What is PKP: Definition, Benefits, and How to Register

Tax

What is PKP: Definition, Benefits, and How to Register

In the world of business and taxation in Indonesia, the term PKP or Taxable Entrepreneur may be familiar. However, do you really understand what PKP is? How does it benefit your business? And how do you register to become a PKP? This article will answer all these questions and provide you with a complete guide to PKP.

PKP is an abbreviation for Taxable Entrepreneur, a status given to entrepreneurs or business entities that have met certain criteria in the Indonesian Tax Law. This status is not just a label, but has significant implications for entrepreneurs’ tax obligations and rights.

However, before we discuss further, let’s first understand what PKP is. PKP is an entrepreneur who carries out business activities regulated in the VAT and PPnBM Laws, and has fulfilled the requirements to become a tax subject. In other words, PKP is a tax subject who has the obligation to calculate, pay and report Value Added Tax (VAT) and Sales Tax on Luxury Goods (PPnBM) to the government.

Becoming a PKP is certainly not without reason. There are many benefits that can be obtained by entrepreneurs who have PKP status. One of them is business credibility. With PKP status, your business will look more credible and professional in the eyes of customers, business partners and other stakeholders. Apart from that, PKP also has the right to get an input tax refund, which of course can reduce your business tax burden.

However, how do you become a PKP? The process is actually quite simple, but requires careful preparation. You must ensure that your business meets all the requirements determined by the Tax Law, such as minimum turnover and neat administration. After that, you can submit an application to become a PKP to the Directorate General of Taxes.

This article will discuss all these things in detail. Starting from the definition of PKP, the benefits of becoming a PKP, the requirements for becoming a PKP, to how to register to become a PKP. So, if you are an entrepreneur who wants to understand more about PKP, or even planning to register for PKP, this article is the right guide for you.

What is PKP?

pengusaha kena pajak — Source: Unsplash | Tax Obligations

PKP, or Taxable Entrepreneur, is a term that we often hear in the context of business and taxation in Indonesia. However, what exactly is PKP? PKP is a status given to entrepreneurs or business entities that have met certain criteria in the Indonesian Tax Law. This status is not just a label, but has significant implications for entrepreneurs’ tax obligations and rights.

PKP is an abbreviation for Taxable Entrepreneur, a status given to entrepreneurs or business entities that have met certain criteria in the Indonesian Tax Law. In other words, PKP is a tax subject who has the obligation to calculate, pay and report Value Added Tax (VAT) and Sales Tax on Luxury Goods (PPnBM) to the government.

However, becoming a PKP is not an easy thing. There are several conditions that must be met by entrepreneurs or business entities to become PKP. Some of these requirements include having a certain minimum turnover, having neat administration, and complying with applicable tax regulations.

Apart from that, becoming a PKP is not without benefits. There are many benefits that can be obtained by entrepreneurs who have PKP status. One of them is business credibility. With PKP status, your business will look more credible and professional in the eyes of customers, business partners and other stakeholders. Apart from that, PKP also has the right to get an input tax refund, which of course can reduce your business tax burden.

Difference between PKP and Non-PKP

PKP is the abbreviation of Taxable Entrepreneur. As the name suggests, PKP is an entrepreneur or business entity that has registered as a Value Added Tax (VAT) taxpayer. As PKP, they have the right to collect VAT from their customers and remit it to the government. They are also entitled to claim VAT credits on purchases and costs they incur for business purposes. In other words, they only have to pay the difference between the VAT they collect and the VAT they claim. Becoming a PKP can also increase a business’s credibility, because it shows that they comply with tax regulations and contribute to state revenues.

On the other hand, non-PKP are entrepreneurs or business entities that are not registered as VAT taxpayers. They are not entitled to collect VAT from their customers, nor can they claim VAT credits. However, they also do not need to remit VAT to the government. While they may not have the same credibility as PKP, being non-PKP also has its advantages. For example, they may have a lower administrative burden because they do not need to deal with VAT reporting and payments.

However, please remember that both PKP and non-PKP still have to comply with all other tax obligations, such as paying Income Tax (PPh). If they find this difficult, there are many services that can help them, one of which is Skaiwork. Skaiwork offers a variety of tax services, including tax consulting and tax reporting.

Requirements to Become a PKP (Taxable Entrepreneur)

Becoming a PKP is an important decision for every entrepreneur. There are several conditions that must be met to become a PKP. First, entrepreneurs must have a NPWP (Taxpayer Identification Number). NPWP is a taxpayer identity issued by the Directorate General of Taxes and is the main requirement to become a PKP.

Second, entrepreneurs must have a minimum turnover of 4.8 billion rupiah in one tax year. If the entrepreneur’s turnover is less than this amount, the entrepreneur is not required to become a PKP, but can still register voluntarily.

