GLOBAL PAYROLL MAGAZINE
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However, this benefit is not applicable on income received other than from employment and is valid only until tax year 2035. Eligibility: Employees qualify for this benefit, if all the following conditions stipulated in Article 50 of PP 12/2023 are satisfied: Receive income from certain employers. Reside in the territory of Nusantara. Possess a Taxpayer Identification Number (NPWP) registered with the Tax Office covering Nusantara. Employers must satisfy all the conditions outlined in Article 52 of PP 12/2023 to pass on the tax benefit to their employees: Reside, have a domicile or conduct business activities in Nusantara. Have an NPWP registered with the Tax Office covering Nusantara or a tax identity at the place of business in Nusantara. “With the eligibility criteria clearly defined, it is essential to understand the tax and social security implications related to this benefit.”
effective implementation of planned investment activities, ensuring a smooth setup process for businesses. Delving into the impact on payroll, significant benefits have been introduced to further enhance the attractiveness of Nusantara for businesses and their employees. The introduction of Government Regulation Number 12 Year 2023 (PP12/2023) brings forth the spatial blueprint for the formation of New Capital and a complete plan of action to foster business. The focal points of this plan are various incentives aimed at attracting businesses and employees to set up businesses and engage in work in the newly formed capital, with the Government-borne Article 21 facility having a profound impact on payroll management. This article delves into the specifics of this regulation and its far-reaching implications for payroll. Government-Borne Tax Facility The facility is provided in the form of payroll tax relief. As part of this facility, the final tax on an employee’s salary (Article 21 tax), deducted by an employer in accordance with the provisions in Article 21 of Law Number 7 Year 1983 regarding Income Tax and its amendments, is entirely borne by the Government subject to satisfaction of certain conditions outlined in this regulation. Both employers and employees must meet all these conditions collectively to avail the benefit.
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