Annual Tax Report in Indonesia – Many companies have started the process of the ledger. What is the ledger? An activity that summarizes all the results based on the existing accounting, and financial cycles in the business. Simply put, the company is in the final phase of closing the report for that period.
Based on existing procedures, closing the books includes various preparations that should be determined by the company, starting from financial statements and tax returns. Taxes are the most significant part because every income earned may object of taxes. Therefore, how to prepare it? What will be done so that there are no problems?
Why Prepare Tax Returns Early?
To avoid problems and minimize errors, companies should prepare the reports early, including preparation of financial statements, Corporate Income Tax Returns, determination of fiscal adjusment and it’s supporting documents which should be attached on the Corporate Income Tax Return.
If the company prepares the returns fastly, company would found several problems, errors and quality of reporting. Therefore, time management should be considered to minimize tax exposure and risks.
Significant Elements in Annual Tax Report in Indonesia
1. Tax Planning
Tax Planning is a strategy carried out by companies to review and save income taxes. Thus, the company can minimize tax payments and avoid tax risks without violating the tax regulation.
2. Tax Review
Not only preparing tax planning, companies should also pay attention to tax reviews. At this stage, the company should analyze and review on their tax returns in advance to ensure the company comply with the existing tax regulation and obligations.
Annual Tax Report Terms for Companies in Indonesia
1. Supporting Documents
The annual tax reporting process, companies should prepare Corporate Income Tax Returns and several supporting documents/data or information as follows:
- Financial Statement
- Proof of tax payment
- Proof of withhold tax slip as tax credit
- Fiscal depreciation and amortization
- Determination of Debt on Equity (DER) Ratio
- Nominatif list of entertainment and promotion expense
- Statement of related partiy transactions
- Calculation of Fiscal Net Income
2. Book Keeping Review
If all of transaction was posted on the book keeping, the company should continue to review the process to generate financial statements and find out for company’s developments, which must look at the accuracy and provisions of the prepared report.
3. Conducting Tax Equalization
Tax equalization is the process to look at the provisions or suitability based on other types of taxes. This stage is very helpful for tax planning at the end of the year and reduce tax exposure or tax risk.
4. Analysis of Taxes Payable
If the company prepare to deeper analysis, the estimation results regarding under- or over-tax can be known.