Prenup and post-nuptial agreements

dafluff

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Would it be safer to have a will certifying that the property will go to a (hopefully trustworthy) Indonesian relative who will then help with the disposal or is it ok to have a will stating it goes to the WNA and they then have the 1 year to dispose of it as per other rules? Also what happens if no will is present?

You can not inherit it, as it is considered joint property (ie. you can't inherit something you already own). You can will it to someone else, but I think both you and the WNI spouse will have to sign, again because it is joint property.
 

Davita

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As Singapore absolutely does not allow dual citizenship, this is nonsense and undermines your credibility.
I'm sure Episode8 can talk for himself but let's be fair...he didn't say he was a citizen of those countries...
What he actually said was......Quote "Just to give everyone a little background of where I come from. I am Swiss/Australian/Singaporean..."
I interpreted that to mean he has an affiliation, and possible nationality, from those three countries....but not necessarily citizenship.
 

Jamu

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Furthermore, while it pushes the pre and postnup, it does not mention some rather MAJOR drawbacks of having them, merely that it has "tax consequences".

Here is something to consider: If you enter either a prenup or postnup, then by Indonesian law any money or gifts transferred between husband and wife becomes taxable income! This is because all gifts except between parents and children are taxable income in Indonesia. This becomes a rather large issue if the WNA spouse buys the property and gifts it to the WNI spouse, as is often the case.
You mention Indonesian law, so can you please cite some legal authority (statute) for your assertion above?
 

dafluff

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You mention Indonesian law, so can you please cite some legal authority (statute) for your assertion above?

You can check out UU 36 2008 on Income Tax (PPh). Quoted some of the relevant stuff below.


