Guidelines for Salary Standards for Foreign Workers
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GOVERNMENT REGULATION /ANNOUNCEMENT
THE DIRECTOR GENERAL OF TAXATION
a. that the guidelines for standard of salary for foreign workers as stated in the Circular of the Director General of Taxation no. SE-25/PJ.43/1993 dated October 7, 1993 (State Gazette no. 5479 p. 13B-14B), no longer represents the actual salary conditions of foreign workers today;
b. That based on considerations as intended in section a above, it is necessary to stipulate a decision of the Director General of Taxation on Guidelines for Salary Standards for Foreign Workers;
In view of:
1. Law no. 6 of 1983 (State Gazette no. 3994 p. 1B-20B and forward), on General Rule and Application of Taxation (LN RI of 1983 no. 49, TLN RO No. 3262) as already amended by Law No. 16 of 2000 (State Gazette no. 6503 p. 1B-9B and forward) (LN RI of 2000 No. 126, TLN RI No. 3984);
2. Law no. 7 of 1983 (State Gazette no. 3995 p. 1B-31B and forward) on Income Tax (LN RI of 1983 no. 50, TLN RO No. 3263) as already amended by Law No. 17 of 2000 (State Gazette no. 6506 p. 1B-7B and forward) (LN RI of 2000 No. 127, TLN RI No. 3985);
3. Decree of the Minister of Finance, No. KMK-545/KMK.04/2000 (State Gazette no. 6569 p. 2B-5B) on Tax Inspection Procedures;
4. The Decision of the Director General of Taxation No. KEP-545/PJ/2000 (State Gazette no. 6577 p. 1B-6B) on Implementing Instructions with regard to Withholding, Depositing, and Reporting of Article 21 and Article 26 Income Tax, in connection with the Employment, Services and Activities Performed by Individuals;
Referred to as salary standards for foreign workers in this Decision of the Director General of Taxation, is the amount of gross income for 1 (one) month, in relation with the work, in the form of salary and other wages, that are received by foreign workers that work in industries other than oil and natural gas exploration.
The Guidelines for Salary Standards for foreign workers, as stated in the Attachment of the Decision of the Director General of Taxation is to be used for:
a. If there is an indication that the Taxpayer's Bookkeeping is not correct so that the amount of payable tax could not be calculated
b. If there is a proof that demonstrates a payment for a foreign worker’s salary that is not entirely entered for the payment of Article 21 or Article 26 Income Tax;
c. The inspector does not have the data to determine the amount of a foreign worker’s salary, in order to determine the amount of the obliged Article 21 or Article 26 Income Tax;
The use of the guidelines for salary standards for foreign workers as intended in Article 2 shall consider:
a. The nationality of the stated foreign worker;
b. The type of business of the company which the foreign worker receives his/her remuneration from (the employer);
c. The position or title of the foreign worker in the company he/she works for.
At the time when this Decision of the Director General of Taxation begins to take effect, the Circular of the Director General of Taxation No. SE-25/PJ.43/1993 dated October 7, 1993 on the Guidelines for Standard of Salary/Wages of Foreign Workers shall be declared null and void.
This Decision of the Director General of Taxation shall begin to take effect on January 1, 2002, and will be used for tax year 2002.
For public cognizance, this Decision of the Director General of Taxation
shall be published by placing it in the State Gazette of the Republic
Stipulated in Jakarta on April 3, 2002
THE DIRECTOR GENERAL
- signed –
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