Third, entrepreneurs must carry out continuous business activities. This means that the effort is not just done once, but must be ongoing. For example, if you sell an item, you have to keep selling that item, not just once or twice.

Fourth, entrepreneurs must have proof of receipt or expenditure. This evidence can be in the form of tax invoices, notes, receipts, or other relevant documents.

Fifth, entrepreneurs must report Value Added Tax (VAT) SPT (Notification Letter) every month. This VAT SPT must be reported no later than the 20th of the following month after the tax period ends.

Case example: Suppose there is an entrepreneur who has a business in the retail sector. He already has a NPWP and his turnover in one tax year reaches 5 billion rupiah. He also carries out his business activities continuously and has proof of receipts and expenses. He also routinely reports VAT SPT every month. So, the entrepreneur meets the requirements to become a PKP.

However, becoming a PKP also has consequences. As a PKP, entrepreneurs must collect, deposit and report VAT. If entrepreneurs do not comply with these obligations, they may be subject to administrative sanctions in the form of fines.

Therefore, before deciding to become a PKP, you should first consult with your tax consultant or accountant. They can help you understand more about the consequences and benefits of becoming a PKP, as well as assist you with the registration process.

Benefits of Becoming a PKP (Taxable Entrepreneur)

pajak pengusaha — Source: Unsplash | Business Tax

The first benefit of becoming a PKP is the potential for tax reduction. As a PKP, you have the right to collect VAT from your customers and remit it to the government. However, you are also entitled to claim VAT credits on purchases and costs you incur for business purposes. This means you only have to pay the difference between the VAT you collect and the VAT you claim. In this way, becoming a PKP can help you reduce your tax burden.

The second benefit of becoming a PKP is increasing business credibility. With PKP status, your business will be taken more seriously and professionally by customers and suppliers. This is because becoming a PKP shows that you comply with tax regulations and contribute to state revenue. This can increase the trustworthiness and reputation of your business in the eyes of the public.

However, being a PKP also comes with responsibilities. You need to ensure that you comply with all your tax obligations, including reporting and paying taxes on time. If you find this difficult, there are many services that can help you, one of which is Skaiwork. Skaiwork offers a variety of tax services, including tax consulting and tax reporting. With help from Skaiwork, you can ensure that you fulfill all your tax obligations as a PKP.

How to Register to Become a PKP

Registering to become a PKP or Taxable Entrepreneur is a fairly simple process if you know the steps to take. Here is a step by step guide on how to register to become a PKP.

The first step in registering to become a PKP is to understand what PKP is and whether this status is suitable for your business. PKP is a status given to entrepreneurs or business entities that have met certain requirements and have registered themselves as Value Added Tax (VAT) taxpayers. Before signing up, make sure you have considered the benefits and responsibilities that come with becoming a PKP.

After you decide to register as a PKP, the next step is to collect all the necessary documents. This may include personal identification, business documents, and other tax information. Make sure you have all these documents ready before you start the registration process.

The third step is to fill out the PKP registration form. This form can usually be found on the Directorate General of Taxes website. Make sure you fill in all the information correctly and completely. If you are unsure about a particular part of the form, do not hesitate to seek professional help.

Once the form has been filled in, the next step is to send the form and all supporting documents to the local tax office. You may need to make an appointment in advance, so be sure to check your tax office’s procedures.

Once you have submitted all the documents, you will need to wait to get confirmation that you have officially become a PKP. This may take a few weeks, so be patient.

During the registration process, there are some tips and suggestions that may be useful. First, make sure to check all your documents and information carefully before submitting them. Errors or omissions may cause delays or problems in the registration process. Second, don’t hesitate to seek professional help if you find yourself struggling. There are many services that can help you with the registration process, one of which is Skaiwork. Skaiwork offers a variety of tax services, including assistance with PKP registration.

Becoming a PKP is a big step for any business. With this status, you can enjoy benefits such as potential tax reductions and increased business credibility. However, the registration process can be complicated and confusing. By understanding the steps involved and with a little help, you can make this process easier and smoother. So, if you’re considering becoming a PKP, start with these steps and you’ll be on the right track.

In this article, we have discussed various important points that need to be taken into account. First, we have understood the importance of choosing the right service for our business needs. We have seen how Skaiwork, as a provider of virtual office and serviced office services in Jakarta, offers various services that can help our business grow and succeed.

Skaiwork not only offers a comfortable and professional workspace, but also additional services such as tax consulting. These tax services are essential for every business as they ensure that all tax obligations are met and the business can operate in a legal and ethical manner. This service also helps businesses avoid fines and sanctions that may arise from not complying with tax regulations.