UNDANG-UNDANG REPUBLIK INDONESIA
NOMOR 36 TAHUN 2008

(1) Yang menjadi objek pajak adalah penghasilan, yaitu setiap tambahan kemampuan ekonomis yang diterima atau diperoleh Wajib Pajak, baik yang berasal dari Indonesia maupun dari luar Indonesia, yang dapat dipakai untuk konsumsi atau untuk menambah kekayaan Wajib Pajak yang bersangkutan, dengan nama dan dalam bentuk apa pun, termasuk:
Penggantian atau imbalan berkenaan dengan pekerjaan atau jasa yang diterima atau diperoleh termasuk gaji, upah, tunjangan, honorarium, komisi, bonus, gratifikasi, uang pensiun, atau imbalan dalam bentuk lainnya, kecuali ditentukan lain dalam Undang-undang ini;
hadiah dari undian atau pekerjaan atau kegiatan, dan penghargaan;
laba usaha;
keuntungan karena penjualan atau karena pengalihan harta termasuk:
keuntungan karena pengalihan harta kepada perseroan, persekutuan, dan badan lainnya sebagai pengganti saham atau penyertaan modal;
keuntungan karena pengalihan harta kepada pemegang saham, sekutu, atau anggota yang diperoleh perseroan, persekutuan, dan badan lainnya;
keuntungan karena likuidasi, penggabungan, peleburan, pemekaran, pemecahan, pengambilalihan usaha, atau reorganisasi dengan nama dan dalam bentuk apa pun;
keuntungan karena pengalihan harta berupa hibah, bantuan, atau sumbangan, kecuali yang diberikan kepada keluarga sedarah dalam garis keturunan lurus satu derajat dan badan keagamaan, badan pendidikan, badan sosial termasuk yayasan, koperasi, atau orang pribadi yang menjalankan usaha mikro dan kecil, yang ketentuannya diatur lebih lanjut dengan Peraturan Menteri Keuangan, sepanjang tidak ada hubungan dengan usaha, pekerjaan, kepemilikan, atau penguasaan di antara pihak-pihak yang bersangkutan; dan
keuntungan karena penjualan atau pengalihan sebagian atau seluruh hak penambangan, tanda turut serta dalam pembiayaan, atau permodalan dalam perusahaan pertambangan;
penerimaan kembali pembayaran pajak yang telah dibebankan sebagai biaya dan pembayaran tambahan pengembalian pajak;
bunga termasuk premium, diskonto, dan imbalan karena jaminan pengembalian utang;
dividen, dengan nama dan dalam bentuk apapun, termasuk dividen dari perusahaan asuransi kepada pemegang polis, dan pembagian sisa hasil usaha koperasi;
royalti atau imbalan atas penggunaan hak;
sewa dan penghasilan lain sehubungan dengan penggunaan harta;
penerimaan atau perolehan pembayaran berkala;
keuntungan karena pembebasan utang, kecuali sampai dengan jumlah tertentu yang ditetapkan dengan Peraturan Pemerintah;
keuntungan selisih kurs mata uang asing;
selisih lebih karena penilaian kembali aktiva;
premi asuransi;
iuran yang diterima atau diperoleh perkumpulan dari anggotanya yang terdiri dari Wajib Pajak yang menjalankan usaha atau pekerjaan bebas;
tambahan kekayaan neto yang berasal dari penghasilan yang belum dikenakan pajak;
penghasilan dari usaha berbasis syariah;
imbalan bunga sebagaimana dimaksud dalam Undang-Undang yang mengatur mengenai ketentuan umum dan tata cara perpajakan; dan
surplus Bank Indonesia.
(2) Penghasilan di bawah ini dapat dikenai pajak bersifat final:
penghasilan berupa bunga deposito dan tabungan lainnya, bunga obligasi dan surat utang negara, dan bunga simpanan yang dibayarkan oleh koperasi kepada anggota koperasi orang pribadi;
penghasilan berupa hadiah undian;
penghasilan dari transaksi saham dan sekuritas lainnya, transaksi derivatif yang diperdagangkan di bursa, dan transaksi penjualan saham atau pengalihan penyertaan modal pada perusahaan pasangannya yang diterima oleh perusahaan modal ventura;
penghasilan dari transaksi pengalihan harta berupa tanah dan/atau bangunan, usaha jasa konstruksi, usaha real estate, dan persewaan tanah dan/atau bangunan; dan
penghasilan tertentu lainnya,
yang diatur dengan atau berdasarkan Peraturan Pemerintah.
(3) Yang dikecualikan dari objek pajak adalah:
a.
bantuan atau sumbangan, termasuk zakat yang diterima oleh badan amil zakat atau lembaga amil zakat yang dibentuk atau disahkan oleh pemerintah dan yang diterima oleh penerima zakat yang berhak atau sumbangan keagamaan yang sifatnya wajib bagi pemeluk agama yang diakui di Indonesia, yang diterima oleh lembaga keagamaan yang dibentuk atau disahkan oleh pemerintah dan yang diterima oleh penerima sumbangan yang berhak, yang ketentuannya diatur dengan atau berdasarkan Peraturan Pemerintah; dan
harta hibahan yang diterima oleh keluarga sedarah dalam garis keturunan lurus satu derajat,
badan keagamaan, badan pendidikan, badan sosial termasuk yayasan, koperasi, atau orang pribadi yang menjalankan usaha mikro dan kecil, yang ketentuannya diatur dengan atau berdasarkan Peraturan Menteri Keuangan,
sepanjang tidak ada hubungan dengan usaha, pekerjaan, kepemilikan, atau penguasaan di antara pihak-pihak yang bersangkutan;
b. warisan;
c. harta termasuk setoran tunai yang diterima oleh badan sebagaimana dimaksud dalam Pasal 2 ayat (1) huruf b sebagai pengganti saham atau sebagai pengganti penyertaan modal;
d. penggantian atau imbalan sehubungan dengan pekerjaan atau jasa yang diterima atau diperoleh dalam bentuk natura dan/atau kenikmatan dari Wajib Pajak atau Pemerintah, kecuali yang diberikan oleh bukan Wajib Pajak, Wajib Pajak yang dikenakan pajak secara final atau Wajib Pajak yang menggunakan norma penghitungan khusus (deemed profit) sebagaimana dimaksud dalam Pasal 15;
e. pembayaran dari perusahaan asuransi kepada orang pribadi sehubungan dengan asuransi kesehatan, asuransi kecelakaan, asuransi jiwa, asuransi dwiguna, dan asuransi bea siswa;
f. dividen atau bagian laba yang diterima atau diperoleh perseroan terbatas sebagai Wajib Pajak dalam negeri, koperasi, badan usaha milik negara, atau badan usaha milik daerah, dari penyertaan modal pada badan usaha yang didirikan dan bertempat kedudukan di Indonesia dengan syarat:
dividen berasal dari cadangan laba yang ditahan; dan
bagi perseroan terbatas, badan usaha milik negara dan badan usaha milik daerah yang menerima dividen, kepemilikan saham pada badan yang memberikan dividen paling rendah 25% (dua puluh lima persen) dari jumlah modal yang disetor;
g. iuran yang diterima atau diperoleh dana pensiun yang pendiriannya telah disahkan Menteri Keuangan, baik yang dibayar oleh pemberi kerja maupun pegawai;
h. penghasilan dari modal yang ditanamkan oleh dana pensiun sebagaimana dimaksud pada huruf g, dalam bidang-bidang tertentu yang ditetapkan dengan Keputusan Menteri Keuangan;
i. bagian laba yang diterima atau diperoleh anggota dari perseroan komanditer yang modalnya tidak terbagi atas saham-saham, persekutuan, perkumpulan, firma, dan kongsi, termasuk pemegang unit penyertaan kontrak investasi kolektif;
j. dihapus;
k. penghasilan yang diterima atau diperoleh perusahaan modal ventura berupa bagian laba dari badan pasangan usaha yang didirikan dan menjalankan usaha atau kegiatan di Indonesia, dengan syarat badan pasangan usaha tersebut:
merupakan perusahaan mikro, kecil, menengah, atau yang menjalankan kegiatan dalam sektor-sektor usaha yang diatur dengan atau berdasarkan Peraturan Menteri Keuangan; dan
sahamnya tidak diperdagangkan di bursa efek di Indonesia;
l. beasiswa yang memenuhi persyaratan tertentu yang ketentuannya diatur lebih lanjut dengan atau berdasarkan Peraturan Menteri Keuangan;
m. sisa lebih yang diterima atau diperoleh badan atau lembaga nirlaba yang bergerak dalam bidang pendidikan dan/atau bidang penelitian dan pengembangan, yang telah terdaftar pada instansi yang membidanginya, yang ditanamkan kembali dalam bentuk sarana dan prasarana kegiatan pendidikan dan/atau penelitian dan pengembangan, dalam jangka waktu paling lama 4 (empat) tahun sejak diperolehnya sisa lebih tersebut, yang ketentuannya diatur lebih lanjut dengan atau berdasarkan Peraturan Menteri Keuangan; dan
n. bantuan atau santunan yang dibayarkan oleh Badan Penyelenggara Jaminan Sosial kepada Wajib Pajak tertentu, yang ketentuannya diatur lebih lanjut dengan atau berdasarkan Peraturan Menteri Keuangan.
 

