NPWP and filing

jstar

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Third parties have no rights or interest in a prenup.

No, this is a wrong assertion. And very theoretical.

Let me give you an example I have seen from up close: A family member got divorced and obviously the notary used the prenup. In which it was determined that of the multiple properties the couple owned, every single one was assigned to a partner (they divided into country and region). So a couple of houses for one, and the remainders for the other.

But the problem was that they owned the properties together. Since the re-registration of a house was very expensive (up to 10%) they wanted to avoid the costs and decided to keep the ownership as it was.

On the tax return of the concerned countries they had done a split of 50/50 of the real estate tax before the divorce. Now of course they wanted a 100/0 depending on who got which house.

The tax office only agreed after hand-over of the prenup.
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Jamu

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No, this is a wrong assertion. And very theoretical.

Let me give you an example I have seen from up close: A family member got divorced and obviously the notary used the prenup. In which it was determined that of the multiple properties the couple owned, every single one was assigned to a partner (they divided into country and region). So a couple of houses for one, and the remainders for the other.

But the problem was that they owned the properties together. Since the re-registration of a house was very expensive (up to 10%) they wanted to avoid the costs and decided to keep the ownership as it was.

On the tax return of the concerned countries they had done a split of 50/50 of the real estate tax before the divorce. Now of course they wanted a 100/0 depending on who got which house.

The tax office only agreed after hand-over of the prenup.
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As I said above, a prenup is enforceable only by one of the parties against the other, as they are the only contracting parties. In fact, it's possible that a couple can disregard the prenup and divide their assets however they like (no one is required to actually enforce a benefit they have under any contract - in law this concept is called waiver, or relinquishment of a known right). In the case you cite (if I understand it correctly), the prenup was evidence of the arrangement that the parties had made with respect to each other, and the parties intended to enforce it on each other, so the tax office agreed. It was certainly not a binding contract on the tax office, but rather legal evidence of the parties intentions vis a vis each other.

Also, it's not theoretical, but actually common sense. To have a situation under a prenup where one spouse is taxed on every financial benefit provided to it by the other would be perverse. In fact, if I recall correctly, under the Civil Code a husband should provide for the needs of his wife. Making it a taxable event (on her) for him to do so is nonsense. Spouses with a prenup can gift to each other any amounts they wish, tax free. The only consequence of a prenup is if there is a dispute between the two of them as to ownership or division of assets, then the terms of the agreement rule.
 

Edward

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............................. 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.
A very good reply. I ran across a case recently where a married couple (WNA and WNI) both currently don't work. The foreign spouse did work but it appears that the NPWP is inactive. To invest a large amount of money in the WNI's name the consultant asked the WNI to get a NPWP. When she attempted this, it was requested that the WNA husband activate his NPWP first. Can anyone shed any light on this?
 

Edward

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........................... Spouses with a prenup can gift to each other any amounts they wish, tax free. The only consequence of a prenup is if there is a dispute between the two of them as to ownership or division of assets, then the terms of the agreement rule.

If there is no prenup, what is the situation regards gifting to each other?
 

Edward

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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?:ohwell:
Bank BRI is able to open accounts for workers e.g. drivers, and I guess "the unemployed", whose incomes do not warrant filing a tax return.
 
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jstar

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Spouses with a prenup can gift to each other any amounts they wish, tax free.

And again, very theoretical. And according to your own theory, it would in fact not be a gift at all.

This was an interesting discussion.

If you ever talked to a tax officer here and went through the tax amnesty, you will know how they will react if they suddenly see billions of rupiah appear on the WNI's account and her reporting the house or whatever she bought with that...

To make a long story short; they will do anything to make you pay. If you're recently married you might get away with it, otherwise they rub it in that there should have been reporting on the (combined) assets over all these years, and if you explain to them the prenup, they say it's a gift between two individuals and not between first degree relatives so taxable.
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Jamu

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And again, very theoretical. And according to your own theory, it would in fact not be a gift at all.

This was an interesting discussion.

