Effective 20 October 2026, Minister of Finance Regulation PMK-44/2026 introduces revised methodologies for calculating family relationships (derajat keluarga) for tax purposes. This regulation impacts eligibility for dependent deductions (PTKP), inheritance tax exemptions, and gratuitous transfer reliefs. Moving beyond simple bloodlines, PMK-44/2026 incorporates adoption, step-relationships, and guardianship arrangements recognized under Indonesian civil law. The DGT article provides illustrative charts and computational examples to assist taxpayers in correctly determining the degree of kinship for Form 1770/1770-S reporting.
Key Takeaways
- Expanded Definition of Dependents: Legally adopted children and stepchildren now qualify equally with biological children for PTKP additional deductions, provided court decrees or civil registration records are maintained.
- Degree Calculation Standardized: The regulation adopts the civil law canon degree system, counting generations up and down from the taxpayer, replacing prior customary interpretations that varied by region.
- Documentation Requirements Heightened: Taxpayers must retain civil registry certificates (Akta Kelahiran, Akta Pengakuan Anak, Putusan Pengadilan) for audit verification; failure to produce documents may result in disallowance of deductions.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement