Income tax on foundations

Income tax on foundations

JAKARTA (JP): Social foundations are subject to income tax
only when their taxable gross incomes are larger than their
operation costs, Tax Director General Fuad Bawazier announced
yesterday.

"However, donations, grants and assistance received by social
foundations are not classified into taxable incomes," Fuad said
in a directive meant to clarify a circular on the same subject
issued a few weeks ago.

He added that social foundations' earnings, which were
previously subject to income tax at the fixed final rate, from
time deposits and current accounts are not classified as taxable
incomes.

The directive also lists the kinds of costs which are
deductible from the taxable incomes of social foundations engaged
in health and educational services.(04)