START NOW – CV taxes is one of the obligations that must be fulfilled by every Commanditaire Vennootschap (CV) company in Indonesia.

There are several types of CV taxes, including those imposed based on income and business activities. This is part of the Indonesia’s general taxation provisions. 

What is CV and CV Tax

In the business world, tax is an obligation that must be fulfilled and cannot be avoided by every business actor.

That means, every type of business entity, including Commanditaire Vennootschap or CV, has tax obligations that must be fulfilled.

CV is a business entity which consists of active partners and passive partners. The active partners manage the business, while passive partners only invest capital.

CV tax is a tax obligation that must be paid by the CV business entity on the income earned.

In order to fulfill this tax obligation, a CV must first have an NPWP. Furthermore, CVs must also pay taxes which are their obligations properly.

The money from this tax revenue will be used by the government to support development and public services in Indonesia.

Type of CV Taxes

Based on the prevailing tax rules and regulations in Indonesia, there are several types of taxes imposed on CVs, including:

Income Tax (PPh)

The definition of income tax is a tax imposed on income earned by taxpayers, both individuals and business entities. 

There are several types of income tax that must be paid by a CV, namely

Corporate Income Tax

Corporate Income Tax is a tax imposed on profits earned by CV. The tax rate for Corporate Income Tax is 22percent of net profit.

Net profit is calculated as the difference between total revenue and operating costs. CV must pay this tax every year, after preparing the financial report.

Income Tax Article 21

CV is also responsible for deducting PPh Article 21 from employee salaries and depositing it into the state treasury.

The withholding rate for PPh Article 21 depends on the amount of income and employee status.

Income Tax Article 23

This tax is imposed on income received by third parties from CV, such as for services provided.

CV must deduct the Article 23 Income Tax from payments made to service providers and deposit it.

Article 23 PPh rates vary, usually between 2percent to 15percent depending on the type of income.

Value Added Tax (PPN)

Besides income tax, there are other types of CV tax that you need to know, namely Value Added Tax. 

Value Added Tax or PPN is a tax imposed on buying and selling transactions of goods and services.

If CV is a Taxable Entrepreneur (PKP), then it is obliged to collect PPN from customers. The PPN rate in Indonesia is currently 11percent. 

The PPN collected must be remitted to the state. CVs must prepare and report PPN SPT periodically.

Local tax

CVs may also be subject to local taxes depending on the location and type of business.

Some types of local taxes that may apply include:

Advertisement tax

Charged for placing advertisements or billboards by CV. This tax rate depends on the size and location of the advertisement.

Hotel Tax

If a CV has a business in the hotel sector, this tax is imposed on income from hotel services. These tax rates vary by region.

Restaurant tax

For CVs who run a restaurant or cafe, this tax is imposed on income from sales of food and drinks.

Just like other types of local taxes, the restaurant tax rating also vary from region to region.

Calculating CV Tax

To be able to calculate CV tax correctly, there are several formulas and steps you need to know, namely: 

Calculating Net Profit

The first step in calculating tax is to find out CV’s net profit. Net profit is obtained from total revenue minus total operating costs.

Net Profit Formula:

Net Profit = Total Revenue – Total Costs

Calculating Corporate Income Tax

After knowing the net profit, you can calculate the Corporate Income Tax that must be paid. The Corporate Income Tax Formula is:

Corporate Income Tax = Net Profit x Tax Rate

For example, if CV’s net profit is IDR 100,000,000, then the Corporate Income Tax that must be paid is:

Corporate Income Tax = IDR 100,000,000 x 22% = IDR 22,000,000

Calculating Income Tax Article 21

To calculate PPh Article 21, CV must know the employee’s total income. After that, the CV must make deductions in accordance with applicable regulations.

For example, the employee’s total salary is IDR 10,000,000. So, the deduction for PPh Article 21 can be calculated using the appropriate rate.

Calculating Income Tax Article 23

To calculate PPh Article 23, CV must know the total payments made to third parties. The Article 23 Income Tax formula is:

Income Tax Article 23 = Total Payment x Tax Rate

For example, CV pays IDR 5,000,000 for services and the tax rate is 2percent. So, the Article 23 PPh that is deducted is:

Income Tax Article 23 = IDR 5,000,000 x 2% = IDR 100,000

Calculating PPN

If a CV is a Taxable Entrepreneur (PKP), then the CV must calculate PPN from total sales with formula: 

PPN = Total Sales x VAT Rate

For example, if total sales are IDR 50,000,000, then the PPN that must be collected from the CV is:

PPN = IDR 50,000,000 x 11% = IDR 5,500,000

Preparing Tax Reports

After calculating all of the taxes, CVs certainly need to make payments accordingly. Furthermore, CVs must also prepare tax reports. 

This report must include all types of CV taxes that have been calculated and paid. Then, CVs must submit it according to the specified deadline.

By understanding the types of taxes imposed and how to calculate them, CVs can fulfill their tax obligations properly.

This will not only helps CV in running business legally, but also contributes to the country’s development.

Therefore, it is important for every CV owners in Indonesia to understand and comply with applicable tax provisions.

For CV’s owner who find it difficult to calculate or fulfill CV tax obligations, Start Now is ready to help.