Government Regulation No. 58 of 2023
Government Regulation No. 58 of 2023 was issued on 27 December 2023 and has been effective since 1 January 2024. This regulation governs the withholding tax rates under Article 21 (PPh Article 21) on income received by individual taxpayers from employment, services, or other activities. A key update introduced by this regulation is the implementation of effective tax rates, aimed at simplifying and streamlining the PPh Article 21 withholding process.
The main difference between the effective PPh Article 21 rates and the rates under Article 17 lies in the calculation method and the types of income subject to tax. The Average Effective Rate (AER) is applied for PPh Article 21 withholding from January to November. In December, the tax calculation reverts to the standard Article 17 tax rate formula.
For a more detailed explanation and examples of the calculation, please refer to the link below
