Final PPh of Land and/or Building Sale and Purchase Agreement

IN the practice of buying and selling land and/or buildings, a binding sale and purchase agreement (PPJB) is a common transaction. PPJB is carried out as an initial binding agreement before the parties concerned to make a deed of sale and purchase (AJB).

PPJB can be a strategy for the seller to earn income on land and/or buildings that have not been completed ( indent ) or other certain conditions. In the context of income tax (PPh), PPJB on land and/or buildings is the object of the final PPh.

This has been regulated in Article 4 paragraph (2) letter d of Law no. 36 of 2008 concerning Income Tax stated Law no. 7 of 2021 concerning Harmonization of Tax Regulations ( PPh Law stated UU HPP ). Further regulations regarding tariffs, tax bases (DPP), withholding parties, and other technical regulations are contained in PP 34/2016 and PMK 261/2016 .

Referring to Article 1 paragraph (3) PMK 261/2016, PPJB land and/or buildings can be understood as a sale and purchase agreement between the parties which can be in the form of a PPJB letter, unit order letter, down payment receipt, or other forms of agreement between the seller or the seller. intends to sell with the buyer or intends to buy land and/or buildings.

In the aspect of calculating the income tax payable, the taxpayer simply multiplies the income tax rate by the DPP. As regulated in Article 2 paragraph (1) of PP 34/2014, the description related to the final PPh rate on PPJB land and/or buildings can be seen in the following table.

Meanwhile, the DPP for this PPh object is written in Article 2 paragraph (3) of PP 34/2014. Based on these provisions, DPP on PPJB is the gross amount of the actual value received or obtained. However, if the PPJB is affected by a special relationship, the DPP is the gross amount of the value that should have been received or earned.

It should be noted that the income tax payable is calculated based on the amount of each payment, including advances, interest, levies, and other additional payments paid by the buyer in connection with the PPJB for the land and/or buildings.

Furthermore, in Article 5 paragraph (1) PMK 261/2016 it is regulated that PPh on PPJB must be deposited by the party who receives or earns income. The income tax payable must be deposited no later than the 15th of the following month.

In addition to having an obligation to deposit, parties who receive or earn income are also required to report their income in the Final Income Tax Return (SPT) Article 4 paragraph (2). SPT reporting period must be reported no later than 20 days after the end of the tax period in question.

However, not all parties who receive or earn income from PPJB are subject to final income tax. As regulated in Article 10 PMK 261/2016, 7 parties are exempt from the imposition of final PPh on PHTB.

First, individuals who earn below non-taxable income (PTKP) and make transfers with a gross amount of less than Rp. 60 million. The gross amount is not a broken-down amount.

Second, individuals who make transfers using grants to blood relatives in a straight line of one degree, religious bodies, educational bodies, social institutions including foundations, cooperatives, or individuals who run micro and small businesses. Grants can be made as long as there is no relationship with the business, ownership, or exploitation between the parties concerned.

Third, agencies that transfer by way of grants to religious bodies, educational bodies, and social institutions including foundations, cooperatives, or private individuals who run micro and small businesses. Grants can only be made if there is no relationship with the business, ownership, or exploitation between the parties concerned.

Fourth, transfer due to inheritance. Fifth is the agency that performs the transfer to merge, consolidate, or expand businesses using the book value. Sixth, an individual or entity that makes a transfer in the context of implementing a build-to-delivery agreement (BGS) or the use of state property in the form of land and/or buildings. Seventh is an individual or entity that is not a tax subject.

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