Jamu

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You can check out UU 36 2008 on Income Tax (PPh). Quoted some of the relevant stuff below.

To help others, in English the bold language quoted by dafluff states as follows (from the English translation of UU 36 2008):

Clause (1) "Taxable object is income...including...gains from the sale or transfer of property including...gains from transfer of property in the form of grant, aid or donation, unless they are given to relatives within one degree of direct lineage"

Clause (3) "There shall be excluded from taxable object....gifts received by relatives within one degree of direct lineage."

Even if a husband and wife are separate economic units by virtue of a pre or postnup, spouses are still considered immediate family relatives and are therefore within one degree of direct lineage. Kids and parents can be separate economic entities so the fact that husband and wife can also be so does not make any difference.

Moreover, many prenup agreements, while separating property ownership, still require the husband to exclusively economically support the family including, presumably, providing a roof over the family's head. In fact, the Civil Code Article 145 states " In the event of exclusion or restriction of community property, the amount that the wife must contribute yearly to the household and education of the children shall be stipulated". Of course, this amount may be zero and to suggest that a husband buying his wife clothes, a car or even a house ultimately owned by the wife but for occupation by the family creates a taxable benefit for the wife would be nonsensical.

So dafluff I don't see any authority for your perspective in the UU above. Have you got anything else?
 

dafluff

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To help others, in English the bold language quoted by dafluff states as follows (from the English translation of UU 36 2008):

Clause (1) "Taxable object is income...including...gains from the sale or transfer of property including...gains from transfer of property in the form of grant, aid or donation, unless they are given to relatives within one degree of direct lineage"

Clause (3) "There shall be excluded from taxable object....gifts received by relatives within one degree of direct lineage."

