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)