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Small company and the Art 31E rate cut

PT kami omzet 20 miliar. Dapat fasilitas 31E?

The situation

Yes, if gross turnover is up to IDR 50 billion. Profit linked to the first IDR 4.8 billion of turnover is taxed at half the rate, 11 percent.

The law

  • Art 31E, Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Resident companies with gross turnover up to IDR 50 billion get a 50 percent rate cut on taxable income from the first IDR 4.8 billion of turnover
  • Art 17, Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Individual rates: 5 percent up to IDR 60 million, 15 percent to IDR 250 million, 25 percent to IDR 500 million, 30 percent to IDR 5 billion, 35 percent above; company rate 22 percent

What it means for you

Example: turnover IDR 20 billion and profit IDR 2 billion. Facility part 4.8/20 = 24 percent, so IDR 480 million at 11 percent = IDR 52.8 million; IDR 1.52 billion at 22 percent = IDR 334.4 million. Total IDR 387.2 million.

What to do

  1. Confirm turnover is up to IDR 50 billion.
  2. Compute the facility share.
  3. Apply both rates.
  4. Show the working in the return.

The cut does not apply to profit already taxed as final income.

We can do this for youCorporate annual income tax return (SPT Tahunan PPh Badan): fiscal adjustments, Art 31E, instalments and financial statements: IDR 7.500.000

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