Even if a husband and wife are separate economic units by virtue of a pre or postnup, spouses are still considered immediate family relatives and are therefore within one degree of direct lineage. Kids and parents can be separate economic entities so the fact that husband and wife can also be so does not make any difference.

Moreover, many prenup agreements, while separating property ownership, still require the husband to exclusively economically support the family including, presumably, providing a roof over the family's head. In fact, the Civil Code Article 145 states " In the event of exclusion or restriction of community property, the amount that the wife must contribute yearly to the household and education of the children shall be stipulated". Of course, this amount may be zero and to suggest that a husband buying his wife clothes, a car or even a house ultimately owned by the wife but for occupation by the family creates a taxable benefit for the wife would be nonsensical.

So dafluff I don't see any authority for your perspective in the UU above. Have you got anything else?

Not so fast. It says, "gifts received by relatives within one degree of direct lineage vertically", note "garis keturunan lurus satu derajat". Your wife/husband (or siblings), are not "keturunan" (lineage), obviously.

Also from the explanation sections of the same law:

Huruf c

Yang dimaksud dengan “hubungan keluarga sedarah dalam garis keturunan lurus satu derajat” adalah ayah, ibu, dan anak...


Translation:

Item c, The meaning of "one degree of vertical family blood relations is father, mother and child ... no mention of husband or wife.

Apologies for not including the proper translations, but there it is now.

Further explanation:
If you are married without prenup, then all income is joint income. Any income you make is also jointly owned by the spouse. Therefore you can not "gift" anything to your spouse, as they already own it. Hence, gift tax do not apply. In the case where you maintain asset separation, then anything you give to your spouse is a gift, and since your spouse is not a "one degree of vertical family blood relation", then anything you give them is subject to income tax.

A prenup may specify the husband is required to support the wife economically, but that doesn't exempt them with respect to the applicable tax laws.

I hope this answers your query. As always you should consult your own accountant/lawyer. But if they can not explain why a prenup can trigger gift taxes between husband and wife, then you should probably find another one.
 

dafluff

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Addition to the above: as a practical matter, any monies you give to your spouse for daily use can be argued being not a gift. ie, it is intended to be used at your direction, such as paying PLN, buying pulsa and other household stuff. Therefore that money does not increase their economic ability (tambahan kemampuan ekonomis), just like say giving money to your driver to buy gas does., and needs not be reported by them.

However buying a property is obviously different.
 

Jamu

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Not so fast. It says, "gifts received by relatives within one degree of direct lineage vertically", note "garis keturunan lurus satu derajat". Your wife/husband (or siblings), are not "keturunan" (lineage), obviously.

Also from the explanation sections of the same law:

Huruf c

Yang dimaksud dengan “hubungan keluarga sedarah dalam garis keturunan lurus satu derajat” adalah ayah, ibu, dan anak...


Translation:

Item c, The meaning of "one degree of vertical family blood relations is father, mother and child ... no mention of husband or wife. It doesn't need to mention husband or wife since that relationship is already within one degree - in fact it can be considered as degree zero of the lineage, especially as regards the children. The verticality you mention needs to start somewhere, and it starts with the married couple, going up one level (to parents and parents in law) and down one level (to children and sons/daughters in law), who like the prenup couple may also be separate economic entities. See also Article 296 of the Civil Code, which provides that the degrees of relationship by marriage shall be calculated in the same manner as that adopted in blood relationships.

Apologies for not including the proper translations, but there it is now.

Further explanation:
If you are married without prenup, then all income is joint income. Any income you make is also jointly owned by the spouse. Therefore you can not "gift" anything to your spouse, as they already own it. Hence, gift tax do not apply. In the case where you maintain asset separation, then anything you give to your spouse is a gift, and since your spouse is not a "one degree of vertical family blood relation", then anything you give them is subject to income tax. Agree with all except for the last sentence. There is no gift tax between spouses in Indonesia, regardless of their status as separate economic entities, as their relationship is by law within one degree of lineage, indeed for their kids they are the originators (degree zero) of the lineage. The UU you cite is does not make a prima facie case for a gift tax between spouses and, while one could make the argument that you put forward, it does not follow common or public policy sense. Under your interpretation, if a prenup couple purchase things for each other, like clothes, a handbag, a watch, a motorbike or car etc. then there is a taxable event. This is an absurd outcome and does not support your interpretation.

