Taxpayer Registration Guide: PMK 81/2024

The government has updated several aspects of the taxpayer (WP) registration process. These changes are outlined in Minister of Finance Regulation (PMK) Number 81 of 2024, aiming to align with the Coretax system.

As a result, this regulation revises provisions previously stipulated in PMK Number 147/PMK.03/2017, which covered the procedures for the registration and deletion of Taxpayer Identification Numbers (TIN), as well as the registration and revocation of VAT-Registered Person (PKP) status.

Read: Government Releases PMK 81/2024 on Coretax, 42 Old Regulations Revoked

In general, several provisions have been amended, clarified, or retained as they were. Some of the key changes include:

1. Criteria for taxpayer registration locations
2. The format of the Taxpayer Identification Number (TIN)
3. Additional criteria for individuals who are not required but may voluntarily register for a TIN
4. Provisions for updating taxpayer information
5. Change in terminology from "Non-Effective Taxpayer" to "Inactive Taxpayer"
6. Regulations regarding SPLN
7. Provisions for TIN deletion

Aside from aligning with the launch of the Coretax system, these changes also address considerations in business processes, information technology, and database management.

Criteria for Registration Location

Similar to the previous regulation, PMK 81/2024 emphasizes that every individual or entity meeting the requirements must register as a taxpayer (WP) at the Tax Office (KPP).

In the latest regulation, the criteria for the KPP region for determining WP have been revised. The requirement for the location of business activities is no longer applicable. This means the registration or official assignment location has also changed.

As a result, taxpayer registration is now carried out at the KPP located at the taxpayer's residence or domicile.

Changes to TIN Format

The provisions regarding the NPWP format reaffirm the rules in other tax regulations, such as the Tax Harmonization Law (HPP) and PMK Number 112/PMK.03/2022 jo PMK 136 of 2023.

For individual resident taxpayers, the TIN format now uses the Population Identity Number (NIK). Meanwhile, non-resident individual taxpayers, corporate taxpayers, and government institutions are issued a 16-digit TIN, while branches use the Identity Number of Place of Business Activities (NITKU).

TIN for Those Who Do Not Meet Objective/Subjective Requirements

Under PMK 81/2024, the Directorate General of Taxes (DGT) can issue TINs for individuals who do not meet objective requirements, such as having an income below the Non-Taxable Income threshold (PTKP), or subjective requirements, such as non-residency.

Individuals who do not meet objective requirements can register to obtain a TIN at the KPP (Tax Office) with jurisdiction over their place of residence.

Meanwhile, individuals who do not meet subjective requirements can register to obtain a 16-digit TIN at the KPP designated by the Director General of Taxes.

Provisions for Taxpayer Data Updates

Regarding requests for taxpayer data updates, the new regulation sets a maximum timeframe of one business day for issuing decisions after the complete application is received.

This timeframe for decisions was previously regulated only under Director General of Taxes Regulation Number PER-04/PJ/2020, whereas it was not stipulated in PMK Number 147/PMK.03/2017.

Taxpayer data updates can be requested if the data or information in the tax administration system differs from the actual conditions.

Terminology Change: From Non-Effective Taxpayer to Inactive Taxpayer

Through PMK 81/2024, the government has changed the term "Non-Effective Taxpayer" to "Inactive Taxpayer." The designation of an inactive taxpayer can be made by the Head of the KPP (Tax Office) based on the taxpayer's request.

For Individual Taxpayers, the application for inactive status must meet several conditions, including:

• Engaging in business activities or independent work but no longer meeting objective requirements due to the cessation of the business or work.
• Not engaging in business or independent work and not meeting objective requirements, either because they have not earned income or their income is below the Non-Taxable Income threshold (PTKP).
• Indonesian citizens intending to become foreign tax subjects but not yet meeting the criteria as foreign tax subjects.
• Indonesian citizens who no longer fulfill subjective and objective requirements.
• Married women with their TIN who choose to consolidate their tax rights and obligations with their husband’s TIN.
• Meeting specific criteria determined by the Director General of Taxes.

For Corporate Taxpayers, the application for inactive status must meet the following conditions:

• Failing to fulfill subjective and objective requirements but still in the process or pending deletion of their TIN.
• Meeting specific criteria determined by the Director General of Taxes.

Provisions for SPLN

Regarding the designation of taxpayers as SPLN, PMK 81/2024 introduces several new provisions. First, the government has replaced the certificate of Indonesian citizenship as SPLN with an inactive taxpayer status letter.

If an individual who has been designated as an SPLN and granted inactive taxpayer status fails to meet the criteria, the DGT will revoke the decision. If the individual does not apply for SPLN status, the decision will also be revoked.

As a result, their status will revert to that of a domestic tax subject, and they will be taxed according to the applicable regulations.

Provisions for TIN Deletion

The provisions regarding TIN deletion have changed, particularly concerning the conditions under which a taxpayer’s TIN can be deleted.

Some conditions that were previously included for TIN deletion are no longer applicable. These include individual taxpayers who are directors, commissioners, shareholders (owners), or employees who initially had a TIN from the company. Still, their income is below the Non-Taxable Income threshold (PTKP). Additionally, women who are married and choose to separate their property, income, and TIN from their husbands, as well as married women who have a different TIN from their husbands but combine their tax rights and obligations with their husbands, are no longer eligible for TIN deletion.

In addition to removing these conditions, the government has clarified provisions for deleting TINs for individuals who leave Indonesia permanently, distinguishing between resident and non-resident taxpayers.

Other conditions for remaining unchanged for TIN deletion include individual taxpayers who have passed away and those who hold more than one TIN. (ASP/KEN)