How to File a Non-Effective Taxpayer Application

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How to File a Non-Effective Taxpayer Application

One thing that is of concern as taxpayers, including entrepreneurs, is the obligation to pay taxes. For novice entrepreneurs, concerns often arise about how the tax obligations when their business is closed. Should an entrepreneur still do tax reporting? Or are there other provisions governing this matter?

The state has anticipated this problem so that entrepreneurs do not need to worry. For entrepreneurs who are no longer active in running a business, they can submit an ineffective taxpayer application.

Quoted from, non-effective taxpayers previously regulated in SE-60 / PJ / 2013, have now been amended in SE-27 / PJ / 2020 regarding technical instructions for implementing NPWP administration, Electronic Certificates and Taxable Entrepreneurs (PKP) confirmation. .

For legal certainty and improving services, there is a Regulation of the Director General of Taxes Number PER-04 / PJ / 2020 concerning Technical Guidelines for Administrative Implementation of Taxpayer Identification Numbers, Electronic Certificates, and Taxable Entrepreneur Confirmation.

So, what is the process for submitting a none-effective application for the taxpayer?

Thereare several stages that need to be passed. However, before submitting an ineffective application, make sure beforehand that your status as an entrepreneur meets the following criteria.

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Non-Effective Taxpayer Criteria

Taxpayers who can be designated as Non-Effective Taxpayers are Taxpayers who meet the following criteria: 
  • Individual taxpayers who run a business or independent work, but actually no longer carry out business activities or do no longer do independent work.
  • Individual taxpayers who do not run a business or independent work and whose income is below taxable income.
  • Individual Taxpayers who reside or are abroad for more than 183 (one hundred and eighty three) days within a period of 12 (twelve) months and do not intend to leave Indonesia permanently.
  • Taxpayers who submit applications for write-off and have not issued a decision.
  • Individual married woman taxpayers who already have a different NPWP from their husbands and do not intend to fulfill their tax obligations separately.
  • Individuals who have an NPWP as family members or dependents, namely NPWP with branch codes "001", "999", "998", and so on.
  • Government Treasurer Taxpayers who no longer meet the requirements as taxpayers because they have no longer made payments and have not yet eliminated their NPWP.
  • Taxpayer whose address is not known or found again.
After ensuring your Taxpayer status meets the above criteria, the next step is to apply for ineffective through the steps below.

Application Procedure for Submission to Become a Non-Effective Taxpayer

SE-27 / PJ / 2020 states that this NE application can be submitted using the Non-Effective Taxpayer Determination Application Form and can be submitted in the following ways:
  1. To apply to become a Non-Effective Taxpayer, first fill out the Application Form for Determination of Non-Effective Taxpayers starting from the type of determination of the NE Taxpayer, identity, reasons, and others.
  2. Come directly to the Tax Service Office (KPP) where the taxpayer is registered directly or through KP2KP, while carrying the required documents and a signed application letter.
  3. By post, or courier service company with due observance of the required documents.

 Here's how to fill in the form, namely:

1. Types of Determination of Non-Effective Taxpayers:

  • Cross mark (x) on the WP Application box if the form is filled out and signed by the WP, or;
  • Assignment by Position box if the form is filled in and signed by the Officer.

2. Research Report Number:

Filled with the number of the Research Report that underlies the determination of the Non-Effective Taxpayer

3. Taxpayer Identity

Tax ID number:

To be completed with the NPWP number of the WP submitting the application for the determination of the Non-Effective WP or the WP which is determined ex officio.

The name of the taxpayer:

Filled with the name of the WP submitting the application for the determination of the Non-Effective WP or WP who is determined in ex officio as written on the NPWP Card or registered Certificate (SKT).

The degree is written in the event that the Individual WP has a degree.

4. Reasons for Application for Determination of Non-Effective Taxpayers

Filled with a cross mark (x) in the box that corresponds to the reason for the determination of the Non-Effective Taxpayer.  If you choose another reason, the explanation of the reason should be written clearly.

5. Statement

Quite clear.

How to Change Non-Effective Taxpayer Status to be Active Again

If on a business trip that has been stopped, it turns out that it can operate again, the taxpayer can apply for reactivation of his taxpayer status.  To reactivate the Non-Effective NPWP, you must come directly to the tax office then fill in the NPWP reactivation form.

The process took place right away.  So, you can immediately use your NPWP the next day.  Taxpayers who apply for reactivation must meet the following criteria.
  • There is data and / or information indicating that the Taxpayers who have been designated as Non-Effective Taxpayers no longer meet the criteria as Non-Effective Taxpayers.
  •  Reactivation in an office by the Directorate General of Taxes because there is data or information related to the taxpayer.

Non-Effective NPWP No Need to Report Annual Tax Return

If the NPWP is inactive, you are not required to report the Annual Tax Return, either manually or online.  In other words, the obligation to report the Annual Tax Return has also been terminated.

Understand the Taxpayer's Non-Effective Submission Process

Taxpayers who will apply for non-effective taxpayers need to understand the procedures and requirements needed to run smoothly in the process.  In addition, taxpayers also need to understand the benefits and disadvantages of changing this status.

If your NPWP is already inactive, all tax obligations will be suspended so that you are not obliged to pay or report taxes.  There will also be no penalties for not paying or reporting taxes.

On the other hand, if the NPWP is inactive, all tax transactions related to your NPWP number will not be processed.  This is very detrimental if it turns out that you are still using the NPWP for transactions with your partners in the business of trying to reopen the business that was closed.

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