A prenup may specify the husband is required to support the wife economically, but that doesn't exempt them with respect to the applicable tax laws. As stated above, it is nonsensical that a wife would ever be taxed for receiving economic support from her husband. Please, show us a case in Indonesia where this has ever happened. It's all well and good to make a narrow and anti-family interpretation of the law, but unless you have a legal opinion or MOF ruling to support it, it's just that, a narrow, anti-family interpretation of the law which is inconsistent with the family promoting culture of Indonesia or indeed the plain language of the statute.

I hope this answers your query. As always you should consult your own accountant/lawyer. But if they can not explain why a prenup can trigger gift taxes between husband and wife, then you should probably find another one.
 

Jamu

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Addition to the above: as a practical matter, any monies you give to your spouse for daily use can be argued being not a gift. ie, it is intended to be used at your direction, such as paying PLN, buying pulsa and other household stuff. Therefore that money does not increase their economic ability (tambahan kemampuan ekonomis), just like say giving money to your driver to buy gas does., and needs not be reported by them.

However buying a property is obviously different.
So where do you draw the line? A new set of clothes, a Hermes bag (or maybe just a Coach bag), new watch for Christmas, bicycle, motorbike, car, a monthly allowance??? How is buying a property, especially if it is for the family's occupation, different? What monetary value triggers the gift tax? How long is a piece of string? The fact that you cannot explain what exactly is considered a taxable gift and what is not shows the weakness of your interpretation of this particular tax law. It was never intended to apply to spouses, prenup or not, and there is no prima facie evidence you can cite otherwise.
 

dafluff

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So where do you draw the line? A new set of clothes, a Hermes bag (or maybe just a Coach bag), new watch for Christmas, bicycle, motorbike, car, a monthly allowance??? How is buying a property, especially if it is for the family's occupation, different? What monetary value triggers the gift tax? How long is a piece of string? The fact that you cannot explain what exactly is considered a taxable gift and what is not shows the weakness of your interpretation of this particular tax law. It was never intended to apply to spouses, prenup or not, and there is no prima facie evidence you can cite otherwise.

Buying property is different because there is clear ownership of the property, it is likely to be worth more than the personal exemption (penghasilan tahunan tidak kena pajak - PTKP) and you also most definitely should include it in your yearly tax report under the assets column. Same with a car etc. Actually ALL the money/goods/property you give to your prenup spouse beyond the PTKP is taxable income, there is no monetary limit (other than the personal income exemption). However I really doubt that the tax office will come after your spouse because you give them Rp 10jt/ a month allowance, hence my earlier comment. This does not mean that I can not explain what is considered taxable gift, as already noted above, all of it is.

My advice is free, so you can take it for what it's worth. You can consult your own accountants/lawyer if you want (in fact I recommend this to everyone). Mine (more than one) has informed me what I have just explained to you. If yours doesn't, please have them cite to you why not. I quoted you the law, I gave you the correct translation, you can do as you see fit.
 
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Jamu

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Buying property is different because there is clear ownership of the property, it is likely to be worth more than the personal exemption (penghasilan tahunan tidak kena pajak - PTKP) and you also most definitely should include it in your yearly tax report under the assets column. Same with a car etc. Actually ALL the money/goods/property you give to your prenup spouse beyond the PTKP is taxable income, there is no monetary limit (other than the personal income exemption). However I really doubt that the tax office will come after your spouse because you give them Rp 10jt/ a month allowance, hence my earlier comment. This does not mean that I can not explain what is considered taxable gift, as already noted above, all of it is.

My advice is free, so you can take it for what it's worth. You can consult your own accountants/lawyer if you want (in fact I recommend this to everyone). Mine (more than one) has informed me what I have just explained to you. If yours doesn't, please have them cite to you why not. I quoted you the law, I gave you the correct translation, you can do as you see fit.
Well I guess we can agree to disagree on the issue. However, I will also consult with a professional since as current non-residents of Indonesia, we will be able to plan efficiently for whatever the outcome, prior to our relocation. As an interesting side item, under your interpretation of the law, what is the impact of a joint bank account in Indonesia? Clearly these are allowed by the banks even in the case of a prenup, so then the funds technically (and legally) belong to both parties and cannot be 'gifted' from one to the other. And if the local account was funded by an overseas joint account, then there is even more evidence of co-equal ownership. From a legal point of view, the parties may be seen as waiving the provisions of the prenup insofar as the joint account is concerned, and the much argued provisions of UU 36 would not apply.
 

