A corporate taxpayer who wishes to obtain additional gross income reduction from research and development (R&D) activities must fulfill several obligations first.
The provisions regarding these obligations are regulated in the Minister of Finance Regulation No. 153/PMK.010/2020 concerning Provision of Gross Income Reductions for Certain Research and Development in Indonesia ( PMK 153/2020 ).
Initially, to take advantage of the additional burden of gross income reduction, corporate taxpayers are obliged to submit notifications and supporting evidence through the Online Single Submission (OSS) application. This is as regulated in Article 10 paragraph (1) of PMK 153/2020.
The supporting evidence in question shows that R&D activities have obtained intellectual property rights (HAKI) in the form of patents or plant variety protection rights (PVT) and/or have reached the commercialization stage to the Ministry of Research and Technology (Kemenristek).
Furthermore, the Ministry of Research and Technology will research the suitability between the proposal and the realization of R&D activities. The conformity research is carried out based on coordination between the Ministry of Research and Technology and other ministries and/or government agencies that handle fields related to the R&D theme of corporate taxpayers.
Referring to Article 10 paragraph (4) of PMK 153/2020, after the conformity research is carried out, the corporate taxpayer will receive the results of the conformity research. The results of conformity research can be in the form of two statements as follows.
When submitting a report on calculating the utilization of gross income reduction, corporate taxpayers may refer to the format of the letter for submitting a report on the utilization of income reduction as contained in Attachment to PMK 153/2020.
If the corporate taxpayer does not submit a report or submits a report but does not meet the provisions, the head of the tax service office (KPP) where the taxpayer is registered can issue a warning letter to the corporate taxpayer.
Referring to Article 10 paragraph (8) of PMK 153/2020, the warning letter in question is issued within a maximum period of 14 days after the warning letter is submitted.
If the corporate taxpayer does not submit a report on the calculation of the use of gross income reduction, the director-general of taxes may make additional corrections to the gross income reduction imposed by the taxpayer.
This is as regulated in Article 11 paragraph (2) of PMK 153/2020. In addition, additional corrections to gross income deductions can also be made if the taxpayer reports the amount and type of R&D costs incorrectly.