Once a PT PMA has been established in Indonesia, its tax compliance process needs to be ready when the company begins receiving capital, paying expenses, hiring employees, purchasing goods or services, or generating revenue.
Establish the Company’s Tax Position After Incorporation
A newly established PT PMA needs to confirm its tax registration and access to the tax administration systems it needs. The company should then determine which taxes apply based on its activities, transactions, and tax status.
Setting up tax compliance for a new PT PMA? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com to discuss your requirements
Not every PT PMA will have the same obligations from the beginning. Withholding tax can arise from particular payments, while VAT obligations depend partly on whether the company is registered as a taxable entrepreneur (Pengusaha Kena Pajak or PKP). The company also needs to establish how its corporate income tax will be calculated, paid, and reported.
The company should assign responsibility for providing transaction information and supporting documents, calculating taxes, making payments, and filing returns.
Apply Tax Treatment from the Company’s First Transactions
Initial transactions can include shareholder capital contributions, operating expenses, employee costs, supplier payments, imported goods or services, cross-border payments, and customer revenue.
Payments to employees, service providers, landlords, overseas recipients, and other parties can have different withholding tax consequences. Purchases and sales can also affect VAT where the relevant VAT requirements apply.
Need accounting and tax processes to work together from the start? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
The tax process needs to connect with the company’s accounting after establishing a PT PMA. Accounting records provide the information used for tax calculations, while invoices, contracts, tax invoices, payment records, and other documents may be needed to support the tax treatment.
Where accounting and tax treatment differ, the difference needs to be identified when the company’s taxable income is calculated.
Establish the Ongoing Tax Compliance Process
Once the PT PMA begins operating, accounting and transaction data feed into its recurring tax compliance. The relevant taxes are calculated, payments are made where required, returns are filed, and reported amounts are reconciled with the company’s accounts.
Coretax is central to many Indonesian tax administration processes, including tax payments and periodic tax returns.
For the annual corporate income tax return, accounting profit may need to be adjusted where Indonesian tax treatment differs from the accounting treatment. Taxes already paid or credited during the year are then considered in determining the company’s annual tax position.
Tax Compliance After Establishing a PT PMA with MAP Resources Indonesia
MAP Resources Indonesia supports newly established foreign-owned companies in setting up and managing their Indonesian tax compliance. Contact us at info@mapresourcesindonesia.com to discuss tax compliance for your PT PMA.
