EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Select your location
Local sites
On 19 January 2024, the Directorate General of Taxation (“DGT”) released regulation PER - 2/PJ/2024 (“PER-2”). The regulation introduces new forms and procedures for the reporting of withholding tax on payments to individuals under Article 21 and Article 26 of the Income Tax Law (“WHT21/26”). PER-2 is effective from 1 January 2024 with some transition rules also applying. PER-2 revokes DGT regulation PER-14/PJ/2013. Some forms have been updated and a new form introduced as part of the mechanism update provided under PER-2. The changes to the forms are mainly to accommodate the change of WHT21 calculation based on the newly issued regulations, i.e. Government Regulation No.58/2023 and Minister of Finance Regulation No. 168/2023 (“PMK-168”), as well as the use of NIK as NPWP (i.e. the national ID number in lieu of tax ID number).
Newly introduced Form 1721-VIII
With the introduction of Form 1721-VIII, the requirement to provide withholding tax evidence to employees has now shifted to a monthly basis. This requirement applies for permanent employees, to whom employers are now required to provide Form 1721-VIII to each of the permanent employees with information of the gross income and the WHT21 of that employee each month.
Form 1721-VIII is required to be provided to the permanent employees by end of the month following the month of deduction with a transitional rule for the WHT21 for the month of January 2024, which can be provided by 31 March 2024 at the latest. Employers should review processes and systems in order to comply with the new requirements.
Download the pdf to read more.