Inheritance is a topic that is often discussed, especially when someone passes away and the heirs have to divide the property left behind.
Many people may ask, “Does inheritance carry a tax burden?” and “Is there any possibility of the inheritance being tax-free?”.
These things are important to understand so that heirs can plan and manage their inheritance wisely. So, what are the conditions for tax-free inheritance? Let’s take a look at the following explanation.
Inheritance is not a tax object
From a tax aspect, we can see that inheritance is not a tax object. Article 4 paragraph (3) of the Income Tax Law clearly regulates this.
When heirs receive inherited property, for example in the form of land or buildings, there is a transfer of rights from the testator to the heirs.
If we refer to the provisions in Government Regulation No. 34/2016, income arising from the transfer of land or building rights due to inheritance is still an object subject to final income tax. However, Article 6 of Government Regulation No. 34/2016 explains that income from the transfer of land or building rights due to inheritance does not need to pay final income tax. This exception applies if the taxpayer has a Certificate of Exemption (SKB).
SKB as a condition for tax-free inheritance
Yes, people who have inherited land and buildings can exempt themselves from taxes, but there are conditions. One of the requirements is to have an Income Tax Exemption Certificate (SKB).
Regulation of the Director General of Taxes Number 30/PJ/2009 explains the procedures for granting exemptions from the obligation to pay or collect income tax on income from the transfer of land and building rights.
The regulation exempts the payment or collection of income tax on income from land and building rights (PHTB), one of which is the transfer of land and building rights due to inheritance.
The public can apply for a Certificate of Income Tax Exemption on the transfer of PHTB in writing by visiting the registered Tax Office (KPP).
In this case, the person’s heirs can apply for an SKB on PHTB.
Article 4 states that the applicant must attach a Declaration of Inheritance Distribution which follows the format in accordance with Appendix IV which is inseparable from the Regulation of the Director General of Taxes. After receiving a complete application letter for Income Tax Exemption Certificate on income from PHTB, the Head of the Tax Office must provide a decision within a maximum period of 3 working days.
KH Contact
Getting an SKB and taking care of inheritance documents can be a complicated and time-consuming process. Therefore, utilizing digital notary services from Kontrak Hukum can be the right solution.
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