Procedure for Application and Reporting for Vocational Supertax Deduction Incentives

Entity taxpayers who wish to receive supertax deduction incentives for vocational activities must meet certain terms and conditions. The terms and conditions for obtaining the supertax deduction incentive have been described in the previous article.

If the terms and conditions have been met, the application for supertax deduction incentives can be submitted through the channels provided by the government. So, what is the procedure for applying supertax deduction incentives for vocational activities?

Provisions regarding the application of vocational supertax deduction incentives have been regulated in the Minister of Finance Regulation No. 128/PMK.010/2019 concerning Provision of Gross Income Reduction for the Implementation of Work Practice, Apprenticeship, and/or Learning Activities in the Context of Guiding and Developing Human Resources (HR) Based on Certain Competencies ( PMK 128/2019 ).

Based on Article 7 paragraph (1) PMK 128/2019, to obtain additional gross income reduction in the vocational activity supertax deduction incentive scheme, taxpayers must apply the online single submission (OSS) system.

Taxpayers submit notifications through the OSS system by attaching 2 documents cumulatively. The two documents in question are a valid fiscal certificate and a cooperation agreement.

For information, referring to Article 1 number 5 PMK 128/2019, a fiscal certificate can be understood as information regarding taxpayer compliance during a certain period to fulfill the requirements for obtaining services or in the context of implementing certain activities.

By Article 1 point 4 PMK 128/2019, the cooperation agreement is an agreement between taxpayers and vocational high schools, vocational aliyah madrasas, college diploma programs in vocational education, job training centers, or government agencies.

The government agencies include agencies in the central manpower sector, provincial governments, or district/city governments for individuals who are not bound by a working relationship with any party.

Cooperation agreements are made to organize apprenticeship and/or learning activities in the context of fostering and developing certain competency-based human resources.

The cooperation agreement document attached to the OSS contains at least 8 pieces of information. First, the number and date of the cooperation agreement. Second, the name and Taxpayer Identification Number (NPWP). Third, the types of competencies taught.

Fourth, the names of vocational high schools (SMK), colleges with diploma programs in vocational education, job training centers, and/or agencies that carry out government affairs in the field of manpower at the center, provincial governments, and district/city governments. Fifth is the effective date and validity period of the cooperation.

Sixth, the estimated number of participants for work practices and/or apprenticeships. Seventh, the estimated number of employees and/or other parties assigned to learning activities. Eighth, the estimated cost and year of expenditure for vocational activities.

The OSS system will provide a notification that informs about the acceptance or rejection of the vocational activity supertax deduction incentive application. If the requirements have been received completely and correctly, the OSS system will provide a notification stating that the taxpayer has met the criteria for obtaining the supertax deduction facility for vocational activities.

The submission of applications through OSS is carried out no later than before the work practice, apprenticeship, and/or learning activities begin.

However, if the OSS system does not work properly, the notification can be delivered directly to the director-general of taxes through the head of the regional office of the Directorate General of Taxes (DGT) where the taxpayer is registered.

This is by the provisions of Article 7 paragraph (4) PMK 128/2019. The notification letter to the DGT may conform to the format listed in Attachment C of PMK 128/2019.

Furthermore, taxpayers who obtain and take advantage of the supertax deduction incentive must submit a report on the costs of vocational activities to the director-general of taxes through the tax service office (KPP) where the taxpayer is registered. The obligation to report the use of incentives is regulated in Article 8 paragraph (1) of PMK 128/2019.

Submission of the report on the cost of vocational activities is carried out annually and submitted no later than the submission of the Annual Income Tax Return (PPh) for the company. As for how to make a report on the cost of vocational activities, you can follow the format listed in Attachment D of PMK 128/2019.

If the taxpayer does not submit a report on the cost of vocational activities or the report is submitted but does not meet the provisions, the KPP where the taxpayer is registered will issue a warning letter. After the warning letter is issued, the taxpayer is required to submit a vocational activity report no later than 14 days.

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