MANDATORY for corporate tax who wish to obtain a tax allowance must apply in advance through the channels provided by the government. The main application for tax allowance is submitted online (online) through the online single submission (OSS) system.
However, if the OSS is not yet available, the submission of a tax allowance application can be made offline. In this article, we will describe the procedure for applying for a tax allowance through OSS.
Provisions regarding the procedure for submitting a tax allowance facility through OSS are regulated in Government Regulation no. 78 of 2019 concerning Income Tax Facilities for Investment in Certain Business Fields and/or in Certain Regions ( PP 78/2019 ) and its derivatives rules.
The derivative rules in question are Minister of Finance Regulation No. 11/PMK.010/2020 concerning the Implementation of Government Regulation Number 78 of 2019 concerning Income Tax Facilities for Investment in Certain Business Fields and/or in Certain Regions stated Regulation of the Minister of Finance No. 96/PMK.010/2020 ( PMK 96/2020 ).
For information, referring to Article 1 number 5 PP 78/2019, OSS is a business license issued by the OSS institution for and on behalf of the minister, head of the institution, governor, or regent/mayor to business actors through an integrated electronic system.
Provisions regarding the procedure for applying for a tax allowance through OSS are contained in Article 6 of PMK 96/2020. At first, to get a tax allowance, corporate taxpayers need to fulfill two conditions.
First, corporate taxpayers must ensure that their business activities are included in certain business fields listed in Appendix I of PP 78/2019 or certain business fields and in certain areas as stated in Appendix II of PP 78/2019.
Second, corporate taxpayers must also meet the criteria and requirements to obtain a tax allowance as described in the previous article. The two provisions are carried out through the OSS system.
Through the OSS system, taxpayers will be notified about whether or not the terms and conditions for obtaining the tax allowance facility are met. If the taxpayer is declared to have fulfilled the terms and conditions referred to, he can continue the application for submitting a tax allowance online.
Furthermore, taxpayers must submit 2 documents through the OSS system. First, a digital copy of the shareholders’ fiscal certificates. What is meant by a fiscal certificate is information regarding taxpayer compliance during a certain period to meet the requirements for obtaining services or in the context of implementing certain activities.
The definition is by Article 1 point 2 of the Regulation of the Director-General of Taxes No. PER-03/PJ/2019 concerning Procedures for Providing Fiscal Certificates ( Perdirjen 3/2019 ). Second, a digital copy of the details of fixed assets in the investment value plan.
Applications that have been received in full are submitted through the OSS system to the minister of finance through the director-general of taxes as a proposal for the provision of tax allowance facilities. Furthermore, the OSS system sends a notification to the taxpayer that the application for PPh facilities is forwarded to the minister of finance.
By Article 6 paragraph (4) of PMK 96/2020, the application for the tax allowance facility must be submitted before the start of commercial production. Referring to Article 1 point 7 PMK 96/2020, commercial production is marked when the first time the products or services from the main business activities are sold or delivered or are used alone for further production processes.
As additional information, the application for tax allowance can be made simultaneously with registration to obtain a new business registration number or no later than one year after the issuance of a business license for new investment and/or expansion.
Thus the discussion on how to apply for a tax allowance through the OSS system. The next tax class article will discuss how to apply for a tax allowance online.