dafluff

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Well I guess we can agree to disagree on the issue. However, I will also consult with a professional since as current non-residents of Indonesia, we will be able to plan efficiently for whatever the outcome, prior to our relocation. As an interesting side item, under your interpretation of the law, what is the impact of a joint bank account in Indonesia? Clearly these are allowed by the banks even in the case of a prenup, so then the funds technically (and legally) belong to both parties and cannot be 'gifted' from one to the other. And if the local account was funded by an overseas joint account, then there is even more evidence of co-equal ownership. From a legal point of view, the parties may be seen as waiving the provisions of the prenup insofar as the joint account is concerned, and the much argued provisions of UU 36 would not apply.

I don't know about the implications of a joint account. You should check with a professional.

My guess (and as a guess this is said without any law backing it up), is that it doesn't matter if it is in a joint account. The reason for this is the way Indonesian tax reporting works. With every yearly return you have to include all your assets. If from year last year to this year your assets increased by (for example) Rp 10 M because you purchased a house, then the tax office can ask you where that money came from. Then it is up to you to show that whether it is taxable or non taxable income.

If you are currently a non-resident of Indonesia, none of this really matters, as you can gift this money or buy the house before you are subject to Indonesian taxes.
 

Jamu

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If you are currently a non-resident of Indonesia, none of this really matters, as you can gift this money or buy the house before you are subject to Indonesian taxes.
Yes true, as well as fund the joint bank account.
 

Ruserious

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Just wondering on this old thread if anyone has since done a Postnup and how it went? Did they have a tax problem afterwards as some were worried about?
 

Noorman

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Hi, not sure if you have come across this.

http://indonesiaexpat.biz/topreads/postnup-agreements-now-legal/

I work for this mob and we have done quite a few post-nups and pre-nups since publishing this. Its quite easy and fuss free.

Basically if you have a prenup or postnup, signed before a notary, it still needs to be registered with both the Indonesian Civil Registry, and District Court. If you were married in Indonesia under Islamic Law (i.e. have buku nikah) then it should be registered at the KUA instead of the Civil Registry. The correct Civil Registry to go to relates to where the Indonesian's KTP is domiciled.

Cheers,

Will
finally found a paragraph that looks to answer my question on post nuptial. we have been married 5years and looking to purchase some apartments by selling my wife's land/house(WNI) . I did not know we need to register the post nup with KUA.

With the post-nup, i presume my wife will be able to purchase properties again right?TIA.
 

januargh

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if you have any notary public that can do all this, including the registration to catatan sipil, please let me know. I am in the needs of this and i am a noob.

usually how much this would cost me?
 

Helpful Herbert

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So if a husband with a pre-nup transfers 2M from his bank to her bank to a deposito, and then a year later she transfers it back to him (maybe because of an advantageous interest rate), then tax has to be paid each time? It doesn't sound very likely to me. My guess is that tax officers have more clearcut tax evasion cases to pursue, rather than trying to tax transfers between husband and wife, especially given the family-based culture here.
Perhaps this could be another test case to add to the "working on a spouse kitap" issue.
 

mas_dam

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So if a husband with a pre-nup transfers 2M from his bank to her bank to a deposito, and then a year later she transfers it back to him (maybe because of an advantageous interest rate), then tax has to be paid each time?

In this case you can set-up a Loan Agreement to proof that these are not taxable gift-transactions ('hibah'). If you see the need to be extra-safe to proof that such Loan Agreement has not been set-up and back-dated the moment you were questioned by the tax office, you can opt for a Notarial Loan Agreement. This can also come in the form of Akta Pengakuan Hutang/Debt Recognition Deed.
You should accordingly report the given/received Loan on your annual Tax Statement (or at least the party reporting tax in Indonesia).
My take on this is that tax office is likely to stop digging and look for easier prey if you are quick to provide a Loan Agreement + reported Loan on your SPTs/annual tax reporting. On the other side they might see you as an easy target and hassle you more if you cannot provide any of that.
 

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