Employer Obligations for Utilizing PPh 21 DTP Incentive

Employers in Indonesia are required to comply with the rules governing the use of the PPh 21 DTP tax incentive starting in the 2025 fiscal year. The incentive aims to reduce tax liability on employee remuneration. Core requirements include proper reporting and documentation.

To claim the incentive, employers must submit accurate payroll data, file Form 1721‑1 on schedule, and retain supporting documents for the prescribed retention period. The tax authority conducts verification to ensure adherence to the applicable regulations.

When the conditions are met, the incentive can lower the company's tax burden and improve cash flow. Failure to comply may trigger administrative penalties and result in loss of the benefit.