NPWP and filing

[reducu677]

Hi.

My wife and I have (in her name) a bank account in Indonesia with our savings and retirement totaling around 2 billion IDR. She opened this account in early 2018 and did not require NPWP. The money was transferred to her at that point from my account in another country. (I have the documentation regarding this transfer)

Now, we are interested in opening accounts with a more international bank that requires the NPWP from my wife. If my wife creates the NPWP, she will be required to file taxes yearly, of course. My main concern is with the assets. Since we will need to report the assets on the tax form, should we anticipate any problems? Rather, should we anticipate that they will try to ask questions?

Some things that might be noteworthy :

- We were married in Indonesia
- I do not have residency so accounts are not in my name
- She will as such need to file separately instead of jointly

 

[snpark]

Sometimes they just need a number to complete the application form only

Why not (ahem cough cough) supply a random number for now and tell them it's being renewed and you will send them the new card copy when you get it and maybe they will forget

Sometimes they don't want to see it, they just want the number to fill in the box

 

[dafluff]

Alternatively, ask the bank if they have an NPWP waiver form your wife can sign. If your wife does not have any taxable income, then she is not required to have NPWP (interest income is not counted as taxable income, since it is already taxed, for example). Creating an NPWP and the reporting burden every year for a lifetime is annoying, and I would avoid it if at all possible.

If they insist on NPWP for your wife, then yes, the question about where the Rp 2 billion comes from could come up in an audit. If you and your wife do NOT have a separation of assets agreement, then showing that the money is from you, should cause no problem.

 

[jstar]

Yup, an example where having a prenup might bite you in the @ss.

 

[jstar]

BTW, practically no bank agrees to this, but Bank of Indonesia has made their regulations on foreigners owning bank accounts more relaxed. If you stay between $2K and $50K you could even open an account without residency visa or permit (again). But as I said, I haven't yet seen a bank allowing this though.

 

[brian@bekasi]

It is my understanding that if your wife opened the account prior to marriage and you deposited the money prior to marriage you may have a problem from a gift tax perspective.

Obviously that may never get picked up by the tax people particularly given that the bank deducts the tax on interest earned and on 2 billion we are not talking massive interest income..

We had that problem prior to marriage a number of years ago when I gave my wife money to buy land in her name. The issue was picked up by her accountant and we susequently used the tax amnesty period to pay the tax at a very discounted rate.

If the money was sent after marriage I would not see any problems with lodging tax returns and getting an NPWP. You were married in Indonesia and the money was brought to marriage by you. Without a pre or postnup, it should not be a problem as normal Indonesian family law rules apply to assets of the marriage..

 

[IndoTom]

Is there a reason that you need such a large sum of money in an Indonesian bank? I'm not saying it's not safe, but maybe it's safer back in your home country. Perhaps you could just transfer the majority of it back overseas to your home country and use an ATM when needing cash.

 

[DzulnSiti]

In my opinion base on my German neighbor. If you intend in near future to be come WNI it is better to apply NWPW for your self. The money put in the deposito and put it as your source of income. Since the deposito still need to be declare as income why not put under your source of income. Regarding the money it is wise just come down to tax department inquiry about it?

 

[Helpful Herbert]

It seems like you can only get a NPWP if you have an Indonesian employer. My application was rejected with the following explanation:
"Syarat objektif untuk memiliki NPWP adalah memiliki penghasilan. "
They said that needing an NPWP to open a bank account is not a good enough reason, so rejected it. I would have thought that bank interest would count as "penghasilan", but apparently not.

 

[jstar]

Ya that's a big misunderstanding at many pajak. Ah, you don't work here? No NPWP.

 

[R Cameron]

Tell them you have "penghasilan dari luar negri"

 

[dafluff]

I would have thought that bank interest would count as "penghasilan", but apparently not.

It is income. However since it is already taxed at the bank, they don't fall under taxable income.

 

[Edward]

It is income. However since it is already taxed at the bank, they don't fall under taxable income.

True. But one is still required to state income earned as bank interest in one's SPT 21 (tax form) I don't think this alone would justify the issuance of an NPWP however.

 

[Helpful Herbert]

In that case why do banks insist on an NPWP to set up an account? Are they saying unemployed people should not be allowed to have bank accounts?

 

[jstar]

Rhetorical I guess? The whole anti money laundry has been a big theme for BI (Bank of Indonesia) and thus also for the regular banks. It's been "know your customer" for over a decade now and the regulations asked all kinds of additional info.

 

[snpark]

know your client aka cover your ass

 

[Helpful Herbert]

In the end I was able to set up an account with Sinarmas Bank, just by suppyling the tax number from my home country, so that works fine for me.

 

[Edward]

In the end I was able to set up an account with Sinarmas Bank, just by suppyling the tax number from my home country, so that works fine for me.

I find that perplexing. I know in the old days there was a period when one did need a NPWP yet banks waived it. Later they asked for it, but they never ever asked, as far as I know, depositors to take their money and leave.

 

[MieTekTek]

I recently opened an account with Mandiri. On the topic of NPWP, I told the bank officer that I'm married here, on a KITAS for family reunion and is not supposed to work. They had me sign done form and waive the NPWP requirement.

 

[Jamu]

Yup, an example where having a prenup might bite you in the @ss.

I disagree. There is a lot of confusion around the issue of prenups and taxes. By its very nature, a prenup is an agreement that exists only between spouses, and does not involve third parties. While it must be registered to be valid, it is only enforceable by one spouse against the other (and vice versa). Third parties have no rights or interest in a prenup. Accordingly, it is essentially a silent agreement that lies buried unless/until there is dispute (eg. due to divorce) between the spouses over the ownership or division of assets, or if the Indonesian spouse intends to sell local real estate that they own in their own name and the buyer wishes to see the agreement as part of their due diligence. The tax authorities have no way of knowing anything about a prenup and indeed according to the tax law, in order for spouses to maintain separate tax affairs they would have to file a special petition requesting to be taxed separately as the law presumes one entity for tax purposes. Even a prenup is insufficient by itself for this purpose as it does not apply to any third party, including the tax authorities.