Monthly withholding on vendors and non-residents: PPh 23, PPh 4(2) final and PPh 26 with unified slips

We decide which withholding applies to each payment, compute it, issue the unified slip (bukti potong unifikasi) in Coretax, apply treaty rates for foreign vendors with the DGT form, and pay and file on time.

IDR 1.500.000Monthly

For: Companies and some individuals who pay for services, rent, royalties, interest or dividends to residents (PPh 23 or 4(2)) or to non-residents (PPh 26).

What we need from you

Vendor invoices paid in the month
Base for withholding
Vendor NPWP or NIK
Without it PPh 23 is 100 percent higher
Rental contracts for land and buildings
10 percent final
Construction contracts and contractor certificate
Final rate depends on type and certification
Foreign vendor tax residence certificate (DGT form)
Treaty relief under PPh 26
Loan and royalty agreements
Interest and royalty withholding

What we discuss

Is the vendor resident or non-resident?
PPh 23 or 4(2) versus PPh 26
Is it rent of land or buildings, or other assets?
10 percent final versus 2 percent
Does the vendor use 0.5 percent final tax with a certificate?
Then you withhold 0.5 percent final instead
For foreign vendors, do they have a treaty form ready before payment?
Without it the full 20 percent applies
Who bears the tax: vendor or you (gross up)?
Changes the base

What we file

Classify each payment and compute
Service fee IDR 50,000,000 to a resident PT: PPh 23 at 2 percent = IDR 1,000,000; without NPWP IDR 2,000,000. Office rent IDR 120,000,000: PPh 4(2) at 10 percent = IDR 12,000,000
Create unified slips
Pay withholding
File SPT Masa PPh Unifikasi

What you get

Monthly withholding register
Slips sent to vendors
Filed return with receipt

The law

Art 23, Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Withholding of 15 percent on dividends, interest, royalties and prizes and 2 percent on rent (not land and buildings) and listed services; 100 percent higher without an NPWP Source
Art 4(2), Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Certain income bears final tax: land and building rent, construction services, MSME turnover and others set by government regulation Source
Art 26, Law 7/1983 on Income Tax (PPh Law), as last amended by Law 6/2023: Withholding of 20 percent on dividends, interest, royalties, service fees and other income paid to non-residents, subject to tax treaties Source
PP 34/2017 on final tax on land and building rent: Final tax of 10 percent of gross rent of land and buildings Source
PMK 81/2024 on tax provisions for implementing the Core Tax Administration System (Coretax): In force 1 January 2025; Coretax registration, returns, payment due dates aligned to the 15th of the following month, prepopulated returns and deposit balance Source

Questions people ask

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