Who Are Taxpayers?

JAKARTA, DDTCNews - The term 'taxpayer' in the world of Indonesian taxation is a very popular term. For some people, however, the definition of a taxpayer may be interpreted differently from the definition under statutory provisions.

Most people define a taxpayer as a person who already has a Taxpayer Identification Number and is obliged to pay taxes. Therefore, before developing a further perception of taxpayers, it is better to understand the definition of taxpayers under statutory provisions.

Under Law Number 6 of 1983 concerning General Provisions and Tax Procedures as amended several times, last by amended by Law Number 28 of 2007, a Taxpayer refers to any individual or entity, comprising a taxpayer and a withholding agent having tax rights and obligations pursuant to statutory tax provisions.

Thus, Taxpayers are further elucidated in Law Number 7 of 1983 concerning Income Taxes as amended several times, last amended by Law Number 36 of 2008 (the Income Tax Law) as follows;

1. Individual Taxpayers:
   • Individual Taxpayers Who Earn Business Income
   • Individual Taxpayers Who Earn Income from Independent Personal Services
   • Individual Taxpayers Who Earn Income from Employment
2. Corporate Taxpayers:
   • Government-owned Entities (State-Owned Enterprises and Local-Owned Enterprises)
   • Privately-owned entities (Limited Liability Companies, Joint Ventures, Cooperatives, Institutions and Foundations)
3. Treasurer Taxpayers as withholding agents
   • Central Government Treasurers
   • Local Government Treasures

Pursuant to the provisions under the Income Tax Law, a Taxpayer refers to an individual or entity that fulfils (tatbestand) the definition of a tax subject and receives or accrues income constituting a taxable object. In other words, the two elements that must be fulfiled to constitute a Taxpayer are the Tax Subject and the Taxable Object.

The term tatbestand is derived from the German language which implies that the law requires a person to fulfil the conditions (tatbestand) specified in the statute.

From the above definition, it can be concluded that no rule states that a taxpayer is a person who already has a Taxpayer Identification Number and is obliged to pay taxes because the definition outlined in the above article states that a person that does not yet have a Taxpayer Identification Number may be categorised as a Taxpayer if the person actually has tax rights and tax obligations. (Amu)