Finance and Taxation:

1. Tax Card NPWP

Foreigners working or engaging in business activities in Indonesia must fulfill the same tax obligations as tax residents, thus they are required to apply for a personal tax card. Without a tax card, foreigners are subject to higher taxes. Additionally, opening a personal or corporate account in local banks in Indonesia requires presenting a personal tax card.

2. Electronic Tax Number EFIN

EFIN is the Electronic Tax Activation Number, which is needed in Indonesia to apply for a tax bill number and to file taxes online. Before applying for EFIN, one must first obtain the original tax card. Colleagues from Shanhai Map can represent clients at the tax office to collect the tax card, and clients only need to sign an authorization letter.

Cancellation of Personal Tax CardThe cancellation of a personal tax card usually involves the following aspects:

1. Foreign citizens no longer residing in Indonesia: Foreign citizens who previously worked or lived in Indonesia and have now moved away no longer have tax obligations in Indonesia.

2. Taxpayer retirement: Taxpayers who have retired and no longer have taxable income.

3. Merging of tax cards for couples: According to tax regulations, legally married couples can choose to merge their tax cards and file taxes together. This means their tax obligations are combined, and they file and pay taxes jointly. Therefore, the wife's NPWP will be canceled to simplify tax processing and avoid duplicate filings, which may also bring tax benefits in certain cases.

4. Duplicate personal tax cards: Each taxpayer should only have one valid taxpayer identification number to avoid confusion and duplicate filings in tax processing. Duplicate tax cards may result from registration errors or multiple applications for tax cards.

5. Death of the taxpayer: After the taxpayer's death, their tax obligations need to be ceased to avoid unnecessary tax issues.

6. Taxpayer moving abroad: Taxpayers who permanently move abroad and no longer have tax obligations in Indonesia can apply to cancel their personal tax card (NPWP).

Application for Electronic Tax Number and Tax Account

1. Each company only needs to apply for one electronic tax number and tax system account.
2. The electronic tax number is the activation code for the tax system. The electronic tax number can be used to register in the tax system for online tax filing.
3. The tax system is the online system of the tax authority, which includes various tax options. On the tax website, one can file annual returns, check tax status, and pay taxes online.

Cancellation of Corporate Tax Card

1. Companies that have been dissolved or liquidated can apply for tax card cancellation, and the company must first cancel its articles of association and business registration certificate before proceeding with the tax card cancellation.

2. During the process of canceling the tax card, an audit by the tax authority is required, so the cancellation of the tax card may take a year or more.

3. Before applying for tax card cancellation, the following requirements must be met:

(1) The company has fulfilled all tax obligations, including monthly income tax, value-added tax, and annual income tax filings.

(2) The companyhas no tax arrears,such as late reporting and late payment penalties.

General Taxpayer Qualification Application & Cancellation

In Indonesia, general taxpayer qualification is referred to as "PKP". Here is a brief introduction to its basic information:

1. Application conditions:

1. Mandatory requirement: Businesses with an annual turnover of 4.8 billion Indonesian Rupiah (approximately 2.4 million RMB) must apply.
2. Voluntary application: Businesses with an annual turnover below 4.8 billion Indonesian Rupiah can also apply voluntarily, but the tax rules will change after application.

2. Advantages:

1. Eligible to issue value-added tax invoices and can deduct value-added tax, reducing the tax burden on the business.
2. It reflects the standardized operation of the business and a good tax mechanism, enhancing the company's image in government and business cooperation.

3. Disadvantages:

1. Increased tax amounts, with value-added tax payable on every transaction.
2. Stricter management requirements for tax payments and invoice issuance, with potential government fines for late submissions or errors.

