In a guidance article published 28 September 2026, the DGT provided a comprehensive breakdown of income categories excluded from Income Tax (PPh) objects under Article 4 paragraph (3) of the Income Tax Law (UU PPh). The clarification addresses frequent misclassification errors in annual tax returns (SPT Tahunan), particularly regarding inheritance, grants, and specific government allowances. The article references recent tax court rulings that upheld the strict interpretation of “non-income” definitions, warning taxpayers against aggressive positions.
Key Takeaways
- Exhaustive Exemption List: The article enumerates 14 specific categories, including inheritance (warisan), grants (hibah) between family members within one degree, scholarships meeting Ministry of Finance criteria, and certain social security benefits.
- Documentation Requirements: Taxpayers must retain underlying legal documents (e.g., grant deeds, scholarship agreements) for a minimum of 10 years to substantiate exemption claims during potential audits.
- Common Pitfalls: The DGT highlighted frequent errors such as classifying employer-provided housing allowances as non-taxable grants (they are taxable compensation) and misreporting dividend income from listed shares (subject to final PPh Article 4(2)).
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