Mechanism of PPh Article 21 DTP Incentive for Certain Employees

The Directorate General of Taxes has issued guidelines on the PPh Article 21 DTP incentive aimed at specific employees. The guidelines take effect in 2025 and define the procedures for granting the tax incentive.

The incentive is provided through three stages: first, eligibility of employees is verified based on income and status criteria; second, employers submit data of qualified staff to the tax office; third, the tax office approves and disburses the incentive to the employer.

The incentive reduces the taxable income of eligible employees, lowering the amount of PPh Article 21 withheld from salaries. Employers must adjust payroll systems to reflect the reduced tax withholding.