If you ever talked to a tax officer here and went through the tax amnesty, you will know how they will react if they suddenly see billions of rupiah appear on the WNI's account and her reporting the house or whatever she bought with that...

To make a long story short; they will do anything to make you pay. If you're recently married you might get away with it, otherwise they rub it in that there should have been reporting on the (combined) assets over all these years, and if you explain to them the prenup, they say it's a gift between two individuals and not between first degree relatives so taxable.
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I think this view of the tax office is overly cynical. All Indonesia tax residents should comply with filing / reporting requirements so there shouldn't be any surprises. There is no point to confuse the issue by reporting a prenup. It's not required by the law to be reported to the tax authorities, nor is it relevant to them unless there is a termination of the marriage and a subsequent distribution of assets based on the agreement (as in your example above). Assuming that the couple have complied with their tax reporting obligations (and I realize that many mixed couples do not as the foreign spouse often has unreported income/assets offshore) there will be no issue.

Also, taking your view to it's illogical conclusion, all WNI spouses with prenups who are being financially supported by the WNA spouse would have tax reporting obligations to report the financial support (as you claim, it's a gift between two individuals, not first degree relatives...) and if it's over a certain amount then pay tax on it. In my view this is a complete nonsense and moreover overlooks the tax law that says married couples must file returns as one 'entity' unless they petition the tax office otherwise.
 

Edward

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............................
Also, taking your view to it's illogical conclusion, all WNI spouses with prenups who are being financially supported by the WNA spouse would have tax reporting obligations to report the financial support (as you claim, it's a gift between two individuals, not first degree relatives...) and if it's over a certain amount then pay tax on it. In my view this is a complete nonsense and moreover overlooks the tax law that says married couples must file returns as one 'entity' unless they petition the tax office otherwise.
I dearly hope Jamu and Jstar can resolve the fundamental matter of whether there is a distinction here relating to paying tax on gifts from spouses when there is, and when there is not, a pre-nup.
 

jstar

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Hmm. I think we will have to agree to disagree.

But what’s most important in the end, is what happens at the Kantor Pajak.
 

SSW19

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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.
My husband, also here on a KITAS for family reunion, wanted to open an account at BCA but they insisted that he provide his Tax Identification Number or NPWP; he is French and does not have to pay French tax since he resides out of France for more than 180 days per year, he also does not have an NPWP, so how do we get around this?
 

snpark

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Just give them some random 15 digit number. They never check. Pretend to read it off your phone or something
 

SSW19

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Is it 15 because that’s the number of digits of an NPWP? What if they ask to see the original or a copy of the card?
 

snpark

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Yes obviously that's why I said 15. Or 16. I forget. Let me count
Just say you don't have it and you have the number and will w/a later the copy. They won't bother to ask

Or just get a real one. It's free. Doesnt mean you have to pay tax. It's renewed annually anyway with the same number but has no expiry date on it
 

Banana72

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Knock on wood i actually opened a BCA acct 10 years ago...I don't even remember what I answered at that time, but I managed to open one without it..so just wondering...the 'potongan bunga pajak' that I always see on my monthly report...I take it the bank still pays it to the government on my behalf?
 

Vanuatu

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Knock on wood i actually opened a BCA acct 10 years ago...I don't even remember what I answered at that time, but I managed to open one without it..so just wondering...the 'potongan bunga pajak' that I always see on my monthly report...I take it the bank still pays it to the government on my behalf?
You get taxed on your interest earned monthly regardless of if you have a NPWP or not. The bank takes it out directly.
 

snpark

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Everyone gets tax on their bunga interest. I think it's 20%.

But if you have npwp you only get tax 10%

At least that's what Hsbc do and what happens with me
They give you the credit interest then deduct back 10 or 20% of that interest

15 numbers on my npwp
 

Helpful Herbert

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Also, you will not be given an NPWP if you state the purpose of it is just to open a bank account or to receive bank interest. They will only issue you with one if you have some business activity or employment. I guess you can say you plan to open a business to get an NPWP but then in practice you never do so. But then you might have to submit annual tax returns, which would be an administrative pain.
 

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