The National Tax Authority stipulates that for companies already having general taxpayer qualifications in Indonesia, if they wish to cancel their general taxpayer qualifications, they must meet one of the following conditions:

1. Company turnover is below 4.8 billion Indonesian Rupiah (4.8M) / the company has no turnover.

2. Unclear business scope and location.

3. Abuse of general taxpayer qualifications.

4. Change of company domicile.

5. Centralized payment and deduction of value-added tax by the head office.

6. No longer meeting tax regulatory requirements.

Corporate Monthly Tax Filing Services

1. All companies registered in Indonesia must comply with Indonesian tax and accounting regulations. Generally, all companies registered in Indonesia must fulfill their tax obligations, such as applying for a tax card number (NPWP), withholding income tax in advance according to relevant regulations, paying value-added tax (for general taxpayer qualified businesses), and filing and paying corporate annual income tax (PPh badan).

2. Additionally, companies must adhere to the financial accounting standards issued by the Indonesian Institute of Accountants (IAI), namely "Pernyataan Standar Akuntansi Keuangan (PSAK)" or "Standar Akuntansi Keuangan untuk Entitas Tanpa Akuntansi Publik (SAK-ETAP)". Due to significant differences between these regulations and those of other countries, foreign-invested enterprises newly established in Indonesia often require professional consulting firms to assist in handling financial and tax matters.

3. Lack of understanding of Indonesian tax and accounting regulations may lead to the company being audited by the tax authority or facing fines. Common errors include:
a. Failure to pay and report withholding taxes as required.
b. Failure to timely declare monthly reporting obligations or declaring after the deadline.
c. Failure to pay and declare overseas value-added tax (PPN jasa luar negeri) as required.
d. Failure to submit financial statements in accordance with Indonesia's current tax and accounting regulations.
e. Failure to record inventory in real-time according to inventory record documents and not using inventory recording methods recognized in Indonesia (FIFO, weighted average method).

f. Failure to conduct tax verification in the preparation of financial statements, resulting in unreported tax liabilities.
g. Exemption from taxable amounts without providing a tax exemption certificate (SKB) in certain transactions.

4. The following are some deadlines for tax payments and declarations as stipulated by Indonesian regulations:
a. Payment of withholding tax must be made by the 10th of the following month, and declaration must be made by the 20th of the following month.
b. Payment of Article 25 income tax (PPh Pasal 25) must be made by the 15th of each month.
c. Payment and declaration of value-added tax (PPN) must be completed by the end of the following month. However, for overseas value-added tax (PPN JLN), payment must be made by the 15th of each month.

Corporate Annual Tax Declaration

1. According to Indonesian tax law, annual corporate financial statements and corporate income tax declarations must be submitted by April 30 at the latest after the end of the fiscal year.

2. Even if the company has just been established and has no transactions, an annual zero declaration is still required.

3. Newly established Indonesian companies may not be familiar with Indonesian tax law, and if the financial and tax personnel have not yet arrived, it is best to let a professional service company handle accounting and tax declaration work.

4. Scope of work for annual corporate declaration:

(1) Consolidate monthly income, cost of goods sold, fixed costs, asset depreciation, and other information.

(2) Summarize the income tax prepaid over the year as a deduction for annual corporate income tax.

(3) Make fiscal adjustments (based on costs recognized by the tax authority).

(4) Verify financial information discrepancies with clients and determine the company's profit and loss amount.

5. If the company's annual revenueexceeds 5 billion Indonesian Rupiah(equivalent to 22 million RMB), an annual report audit must be conducted, and an audit report issued by an accounting firm must be attached to the annual declaration.

6. If there are related transactions with affiliated companies, transfer pricing documentation (TP Doc) must be completed before the annual declaration.

Personal Annual Tax Declaration ServiceForeigners holding a personal tax card (NPWP) in Indonesia must complete their tax obligations every year.

Companies generally withhold salaries and taxes for employees and directors every month, but personal annual declarations need to be made by the individual.

Agency bookkeeping and tax declaration:

1. Required materials

(1) Bank statements

(2) Company tax card

(3) EFIN DJP account

2. Required time

About 5 working days.