- Joined
- Aug 6, 2016
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- 198
I'm asking this question on behalf of a friend but it has implications for myself (and I assume all WNA/WNI couples).
About 3 weeks ago he had tax officers arrive unannounced to his house and request copies of the sale documents for the land their house sits on. They originally bought empty land and built the house themselves. He's a WNA so the land is in his wife's name, they have a prenup (thanks to me).
Today he's received a letter saying that they need to report the property to the tax office and participate in the last stage of the Tax Amnesty, thereby paying 5% of the value of the land.
I asked him if he'd already reported the land on his wife's tax return and he's pretty sure they hadn't.
I was under the assumption that while you have to report the house and land as an asset on your wife's tax return, the amount isn't included as taxable income because it's a gift between husband and wife.
However after checking around, I'm now convinced that this isn't true.
Here's the relevant law which is from UNDANG-UNDANG REPUBLIK INDONESIA, NOMOR 36 TAHUN 2008 (See here in Indonesian: http://www.jdih.kemenkeu.go.id/fullText/2008/36TAHUN2008UU.HTM)
Here's an english translation from here(http://www.expat.or.id/info/2008-IncomeTaxSDSN.pdf):
So, because husband and wives aren't "relatives within one degree of direct lineage" any gifts between them are considered taxable income. Is there something I'm missing? This just doesn't seem right and is definitely not the case in Australia.
My friend is a bit freaked out and me too. I'm almost certain we (that is to say my wife) have never paid income tax for the house and land, let alone the car, that I've bought for her.
I've never seen this brought up in the forums before so it's come as a bit of a shock. Can anyone confirm what I'm saying is true?
About 3 weeks ago he had tax officers arrive unannounced to his house and request copies of the sale documents for the land their house sits on. They originally bought empty land and built the house themselves. He's a WNA so the land is in his wife's name, they have a prenup (thanks to me).
Today he's received a letter saying that they need to report the property to the tax office and participate in the last stage of the Tax Amnesty, thereby paying 5% of the value of the land.
I asked him if he'd already reported the land on his wife's tax return and he's pretty sure they hadn't.
I was under the assumption that while you have to report the house and land as an asset on your wife's tax return, the amount isn't included as taxable income because it's a gift between husband and wife.
However after checking around, I'm now convinced that this isn't true.
Here's the relevant law which is from UNDANG-UNDANG REPUBLIK INDONESIA, NOMOR 36 TAHUN 2008 (See here in Indonesian: http://www.jdih.kemenkeu.go.id/fullText/2008/36TAHUN2008UU.HTM)
Yang dikecualikan dari objek pajak adalah:
a. 2. harta hibahan yang diterima oleh keluarga sedarah dalam garis keturunan lurus satu derajat . . .
Here's an english translation from here(http://www.expat.or.id/info/2008-IncomeTaxSDSN.pdf):
There shall be excluded from taxable object:
a. 2. gifts received by relatives within one degree of direct lineage.
So, because husband and wives aren't "relatives within one degree of direct lineage" any gifts between them are considered taxable income. Is there something I'm missing? This just doesn't seem right and is definitely not the case in Australia.
My friend is a bit freaked out and me too. I'm almost certain we (that is to say my wife) have never paid income tax for the house and land, let alone the car, that I've bought for her.
I've never seen this brought up in the forums before so it's come as a bit of a shock. Can anyone confirm what I'm saying is true?