Obligations Post Voluntary Disclosure Program

Ideatax, Jakarta -- The Voluntary Disclosure Program ended in mid-2022. Based on the official release from the Ministry of Finance, it was revealed that 247,918 taxpayers participated in VDP policies I and II, resulting in 308,059 issued Certificates (Kemenkeu, 2022).

Furthermore, the official release also indicated that the total Final Income Tax collected from the program amounted to IDR 61.01 trillion, consisting of IDR 32.91 trillion from the first policy and IDR 28.1 trillion from the second policy. The net asset value disclosed by taxpayers was IDR 596.36 trillion, comprising IDR 513.94 trillion from domestic declarations, IDR 60.07 trillion from foreign declarations, and IDR 22.35 trillion from investments in financial instruments (Kemenkeu, 2022).

Although the Voluntary Disclosure Program has ended, taxpayers are still required to fulfill certain obligations post the widely known "tax amnesty" phase two.

According to Article 21 of the Minister of Finance Regulation Number 196/PMK.03/2022 regarding the Implementation Procedure of Voluntary Disclosure Program for Taxpayers, taxpayers who have obtained VDP Certificates are required to maintain proper bookkeeping and record the disclosed net assets in the additional retained earnings in the balance sheet.

In addition, the regulation stipulates that the disclosed assets, whether tangible or intangible, cannot be depreciated or amortized for tax purposes.

Regarding the repatriation and investment obligations, the policy states that taxpayers who declared repatriation in VDP must carry out the repatriation and investment no later than September 30, 2022. Additionally, taxpayers are required to submit a report on the realization of repatriation annually through the djponline portal.

This report must be submitted to the Directorate General of Taxes (DJP) no later than the deadline for submitting the Annual Income Tax Return every year. As known, concerning repatriation, taxpayers are prohibited from transferring the repatriated assets out of Indonesia within a 5-year period. Therefore, taxpayers are obliged to submit annual realization reports. For reference, here are the ten countries of origin for foreign declarations and net asset repatriation:

Countries of Origin for Foreign Declarations and Net Asset Repatriation

No	Nama Negara	Peserta	Nilai Harta (trilliun rupiah)	Nilai PPh (miliar rupiah)
1	Singapura	7997	56.960	7.295
2	Virgin British Island	50	4.977	601
3	Hong Kong	432	3.580	440
4	Australia	1154	2.766	372
5	RRC	332	1.512	180
6	Malaysia	422	1.184	162
7	USA	399	1.272	160
8	India	141	417	59
9	Swiss	45	342	49
10	Inggris	120	357	42

Source: Kemenkeu, 2022

On the other hand, concerning the net asset investment obligation, the DJP stipulates that taxpayers who declared investment in VDP must invest the net assets in financial instruments in Indonesia no later than September 30, 2023. This investment should be made for at least five years from the time of investment.

If taxpayers declared repatriation or investment of assets in VDP but fail to fulfill the repatriation or investment obligations mentioned above, the net assets that fail to be repatriated or invested will be deemed as income subject to Final Income Tax in the 2022 tax year.

Therefore, in order to avoid late submission of realization reports, ensure timely investments, and comply with bookkeeping requirements, taxpayers who have participated in VDP are advised to promptly submit realization reports for repatriation and investment before the deadline for submitting the 2022 Annual Income Tax Return through the djponline channel and properly record the disclosed net assets from the Voluntary Disclosure Program and report them in the 2022 Annual Income Tax Return.

 

Related Regulations:

1. Law Number 7 of 2021 on the Harmonization of Tax Regulations.
2. Minister of Finance Regulation Number 196/PMK.03/2021 regarding the Implementation Procedure of Voluntary Disclosure Program for Taxpayers.