PT, CV, and Partnerships Can Still Utilise 0.5% Final Income Tax, Here Are the Requirements!

The government has officially revised the provisions for the 0.5% final income tax (PPh) for micro, small, and medium enterprises (MSMEs) through Government Regulation (PP) Number 20 of 202lar. Under this regulation, business entities such as limited liability companies (PT), limited partnerships (CV), and partnerships (Firma) can no longer utilise the 0.5% MSME final income tax scheme. This 0.5% tax rate on turnover of up to Rp 4.8 billion is now only applicable to individual taxpayers, sole proprietorships, and cooperatives.

‘Domestic taxpayers with certain gross turnover subject to final income tax as referred to in Article 56 paragraph (1) include individual taxpayers, corporate taxpayers in the form of sole proprietorships established by one person, and cooperatives,’ stated Article 57 number 1, as quoted from PP 20/2026 on Wednesday (3/6/2026).

As for CVs, Partnerships, PTs, and Village-Owned Enterprises (BUMDes) currently registered under the 0.5% rate, the government has provided a transition period through transitional provisions. According to Article II letter e of PP 20/2026, PTs, CVs, and Partnerships registered before 22 April 2026 may continue to use the 0.5% rate for a specified duration, namely 3 years for PTs and 4 years for CVs.

Once the transition period concludes, these entities must switch to the normal tax scheme involving full bookkeeping with a 22% income tax rate. Furthermore, specifically for corporate taxpayers in the form of cooperatives, the period for utilising the MSME final income tax is limited to a maximum of four years.

‘Corporate taxpayers in the form of cooperatives as referred to in paragraph (1) letter b that have exceeded the period of 4 tax years since the registration of the relevant taxpayer,’ reads Article 57 paragraph (2) of PP 20/2026.