Four Categories Exempt from Filing Annual Tax Returns

Jakarta – Every year, individuals, institutions, and business entities are required to report their taxes. Those meeting the criteria must file their annual tax returns through formal tax returns (SPT).

However, several groups of taxpayers are exempt from filing their tax returns. The exemption criteria follow up from Finance Ministry Regulation Number 81 of 2024 concerning Tax Provisions in the Implementation of the Core Tax Administration System (Coretax).

“The criteria for certain income tax taxpayers exempted from the obligation to file tax returns as referred to in Article 180 paragraph (2) are determined by the Director General of Taxes,” as quoted from Article 465 letter s PMK 81/2024.

Previously, this was regulated under PMK-147/PMK.03/2017 and the Regulation of the Director General of Taxes Number PER-04/PJ/2020. Rules concerning taxpayers in the Non-Effective (NE) category are not required to file annual tax returns.

Those in this category will not receive warning letters even if they do not file their SPT. The following are four NE categories:

• Taxpayers whose income drops below the Non-Taxable Income (PTKP) threshold

• Business owners who have ceased operations

• Workers who are no longer employed and have no income

• Retirees who no longer have income

In the Coretax era, the term NE has been replaced with Inactive Taxpayers. Inactive taxpayers are not required to file their SPT from the tax year they are designated as inactive.

The following criteria allow taxpayers to be designated as inactive, according to the DJP website:

Individual Taxpayers:

• Ceasing business or freelance work and no longer meeting objective requirements because they stopped business or freelance work

• Having no income or income below the non-taxable income threshold

• Indonesian nationals intending to become foreign tax subjects but not yet meeting the requirements

• Married women who choose to combine their tax obligations with their husbands

• Indonesian nationals with resident status who no longer meet subjective and objective requirements because they have become foreign tax subjects

• Other criteria determined by the Director General of Taxes

Corporate Taxpayers:

• Not meeting subjective and objective requirements, but NPWP (Tax Identification Number) termination has not been processed

• Meeting specific criteria determined by the Director General of Taxes

Government Agency Taxpayers:

• Not meeting requirements as tax collectors and/or tax assessors but NPWP termination has not been processed

• Meeting specific criteria determined by the Director General of Taxes

Application Steps:

• Log into your taxpayer account on the Coretax DJP system

• Access the My Portal > Status Change > Determination of Inactive Taxpayer menu

• Complete the application form and upload supporting documents (for example, for a wife combining with her husband’s NPWP, upload the husband’s ID card, wife’s ID card, and family card)

• Read and check the declaration section

• Click the Send button to submit the application

Once the application is submitted, the status can be monitored through My Portal > My Cases. Ensure that the “Case Flow” tab shows: “Case is being processed. No action can be taken at this time.”

The maximum processing time for this application is five working days after a complete application is received.