goals

It is a further explanation of the main group. Classes consist of a three-digit number. The first two digits indicate the relevant underlying group, while the last digit indicates the economic activity of each group. Each principal group can be broken down into up to 9 groups.

Sub-group

It is a derivative of the main group. This sub-group is a further description of the group and consists of four digits, the first three digits are the related group, while the last one digit is the economic activity of the sub-group concerned.

Economic Activity Group

It is a group that is intended to further select activities that include a sub-group, into several more homogeneous activities.

Business Classification Categories

After knowing the structure of the tax KLU, then KH friends can find out what the tax KLU categories are. KLU is divided into several categories regulated in DGT Decree Number KEP-321/PJ/2012. As explained above, there are 21 categories of Business Field Classification consisting of:

Code A is for the Agriculture, Forestry and Fisheries Category.
Code B for Mining and Quarrying Category.
Code C for Processing Industry Category.
Code D is for the Electricity, Gas, Steam or Hot Water and Chilled Air Procurement Category.
Code E for Water Treatment, Wastewater Treatment, Waste Material Treatment and Recovery, and Remediation Activities categories.
Code F for Construction Category.
Code G for Category Wholesale and Retail Trade; Repair and Maintenance of Automobiles and Motorcycles.
Code H for Transportation and Warehousing Category.
Code I for Accommodation and Food and Drink Provision Category.
Code J for Information and Communication Category.
Code K for Finance and Insurance Activities Category.
Code L for Real Estate Category.
Code M for Professional, Scientific and Technical Services Category.
Code N for the Rental and Leasing Without Option Rights, Employment, Travel Agencies, and Other Business Support Categories.
Code O for the Government Administration, Defense and Compulsory Social Security Category.
Code P for Education Services Category.
Code Q for Human Health and Social Activities Category.
Code R for Arts, Entertainment and Recreation Category.
Code S for Other Services Activity Category.
Code T for Household Services as an Employer Category, Activities that Produce Goods and Services by Households Used to Meet Their Own Needs.
Code U for the Activities of International and Other Extra-International Bodies category.

How to know the business classification code

After knowing the various categories of business field classifications and their fields of business, then of course KH pals want to know which category your company or business falls into. To find out, KH friends can see a complete list of KLU codes attached in DGT Regulation Number PER-17/PJ/2-15. In addition, you can also see KLU in full through the Ministry of Investment or BKPM website, namely through the oss.go.id/ page.

Business Classification Function

In taxation activities, the KLU code must be filled in or written in the tax notification letter (SPT) form when filling in taxpayer data. The KLU code is used as a reference to calculate the amount of tax liability of a business entity or company. In addition, based on DGT Decree Number Kep-321/PJ/2012, there are several functions of KLU, namely:

KLU is used to organize the type of taxpayer business entity. For example, the Taxpayer Economic Activity Group data in the taxpayer master file and the Economic Activity Group in the Tax Return.
KLU is used as the basis for the preparation of Net Income Calculation Norms

Well, that’s an explanation of the Business Field Classification (KLU), code structure, and categories. As a businessman and taxpayer, of course KH friends need to know it for your business entity. Because, the KLU code can be used to make it easier for you to carry out taxation activities. In addition, this KLU can also be used to get tax incentives from the government.

KH Contact

Let’s make sure your Business Field Classification code immediately so that business operations are smoother and tax activities are easier! However, for those of you who are still not fully aware of the tax provisions and do not want to be complicated in taking care of tax calculations and reporting, as well as other tax service administration, you can immediately contact Kontrak Hukum. Kontrak Hukum provides business taxation services. You can visit the following page for more information https://kontrakhukum.com/perizinan-dan-perpajakan/ Immediately contact Kontrak Hukum through the following link Tanya KH, or send a Direct Message (DM) on our Instagram social media @kontrakhukum.