Virtual office, an innovative solution for modern entrepreneurs, offers flexibility and efficiency in conducting business. However, like traditional businesses, virtual offices also have tax obligations that must be fulfilled. This article will thoroughly examine the tax regulations for virtual offices in Indonesia, helping you understand your tax rights and obligations.
Read Also: 6 Advantages and Disadvantages of Virtual Office for Your Business
Legal Basis of Virtual Office Taxation
In DKI Jakarta, the legality of virtual offices is approved by the government as regulated in the Circular of the Integrated One-Stop Service Agency (BPTSP) Number 06/SE/2016 concerning the Issuance of Domicile Certificates and Subsequent Permits for Virtual Office Users.
Another legal basis for virtual office taxation is Article 1 paragraph 22 of the Minister of Finance Regulation (PMK) Number 147/PMK.03/2017 concerning the Procedures for Taxpayer Registration and Revocation of Taxpayer Identification Numbers (NPWP) as well as Confirmation and Revocation of Confirmation of Taxable Entrepreneurs (PKP).
This article states that a Virtual Office or Co-working Space is an office that has physical space and office support services provided by the manager for use as a domicile, business premises, or joint correspondence by 2 or more Entrepreneurs with payment in any form, excluding building and office rental services (Serviced Office).
Read Also: Virtual Office Can Be PKP: Legal Basis, Benefits, and Requirements
Aspects of Virtual Office Taxation
The proliferation of startups using virtual offices creates interesting tax opportunities. What are the aspects of virtual office taxation? Let’s discuss them below.
Article 4 Paragraph (2) Income Tax (Final Income Tax)
The first aspect of virtual office taxation is Article 4 paragraph (2) Income Tax or Final Income Tax. This tax is levied on rental services with a serviced office and co-working office model. The tax rate is 10% of the total rental value, including:
- Maintenance costs,
- Preservation costs,
- Security costs,
- Service costs, and others.
Article 23 Income Tax
Article 23 Income Tax is imposed on virtual offices that only rent an address or server/bandwidth, without using workspace. This type can be considered as rental of property use. The rate is 2%. Proof of withholding Article 23 Income Tax can be used as a tax credit for building managers to reduce the amount of tax to be paid in the Annual Corporate Income Tax Return.
Read Also: 5 Objectives of Virtual Office Along with Its Benefits
This concludes the review of virtual office taxation, which is the choice of many entrepreneurs and building rental service providers today.
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