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Understanding the Gross Revenue of Corporate Taxpayers

Definition of Gross Circulation – Gross turnover is all income received from business activities before the deduction of expenses incurred by the company. The definition of taxation law and gross turnover of corporate taxpayers according to tax law can be divided into two parts:

  1. Total circulation based on Article 17 and Article 31E of Law No. 36 Year 2008 on Income Tax.
  1. In accordance with PP 23 Year 2018, income tax from businesses received or expected to be received by taxpayers with certain gross turnover.

PP 23/2018 targets certain corporate taxpayers whose annual turnover does not exceed IDR4.8 billion. The tax rate of PP 23/2018 is a final income tax rate of 0.5% for SMEs (small and medium enterprises). However, the Directorate General of Taxes (DGT) provides relief to corporate taxpayers with gross income above IDR4.8 billion who can utilize the income tax rate facility in PP 23/2018 with a limited validity period. The following is an explanation of the definition of gross sales based on the provisions of laws and regulations.

Based on Law 36/2008 Gross Turnover of Corporate Taxpayer

According to  Law  No.  23  Year  2008,  Gross  Turnover is all gross income received or obtained from business activities, including the acquisition, collection, and maintenance of income both inside and outside Indonesia before deducting acquisition costs. The income includes:

  1. Income is subject to final income tax.
  2. Income is subject to non-final income tax.
  3. Income that is exempt from income tax.
Based on GR 23/2018 Gross Revenue of Corporate Taxpayer

Based on Government Regulation No. 23/2018, total turnover is the income from a business, excluding:

  1. Income from services related to freelance work (mainly in the form of a resume or a company formed by several natural persons with specialized experience providing services similar to freelance work) for corporate taxpayers).
  1. Non-business income or non-business income/other income Income from business activities subject to final income tax in accordance with the provisions of laws and regulations in the field of taxation.
  1. Income received or receivable abroad.
  1. Income exempted from income tax that is not subject to income tax. To calculate corporate income tax, use gross turnover in accordance with PP 23/2018.

Here are the details:

  1. If the total turnover for the tax year does not exceed Rp4,800,000,000, then the calculation of Income Tax Article 25 for the tax period January to December of the following year is calculated as Income Tax Article 4
    Paragraph 2.
  1. If the gross turnover in the current tax year exceeds Rp4,800,000,000, then the calculation of corporate income tax for the following year refers to Articles 17 and 31E of Law 36/2008.

Source by Accounting & Tax Team

Disclaimer

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia are subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. For more Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.

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