Norma Pengitungan Penghasilan Neto – Norma Pengitungan Penghasilan Neto (NPPN) Pajak: Definition and Provisions , Individual taxpayers who run a business or independent work and corporate taxpayers are basically required to do bookkeeping. This bookkeeping is important to provide accurate and complete information about the taxpayer’s income needed to determine tax obligations fairly and reasonably in accordance with the taxpayer’s ability. However, not all taxpayers are able to do bookkeeping properly. Therefore, the government provides certain exemptions from the bookkeeping obligation.

Exemptions from Bookkeeping Obligation

This exemption applies to individual taxpayers running a business or independent work with an annual gross turnover of less than IDR4.8 billion. As a solution, the government has issued the Net Income Calculation Norm (NPPN) to facilitate the calculation of net income for the taxpayer concerned.

Definition of NPPN

NPPN is regulated in Article 14 paragraph (1) of the Income Tax Law and Article 1 point 6 of Minister of Finance Regulation (PMK) Number 54 of 2021, which regulates the procedures for recording and bookkeeping for tax purposes. NPPN is a guideline issued by the Directorate General of Taxes and continues to be refined to determine the amount of net income. NPPN is used when there is no better basis for calculation, such as complete bookkeeping.

However, not all parties can use the NPPN. The use of NPPN is only allowed for individual taxpayers with gross turnover of less than IDR4.8 billion. Such taxpayers must notify the use of NPPN to the Directorate General of Taxes within the first 3 months of the relevant tax year. If the taxpayer is newly registered, the notification must be made no later than 3 months after registration or the end of the tax year, whichever occurs first.

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Required to Record Gross Turnover

Taxpayers who use NPPN are still required to record their gross turnover. This recording aims to facilitate the application of NPPN in calculating net income. If taxpayers do not submit a notification of the use of NPPN within the specified time, then they are deemed to have chosen to conduct bookkeeping.

If in the audit it is found that a corporate or individual taxpayer who runs a business or independent work does not or does not fully conduct bookkeeping or is not willing to show supporting evidence, their net income will also be calculated using the NPPN.

NPPN Percentage by Region

The provisions regarding NPPN are also regulated in Director General of Taxes Regulation No. PER-17/PJ/2015. This regulation stipulates the percentage of NPPN based on region, which is categorised into:

Certain provincial capitals such as Pontianak, Makassar, Manado, Denpasar, Surabaya, Semarang, Bandung, Jakarta, Palembang, and Medan.
Other provincial capitals.
Other regions.

The list of NPPN percentage for individual and corporate taxpayers who do not fully organise bookkeeping or are not willing to show bookkeeping is listed in the appendices of PER-17/PJ/2015. If the taxpayer has more than one type of business or independent work, the calculation of net income is carried out for each type of business or independent work by taking into account the regional grouping.

It can be concluded that basically, NPPN is a guideline for determining the amount of net income issued by the Directorate General of Taxes and continues to be refined. The NPPN policy has the main objective of assisting taxpayers who are unable or incapable of organising bookkeeping to calculate net income. The use of NPPN is done if there is no better basis for calculation, namely complete bookkeeping, or if the bookkeeping or records of the taxpayer’s gross turnover are improperly organised. Further details regarding NPPN can be found in the Income Tax Law, MoF Regulation 54/2021, and PER-17/PJ/2015.

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